India- Case study on institutional arrangement for ...documents.worldbank.org/curated/en/946831555477597462/pdf/India-Case-Study-on...the Mahatma Jyotiba Phule Jan Arogya Yojana (Maharashtra),

Document of the World Bank

Report No: AUS0000676 .

India- Case study on institutional arrangement for detecting fraud in government health insurance program

Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States Documenting practices from Gujarat, Maharashtra,Tamil Nadu and Telangana

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© 2017 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved

This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: “World Bank. 2018. ANTI-FRAUD EFFORTS IN GOVERNMENT-SPONSORED HEALTH INSURANCE SCHEMES IN FOUR INDIAN STATES. © World Bank.” All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected].

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a

Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States

November 2018

Documenting practices fromGujarat, Maharashtra, taMil NaDu aND telaNGaNa

Study team:Sheena ChhabraAloke GuptaRajesh JhaAmith Bathula NagarajOwen Smith

© 2018 The World Bank

1818 H Street NW

Washington DC 20433

Telephone: 202-473-1000

Internet: www.worldbank.org

Some rights reserved.

This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

Rights and Permissions

The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given.

Attribution: Please cite the work as follows: “World Bank. 2018. Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States© World Bank.”

All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected].

Design and Print: Macro Graphics Pvt. Ltd.

Table of Contents iii

Table of Contents

Abbreviations and Acronyms v

Acknowledgements vii

1. Introduction 1

2. Framework, Scope, Methods, and Data Sources 3

3. State-level Overview 7

4. Some Common Anti-Fraud Elements Across States 11

5. Key Takeaways 19

Annex 1: Overview of State Schemes 23

Annex 2: Case Study: Mukhyamantri Amrutum (MA) and MA Vatsalya (MAV) Yojana, Gujarat 26

Annex 3: Case Study: Mahatma Jyotiba Phule Jan Arogya Yojana, Maharashtra 32

Annex 4: Case Study: Chief Minister’s Comprehensive Health Insurance Scheme, Tamil Nadu 38

Annex 5: Case Study: Aarogyasri Scheme, Telangana 44

Exhibit 1: Organogram - SNC, Gujarat 50

Exhibit 2: Organogram - SHAS, Maharashtra 51

Exhibit 3: Organogram - Scheme-administering Agency (TNHSP), Tamil Nadu 52

Exhibit 4: State-level Organogram - AHCT, Telangana 53

Exhibit 5: District-level Organogram - AHCT, Telangana 54

iv Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States

List of Tables

Table 1: GSHISs Included in the Report 4

Table 2: Health Financing Indicators of Selected States: 2015–2016 5

Table 3: Coverage Dimensions under the Government-Sponsored Health Insurance Schemes 8

Table 4: Income Threshold Levels for Eligibility 8

Table 5: Public and Private Provider Details 9

Table 6: Financial Overview of the Selected GSHISs: 2017–2018 10

Table 7: Anti-Fraud Responsibility and Staffing in Selected GSHIS 12

Table 8: Examples of Fraud Triggers from Gujarat and Tamil Nadu 14

Table 9: Fraud Management Practices under Selected GSHISs in Indian States and Other Countries 16

Abbreviations and Acronyms v

Abbreviations and Acronyms

ACHS Australian Council on Healthcare Standards

AHCT Aarogyasri Health Care Trust

ASHA Accredited Social Health Activist

BPL Below Poverty Line

CEO Chief Executive Officer

CGHS Central Government Health Scheme

CMCHIS Chief Minister’s Comprehensive Health Insurance Scheme

DoH&FW Department of Health and Family Welfare (of state governments)

DRG Diagnostic Related Group

EDC Empanelment and Disciplinary Committee

GHE Government Health Expenditure

GSHIS Government-Sponsored Health Insurance Scheme

GDP Gross Domestic Product

GSDP Gross State Domestic Product

GPS Global Positioning System

HMIS Health Management Information System

IEC Information, Education, and Communication

INR Indian Rupees

IRDAI Insurance Regulatory Development Authority of India

ISA Implementation Support Agency

IT Information Technology

vi Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States

JCI Joint Commission International

MA Mukhyamantri Amrutum

MAV Mukhyamantri Amrutum Vatsalya

MEDCO Medical Coordinator

MJPJAY Mahatma Jyotiba Phule Jan Arogya Yojana

MoHFW Ministry of Health and Family Welfare

NABH National Accreditation Board of Hospitals

OECD Organisation for Economic Co-operation and Development

PHC Primary Health Center

PM-JAY Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana

QCI Quality Council of India

QR Quick Response

SHAS State Health Assurance Society

SMS Short Messaging Service

SNC State Nodal Cell (Gujarat)

STG Standard Treatment Guideline

TGHE Total Government Health Expenditure

TNHSP Tamil Nadu Health Systems Project

TPA Third-party Administrator

UHC Universal Health Coverage

URN Unique Registration Number

US$ United States Dollar

U-WIN Unorganized Worker’s Identification Number

Acknowledgements vii

Acknowledgements

This report was prepared by Sheena Chhabra (Senior Health Specialist), Aloke Gupta (Senior Health Insurance Consultant), Rajesh Jha (Senior Health Financing Consultant), Amith Bathula Nagaraj (Senior Operations Officer), and Owen Smith (Senior Economist) at the request of the National Institution for Transforming India (NITI Aayog) to help inform anti-fraud efforts for the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY). We would like to express our gratitude to Dr. Vinod Paul, Member (Health), NITI Aayog; Mr. Alok Kumar, Advisor (Health), NITI Aayog; Dr. Indu Bhushan, CEO, National Health Agency (NHA); Dr. Dinesh Arora, Deputy CEO, NHA; and Dr. K. Madan Gopal, Senior Consultant (Health), NITI Aayog, for the rich inputs and engaging discussions that contributed to finalizing the draft. We are also deeply appreciative of the warm welcome and extensive support provided by a large number of officials and managers affiliated with the Mukhyamantri Amrutum Yojana and Mukhyamantri Amrutum Vatsalya Yojana schemes (Gujarat), the Mahatma Jyotiba Phule Jan Arogya Yojana (Maharashtra), the Chief Minister’s Comprehensive Health Insurance Scheme (Tamil Nadu), and Aarogyasri Scheme (Telangana). We would like to thank Rekha Menon, Ajay Tandon, Karima Saleh, Somil Nagpal, and Marvin Plotz for their excellent peer review comments, and Bhavna Bhatia for her support and guidance. The World Bank technical support has been provided under the Programmatic Advisory Services and Analytics for Universal Health Coverage in India with financial support by the Bill & Melinda Gates Foundation Trust Fund. Lastly, we are also grateful for the support of the Lighthouse India initiative led by the World Bank’s India Country Office.

Chapter 1: Introduction 1

1. Introduction

Health systems are highly vulnerable to integrity violations. The nature of health service delivery – it is mostly “discretionary” on the part of the health care provider, and “transaction intensive” in the sense that volumes are typically very large – creates opportunities for provider conduct that is not aligned with the broader public interest. The net impact of integrity violations is greater than the direct financial loss. The consequences may include patient harm at the point of care, over-prescription of diagnostics and medications, and violations of patients’ rights to life and health. Health insurance fraud is one of the many forms of integrity violations in health and a matter of grave concern for governments and the insurance industry.

By its very nature, fraud is difficult to measure. The paucity of reliable data on this subject further accentuates the concern. One survey estimates the loss on account of fraudulent health claims in India to be around INR 6,000–INR 8,000 million (US$92–US$123 million) per year.1 The Organisation for Economic Co-operation and Development (OECD) estimates the financial loss to fraud and error to be more than 6 percent of the total health expenditure.2 Investing

1 https://www.medindia.net/patients/insurance/fraudulent-health-insurance-claims.htm.

2 OECD (Organisation for Economic Co-operation and Development). 2017. Tackling Wasteful Spending on Health.

in anti-fraud efforts is likely to yield high economic returns. One study estimates that investments in fraud detection technology with predictive modelling features could yield annual savings of US$97 million in the State of Louisiana alone.3

Government-Sponsored Health Insurance Schemes (GSHISs) in India have received a major policy focus with the Government of India launching the Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY) in September 2018. The PM-JAY provides an annual cover of INR 500,000 (US$7,576) per family per year for inpatient secondary and tertiary level care to more than 500 million poor. Most of the people in India who have some form of health insurance are covered under the GSHISs. In 2016–2017, of the total persons having health insurance cover (437.5 million), 77 percent are under one or the other GSHIS, including the Rashtriya Swasthya Bima Yojana.4

The unprecedented population coverage and scope of services in the PM-JAY is likely to pose immense challenges for fraud management. The Insurance Regulatory Development Authority of India

3 Parente, S. T., S. Oberlin, L. Tomai, and D.O. Randall. 2016. “The Potential Savings of using Predictive Analytics to Staunch Medicaid Fraud.” Journal of Health and Medical Economics. 2: 2.

4 IRDAI, Annual Report 2016–2017; IRDAI reports figures of GSHISs that are operated through insurance companies only, not those implemented via assurance mode.

2 Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States

(IRDAI) regulates the insurers and the third-party administrators (TPAs). But the onus of regulating providers rests solely with state governments. The implementation of the Clinical Establishment (Registration and Regulation) Act 2010 remains a challenge with only four states and all Union Territories, except the National Capital Territory of Delhi, having adopted and implemented it.5 State governments that do not go the insurance route and cover the risk themselves (referred to in the Indian context as the ‘health assurance’ model) usually opt for management and operations support from external agencies called the implementation support

5 http://clinicalestablishments.gov.in/cms/Home.aspx.

agencies (ISAs), which may or may not be TPAs. The ISAs, which are not registered as TPAs, do not fall within the ambit of the IRDAI regulations. Therefore, contracts become the primary tool for regulating relationships between different actors (for example, provider, insurer, payer) in any GSHIS landscape. Strengthening the regulatory environment may be a medium- to long-term exercise. In the short term, reengineering management processes, developing legally sound contracts, and augmenting contract management capacity are essential for fraud management.

Chapter 2: Framework, Scope, Methods, and Data Sources 3

Fraud in health insurance is a form of integrity violation. The ‘intent’ behind an action is what distinguishes between ‘fraud’ on one hand and ‘abuse’, ‘waste’, and ‘error’ on the other. While ‘fraud’ can be defined as a ‘rule breaking behavior’ that is illegal and intentional, ‘abuse’ is a ‘rule-bending’ behavior that is not illegal and is without criminal intent. The entire spectrum of integrity violations that range from waste to fraud have similar effects on the efficiency of any health insurance system.

The payer, the provider, and the patient are the three primary actors in any health insurance

landscape. Integrity violations, including fraud, may occur in the relationship between any two actors. It bears mentioning that insurance-based systems are not unique in suffering from integrity violations—they may be found in any health financing model. India’s government health system has long suffered from high rates of provider absenteeism, for example. Like fraud, absenteeism represents a financial loss with potential health consequences for the population. Figure 1 presents a typology of fraud commonly experienced in health systems.

2. Framework, Scope, Methods, and Data Sources

Figure 1: Typology of Fraud in the Health Sector

Payer(s) (Public or Private)

Embezzlement

Unjustified denialof coverage or benefits

Wrongful claims

Obtaining unjustifiedcoverage

Using several insurance coveragesto multiply cost claims

Bribery for access or referrals

Informal payments(under the table payments, gratuity)

Over provision, over billing

Charging for phantom care

Absenteeism, payroll fraud

E.g., Salary versus Fee-For-Service

Unjustified denialof payments

Insured Tax Payers,Patients

Providers of Medical Goods & Services


Tackling Fraud

Detection

Legal Framework

Institutional Mechanisms

Capacity

Preventio

nDeterrence

Figure 2: Tackling Fraud

The framework used for documenting fraud management practices revolves around three pillars of tackling fraud—prevention, detection, and deterrence (see figure 2). Fraud management is more effective in a responsive GSHIS ecosystem characterized by appropriate legal framework, vibrant institutional mechanisms, and adequate capacity. Aspects of the GSHIS ecosystem are also documented in this report.

This report documents anti-fraud efforts in selected GSHISs in four states in India. These are shown in Table 1. They were selected on the basis that all four have been operational for several years, but represent a balance between states with insurance and assurance modes. Maharashtra’s MJPJAY and Tamil Nadu’s CMCHIS were chosen as they are implemented through insurance mode. In both cases the insurer is public. Telangana’s Aarogyasri Scheme was chosen as it is one of the oldest GSHISs in India, which began in insurance mode and gradually moved to the assurance model. Gujarat’s MA Yojana and MAV Yojana were chosen because they provide an interesting variation of the assurance model, whereby the scheme-administering agency is seeded within the Health Department, unlike the quasi-autonomous Aarogyasri Health Care Trust (AHCT) that administers the scheme in Telangana.6

6 According to Indian laws, an organization can be legally registered as a ‘Trust’ or a ‘Society’, both of which are legally not-for-profit entities regulated under different laws.

Some health financing indicators for each state are presented in Table 2.

The methods for the documentation included the following:

Structured interviews (based on data collection �

tools prepared for this purpose) with officials from the scheme-administering agencies at the state level, insurance companies, TPAs, ISAs, and empaneled public and private providers (one public and one private in each state);

Analysis of secondary data and content analysis �

of selected GSHIS documents like the service packages, standard operating procedures, and service agreements; and

Table 1: GSHISs Included in the Report

State Schemes Launched

Gujarat Mukhyamantri Amrutum (MA) Yojana and Mukhyamantri Amrutum Vatsalya (MAV) Yojana

2012

Maharashtra Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY) 2012

Tamil Nadu Chief Minister’s Comprehensive Health Insurance Scheme (CMCHIS) 2012

Telangana Aarogyasri Scheme 2007

Chapter 2: Framework, Scope, Methods, and Data Sources 5

Table 2: Health Financing Indicators of Selected States: 2015–2016

Indicator Gujarat Maharashtra Tamil Nadu Telangana

Total Government Health Expenditure (TGHE)

INR 74,320 million

(US$1.14 billion)

INR 120,660 million

(US$1.86 billion)

INR 85,430 million

(US$1.31 billion)

INR 46,260 million

(US$0.71 billion)

TGHE as a share of total state expenditure (%)

5.9 5.1 5.0 4.8

Per capita TGHE INR 1,189

(US$18)

INR 1,011

(US$16)

INR 1,235

(US$19)

INR 1,322

(US$20)

Per capita gross state domestic product (GSDP)

INR 164,030

(US$ 2,524)

INR 167,607

(US$2,579)

INR 167,914

(US$2,583)

INR 162,618

(US$2,495)

TGHE as a share of GSDP (%) 0.7 0.6 0.7 0.8

Source: National Health Profile 2018, Central Bureau of Health Intelligence, Government of India.

Analysis of anti-fraud processes and practices in �

selected Indian states in comparison with those in Croatia, Indonesia, the Philippines, Turkey, and the United States of America documented in the World Bank Group companion HNP Discussion Paper.7

Information and data related to the selected GSHISs were obtained from the respective scheme-administering agencies. Other sources included the Scheme websites, state budget documents, the Department of Economics and Statistics websites of states, the National Health Profile 2018 (Central Bureau of Health Intelligence, Government of India), and the IRDAI annual report.

7 Chhabra, S., R. Menon, I. Postolovska, O. Smith, A. Tandon and V. Ulep (2018). “Preventing, Detecting and Deterring Fraud In Social Health Insurance Programs: Lessons from Selected Countries”. Health, Nutrition & Population Discussion Paper. Washington DC: World Bank.

The report documents fraud management practices and should not be viewed as an assessment or evaluation of these practices. The focus of enquiry in this study was limited to processes. It did not look at outcomes. As noted, fraud by its nature is difficult to measure. Thus, no attempt was made to measure fraud or assess the effectiveness of fraud control efforts.

The report is structured as follows. After a short introduction, it presents a comparative overview of the selected GSHISs. This is followed by some common fraud management practices across the schemes. The report ends with key takeaways and areas for further consideration. State-specific practices are presented in detailed case studies annexed to the report.

Chapter 3: State-level Overview 7

The GSHISs in Gujarat, Maharashtra, Tamil Nadu and Telangana have broad similarities but also important differences. They are all non-contributory, relying exclusively on state revenues to fund coverage expansions. They represent a mix of insurance and assurance models. Maharashtra and Tamil Nadu cover the risk through public sector insurance companies (insurance mode),8 while the risk is borne directly by the state governments in Gujarat and Telangana (assurance mode). Despite different implementation modes and associated incentives for preventing fraud, there are striking similarities in anti-fraud practices and overall administration of the schemes.

The states and the schemes differ in the type of agencies that purchase care from the providers. Maharashtra, Tamil Nadu, and Telangana have set up independent purchasing agencies (State Health Assurance Society [SHAS], Tamil Nadu Health Systems Project [TNHSP], and AHCT, respectively). The State Nodal Cell (SNC) in Gujarat, which purchases care, is seeded within the Commissionerate of Health, Family Welfare, Medical Services, and Medical Education Department of the state government.

The selected schemes contribute toward the coverage dimensions of universal health coverage

8 Public sector insurance companies refer to insurance companies operating in India that are either fully owned by the government or the government has a majority shareholding in the company.

(UHC).The GSHIS coverage rate (share of total state population) is highest (93 percent) in Telangana, followed by Maharashtra (90 percent), Tamil Nadu (82 percent), and Gujarat (50 percent). Three of the four Indian states have higher population coverage than what is seen in intermediate-stage health insurance reform countries such as the Philippines (76 percent) and Indonesia (63 percent).9 Gujarat is a good example of an incremental approach to risk pooling where the scheme has undergone frequent policy changes for gradually increasing the risk pool. See Table 3 for further details.

Income eligibility threshold levels for enrollment under the schemes are defined but vary significantly across the four selected states. Unlike Maharashtra, Tamil Nadu, and Telangana, policy decisions related to income eligibility threshold level under the scheme in Gujarat are more inclusive and demonstrate a slow but gradual move toward a single-payer scheme. The scheme has expanded its coverage quite a few times in the last five years (see Table 4).

Schemes in all four states have explicit benefit packages. This is similar to the practices in the United States of America and most other OECD

9 Lagomarsino, G, A. Garabrant, A. Adyas, R. Muga, and N. Otoo. 2012. “Moving Towards Universal Health Coverage: Health Insurance Reforms in Nine Developing Countries in Africa and Asia.” The Lancet 380 (9845): 933–943.

3. State-level Overview


Table 3: Coverage Dimensions Under the Government-Sponsored Health Insurance Schemes

Scheme Who is covered? What is covered? How much is covered?(per family per year)

Target Families Enrolleda

Level Package(only inpatient)

MA and MAV Yojana

(Gujarat)

People below poverty line (BPL) + other categoriesb

6.2 million (50%)

Tertiary 698 surgical packages

INR 300,000 (US$4,615) +

INR 200,000 (US$3,077) for transplants

MJPJAY

(Maharashtra)

BPL + other categoriesb

22.3 million

(90%)

Secondary and tertiary

971 surgical and medical packages

INR 150,000 (US$2,308);

INR 250,000 (US$3,846) for renal transplants

CMCHIS

(Tamil Nadu)


15.72 million

(82%)


1,027 surgical and medical packages

INR 100,000 (US$1,538) + up to INR 4.5 million (US$69,231) for 8 high-end procedures

Aarogyasri Scheme

(Telangana)


7.72 million

(93%)


949 surgical and medical packages

INR 200,000 (US$3,077)

Note: (a) Figures in parenthesis indicate families enrolled as a share of the total families residing in the state. (b) For details of ‘other categories’, see Table 4.

Table 4: Income Threshold Levels for Eligibility

Scheme Family Income Threshold Levels for Eligibility

MA Yojana and MAV Yojana (Gujarat)

Families with annual income ≤ INR 300,000 (US$4,615)

Senior citizens (those who have completed sixty years of age) from families with annual income ≤ INR 600,000 (US$9,231)

Women and children under the age of 21 years

Accredited social health activists (ASHAs) (frontline health workers)

Government journalists

Class 3 and 4 level state government employees

MJPJAY (Maharashtra) Families with annual income ≤ INR 100,000 (US$1,538)

Farmers from 14 agriculturally distressed districts

CMCHIS (Tamil Nadu) Families with annual income ≤ INR 72,000 (US$1,107)

Aarogyasri Scheme (Telangana) According to the BPL list of the state

Anybody with Chief Minister’s referral letter

Chapter 3: State-level Overview 9

countries. In contrast, the insurance schemes in Croatia, Indonesia, and the Philippines do not have explicit package lists; instead they have exclusion lists and everything apart from the packages featuring in the negative list is included. The packages in the selected GSHISs in the Indian states comprise secondary and tertiary level inpatient medical and surgical procedures, except Gujarat where only surgical packages are covered as a fraud prevention measure, reportedly because medical packages are more prone to fraud.

All four Indian states contract public and private providers, but the majority are private. Of the four states, the MA Yojana and MAV Yojana schemes in Gujarat have the highest share of private providers and Telangana the least (see Table 5). This trend is similar to the Philippines (60 percent private providers). In Croatia and Indonesia, the majority of the providers are public.

Empaneled providers in selected Indian states receive case-based bundled payments, in addition to supply-side budget allocations to public providers. This practice is also found in most OECD countries, although unlike India the European systems have well-established Diagnostic Related Group (DRG) systems. However, there is a significant difference on beneficiary co-payment policies. Whereas in the four Indian states there are no beneficiary co-payments (except for joint replacements in Gujarat where the

cover is limited to INR 40,000), most OECD countries implement some form of explicit beneficiary co-payments.

The schemes vary significantly in how the package rates are determined. In all state schemes the reimbursement rates for public and private providers are the same. In Gujarat the scheme-administering agency finalizes tariffs by rationalizing the lowest price bid for each procedure with prevalent market rates. Maharashtra, Tamil Nadu, and Telangana have in-house committees to determine procedure package rates.10 Whereas Telangana uses an online pricing module and medically coded inputs for costing procedures, Maharashtra and Tamil Nadu benchmark their rates against market prices and tariff under the Central Government Health Scheme (CGHS). In contrast, most OECD countries regulate package rates based on costing studies and actuarial analysis with adjustments made for historical expenditure and allocation trends. Costing studies and actuarial analysis, which are good fraud prevention measures, are more important for states following the assurance mode and directly covering the risk. In all four Indian states, the claims outgo is between 9 percent and 15 percent of the TGHE (see Table 6). Adequate and timely allocation of resources is important.

10 The SNC calls for bids for each identified procedure. The lowest bid for each procedure is compared with the average market rates to prevent underbidding.

Table 5: Public and Private Provider Details

Scheme Empaneled Provider details (as of June 2018) Average Number of Providers per

DistrictTotal Public Private Share of

Private (%)

MA and MAV Yojana (Gujarat) 185 22 163 88 6

MJPJAY (Maharashtra) 492 78 414 84 14

CMCHIS (Tamil Nadu) 881 224 657 76 28

Aarogyasri Scheme (Telangana) 327 95 232 71 11


Table 6: Financial Overview of the Selected GSHISs: 2017–2018

Aspects of the Scheme MA and MAV Yojana(Gujarat)

MJPJAY(Maharashtra)

CMCHIS(Tamil Nadu)

AHS(Telangana)

Spending per beneficiary family per yeara

INR 1,113 (US$17)

INR 690 (US$11)

INR 699

(US$11)

INR 920b

(US$14)

Pricing of procedures Package wise Package wise Package wise Package wise

No. of claims 467,049 471,104 480,386 275,303

Total claims payout (in millions) INR 6,904 (US$105)

INR 10,089 (US$155)

INR 8,770

(US$133)

INR 7,100c (US$108)

Average claims size INR 14,782 (US$227)

INR 21,416

(US$329)

INR 18,256

(US$281)

INR 25,790

(US$397)

Claims payout as a share of TGHE (%) 9 9 11 15d

Note: a. This refers to the premium in Maharashtra and Tamil Nadu and premium equivalent (or claims outgo per beneficiary family enrolled, excluding scheme administration cost) in Gujarat and Telangana. b,c,d. The total claims outgo for Telangana was not available. Instead, the total claims amount approved in 2016–2017 has been used.

Chapter 4: Some Common Anti-fraud Elements Across States 11

All the public agencies administering the schemes have strong governance structures. Their executive bodies are chaired by senior officials from the state government and have adequate political oversight. Whereas the executive bodies of the scheme-administering agencies in Maharashtra and Telangana are chaired by the State Chief Ministers, in Tamil Nadu and Gujarat the agencies are headed by the Chief Secretary to the state government and the Principal Secretary of the Health Department, respectively.

All scheme-administering agencies have anti-fraud units with dedicated staff. The number of dedicated full-time staff for fraud management is highest in Maharashtra followed by Tamil Nadu (see Table 7). These anti-fraud staff numbers are in sharp contrast to the dedicated full-time staff in other countries that vary between approximately 50 in Croatia (out of 2,000 full-time staff) to approximately 300 in Indonesia (out of 7,000 full-time staff). Almost all OECD countries have counter-fraud units or organizations that are associated with social health insurance agencies that administer public funds. Schemes in all four states rely heavily on Aarogyamitras (insurance coordinators deputed by the TPA/ISA) for fraud management. Aarogyamitras play a critical role in beneficiary verification and

coordination with the in-patients. This is important for preventing beneficiary fraud. Aarogyamitras are usually appointed by the TPAs/ISAs and, therefore, there is no conflict of interest. This approach is not observed in any of the global cases documented.

Although overall responsibility for fraud management lies with the scheme-administering agencies, the primary task of fraud detection is outsourced to either the insurer and TPAs (in Maharashtra and Tamil Nadu) or to the ISAs (in Gujarat and Telangana). In contrast, the anti-fraud efforts were not outsourced to any external agency in the global cases. It is pertinent to note that the TPAs or ISAs have limited incentives to invest in anti-fraud efforts as they are mostly contracted on the basis of a fixed-fee per claim in a business model characterized by low costs and small margins. Moreover, the short-term nature of outsourcing to insurers and TPAs – contract duration is typically 1 to 3 years – may deter major investments in anti-fraud capacity. While most countries have plans to improve the capacity of anti-fraud units, in selected Indian states the approach to skills development remains need-based and ad hoc. There is an absence of a skills development strategy and plan.

None of the schemes in the selected states have anti-fraud policies and guidelines. Although

4. Some Common Anti-Fraud Elements Across States


operating procedures for enrollment, empanelment,

pre-authorization, and claims processing refer to

processes that are aimed at preventing fraud, the

scheme-administering agencies in all four states

have taken need-based policy measures to prevent

fraud.

Benefit package design policy elements aimed at preventing fraud include reserving frequently-abused secondary-level packages for public providers only. One out of every seven most

frequently-abused secondary care procedures

(like hearing aids, hysterectomy) in all states are

reserved for public providers only. As an anti-

fraud measure, Gujarat has excluded medical

management procedures from the benefits package

as they are more prone to fraud. Costing studies

and tariff-related policy decisions can be a fraud

prevention measure. The scheme-administering

agency in Gujarat increased the package rates by

15 percent within three years of the launch of the

program to ensure that reimbursements reflect a fair

exchange.

Stakeholder (insurer, TPA, ISA, provider) contracts in Maharashtra and Tamil Nadu have references to civil and criminal recourse for fraud, but neither state has initiated any legal action against fraud. Gujarat is the only state that has filed criminal complaints to the police, despite the provider agreement not having any such provision as criminal action can be initiated even without the contract having a provision for it. None of the selected Indian states have a regulatory framework or laws specific to health insurance nor is there any central law to specifically address insurance fraud. Instead, the health insurance industry in India relies primarily on the Indian Contract Act 1972 and few other provisions of the Indian Penal Code for dealing with fraud. The Insurance Regulatory and Development Authority (Health Insurance) Regulations, 2016 does not define health insurance fraud nor does it prescribe any civil or criminal liabilities for fraud. Unlike the Indian states, Croatia, Indonesia, the Philippines, Turkey, and the United States of America have regulatory frameworks within which health insurance fraud is an administrative, civil, and criminal offense.

Table 7: Anti-Fraud Responsibility and Staffing in Selected GSHIS

Scheme Administering agency

Full-time staff

Dedicated anti-fraud

unit

Dedicated anti-fraud

staff

Anti-fraud effortsoutsourced

MA and MAV Yojana (Gujarat)

Health Commissionerate

~460 No ~5 Partly - to the ISA

MJPJAY

(Maharashtra)

SHAS ~1,763 Yes ~50 Partly - to the insurer and the TPAs

CMCHIS

(Tamil Nadu)

TNHSP ~1,277 Yes ~36 Partly - to the insurer and the TPAs

Aarogyasri Scheme

(Telangana)

AHCT ~1,473 Yes 1 Partly - to the ISA


Source: Republic of Indonesia-Ministry of Health.11

Beneficiary fraud is mitigated using information technology (IT) solutions. All the selected states have a list of identified photo documents issued by the government that are valid identification proof for the scheme. Only Gujarat and Tamil Nadu use biometric thumb impression at the time of patient registration and discharge. As an additional security measure, Gujarat and Tamil Nadu use quick response (QR) coded cards and chip based smart cards respectively. Maharashtra is the only state where there is no mechanism for online verification and validation of ration cards against the online database of the Civil Supplies Department. Beneficiary enrollment is handled by outsourced agencies (ISAs in Gujarat and Telangana and TPAs in Tamil Nadu). The scheme-administering agency in Gujarat undertakes periodic enrollment audits to ensure de-duplication of cards.

Provider empanelment fraud is addressed through a system of transparent online application and assessment of all private providers. Public providers

11 Republic of Indonesia - Ministry of Health. Fraud prevention in the implementation of health security programs under the National Social Security System (Ministerial Decree No: 36-2015).

in all the selected states, except Maharashtra, are automatically deemed empaneled. Each state has a committee for empanelment of providers, which also addresses provider-related grievances and provides oversight. All private providers go through an on-site assessment against minimum empanelment criteria that includes available services, human resources, equipment, and infrastructure. In Tamil Nadu, provider-wise detailed assessment scores are published on the scheme website. This transparency has led to competing hospitals reporting incorrect information. The scheme-administering agency has acted on such reports and corrective actions have been taken. Tamil Nadu and Maharashtra provide a distinct feature where quality incentivization is built into the empanelment process. Pre-empanelment assessments lead to six-point grading, with higher grades eligible for higher tariff. In Tamil Nadu, all public providers are automatically assigned the highest grade. Maharashtra is the only state where the public providers undergo empanelment assessment and are eligible for grade-linked tariff, similar to the practice followed for private providers.

Defining Insurance Fraud in Indonesia

Fraud is a “…deliberate act by beneficiaries, health officials from the Social Insurance Administration Organization (BPJS), health care providers, and providers of medicine and medical devices to financially benefit from the health insurance program through fraudulent actions that do not comply with guidelines.”

Fraud by beneficiaries: (a) eligibility (that is, falsification of membership status) to obtain health services, (b) availing unnecessary services by falsifying health conditions, (c) granting of gratuities to service providers to avail of inappropriate/uncovered services, (d) manipulating income to not pay larger premiums, (e) cooperating with service providers to submit false claims, and (f) obtaining prescribed medicines/equipment for resale.

Fraud by service providers: (a) excessive diagnostic coding (that is, upcoding); (b) plagiarizing claims from other patients (that is, cloning); (c) phantom billing; (d) inflated billing; (e) service unbundling/fragmentation; (f) self-referrals by the doctor at another facility; (g) repeat billing; (h) extended length of stay; (i) manipulation of hoteling charges; (j) cancelled services; (k) medically unnecessary interventions; (l) deviations from service standards; (m) performance of unnecessary medical treatment; (n) increased length of time ventilator is used; (o) phantom visits; (p) phantom procedures; (q) readmissions; (r) conducting unnecessary patient referrals to receive benefits; and (s) asking for cost-sharing from beneficiaries not in accordance with regulations.


Mandatory pre-authorization for all procedures in all the selected Indian states is used for preventing and deterring fraud. Only Telangana is an exception where a few selected providers are exempt from pre-authorization of procedures up to an amount of INR 50,000 (US$758) for non-critical procedures and INR 100,000 (US$1,515) for critical procedures. Pre-authorization processes across all selected states are online, with approval turnaround time ranging between 12 and 24 hours and provision for authorization over telephone in cases of emergency. During the pre-authorization process, fraud is detected through verification of mandatory clinical documents (diagnosis and investigation reports) along with beneficiary identity details. There are multiple levels of scrutiny before authorization is issued. In Telangana, public providers have the flexibility to proceed with treatment without waiting for pre-authorization approval. This contrasts with Croatia, the Philippines, and the United States of America where pre-authorization is mandatory only for some high-end procedures.

Only Tamil Nadu uses a referral mechanism to contain cost and reduce unnecessary treatment. This covers only 38 stand-alone diagnostic procedures. Public providers act as gatekeepers. Stand-alone diagnostic procedures that are a part of the benefits package

cannot be availed without referral from a public provider. Other states have not adopted referral mechanisms.

All schemes undertake pre- and post-reimbursement medical claims and beneficiary audits to detect fraud. Across the four states, pre-claim payout audits are trigger based and the post-payout audits are sample and trigger-based. All deaths are audited in all states, except Maharashtra. All the selected states conduct a post-discharge beneficiary audit and verification over phone calls to the discharged beneficiaries. This compares with Croatia, Turkey, and the United States of America where pre- and post-payments audits are conducted, but most other countries conduct only post-payment audits. Like other countries, these audits include both public and private providers. But the process appears to be less rigorous for public providers in the Indian states.

Use of technology for pre-authorization and claims processing is central to fraud detection efforts. Whereas all the selected states use IT, the IT infrastructure and analytics is much weaker in India than internationally. All the selected states outsource technology infrastructure maintenance and management to specialized agencies either directly or through the appointed ISA/TPA/insurer. Technology platforms in all selected states, except

Table 8: Examples of Fraud Triggers from Gujarat and Tamil Nadu

Some examples of fraud triggers built into the IT system

Gender-disease mismatch Age-disease mismatch Past claim history

Repeated admission from same family/same ailment/same hospital

Prolonged stay for all medical management packages by the same hospital

Emergency intimation number obtained after performing the surgery

Frequent blocking of high-end procedures

Sudden surge in particular cases Unusually high number of day care treatments

Frequent chemotherapy requests in less than the prescribed duration

Multiple stents for single vessel disease

Patient switching hospitals in day care


Maharashtra, use limited triggers for rule-based and outlier-based alerting algorithms (see Table 8).

Global case studies revealed more advanced use of IT solutions. Turkey and the United States of America use advanced predictive/regression-based and machine-learning models and social network analysis for detecting suspected fraud. Sophisticated analytical tools are under pilot in Croatia. These examples could be emulated in India. The cost-effectiveness of the use of artificial intelligence technology in fraud detection could be explored.

Hotlines (call centers) are common across the selected states for detecting fraud. The hotlines provide avenues for beneficiary feedback. All the selected Indian states have instances where whistle-blowers have used hotlines to report suspected fraud. The hotlines feed into social audit mechanisms that inform corrective measures toward improving patient experience in seeking care. Interestingly, the United States of America undertakes active promotion of the whistle-blowing provision to promote fraud reporting.

Sanctions for fraud range from issuing show cause notices,12 to financial penalties, suspension, de-empanelment, delisting, and criminal prosecution. Sanctions in Maharashtra, Tamil Nadu, and Telangana are limited to non-legal actions (issuing show cause notices, financial penalties, suspension, de-empanelment). Gujarat is the only state which has taken criminal actions against erring providers. In all the selected states, sanctions are limited only to private providers, as in most countries.

Periodic review meetings and assessments further strengthen anti-fraud efforts and internal control measures. The scheme-administering agencies in all the selected states organize regular meetings

12 In India, show cause notices are written notices issued to the defaulting party clearly stating the defaults and providing them with an opportunity to justify their position and provide reasons as to why disciplinary/legal actions may not be initiated against them.

with providers, like in Indonesia. All the selected states conduct an annual assessment of the private providers to ensure continued compliance with the prescribed empanelment criteria. This is similar to the practice adopted in Croatia. Anti-fraud practices in the selected Indian states are compared with those in five countries in Table 9.

A detailed comparative overview of state-level anti-fraud practices is presented in Annex 1.

Some state differences in anti-fraud efforts are notable:

To ensure adequate fraud detection capacity, �

Tamil Nadu recruits only retired personnel from the state police forces as district vigilance officers. Among other responsibilities, these officers follow up with patients after discharge.

To prevent and deter beneficiary fraud, under the �

MA Yojana and MAV Yojana in Gujarat, beneficiary cards are renewed every three years, for which beneficiaries have to produce recent income certificates from the designated government authorities.

All public and private providers in Maharashtra �

are assessed for their readiness to provide services under the scheme. Public providers are not automatically empaneled.

As a medical fraud prevention practice, �

Maharashtra has developed detailed procedure-wise protocols for pre-authorization. These protocols, developed by a special committee of specialists drawn from apex medical institutions, are more than a list of mandatory investigations. It is modelled around how clinical protocols are developed and act as a decision-support tool for determining procedure(s) to be performed. These protocols were rolled out in 2015 after piloting. In 2016, the protocols were embedded in the claims management software. The automated protocols are being piloted in 14 empaneled hospitals.


Table 9: Fraud Management Practices under Selected GSHISs in Indian States and Other Countries

No.Aspects of the

Scheme

Indian States

Cro

atia

Indo

nesi

a

Phili

ppin

es

Tur

key

USA

Guj

arat

Mah

aras

htra

Tam

il N

adu

Tela

ngan

a

1 Number of individuals covered (in millions)a

31 103 61 31 4 187 97 79 55

2 Fraud management responsibility

Public agency

Public agency

Public agency

Public agency

Public agency

Public agency

Public agency

Public agency

Public agency

3 Insurance specific legislation

No No No No Yes Yes Yes Yes Yes

4 Total staff ~459 ~1,763 ~1,277 ~1,473 ~2,000 ~7,000 ~5,000 ~26,000 ~4,000b

5 Total no. of Aarogyamitras

~242 ~1,200 ~757 ~1,076 – – – – –

6 Explicit list of services

Yes Yes Yes Yes Yes No No Yes Yes

7 Providers (both public, private)

Both Both Both Both Both Both Both Both Both

8 Pre-authorization All cases

All cases All cases

Most cases

For selected conditions and procedures conducted abroad

No Selected high cost cases

For sample, part of audit

Selected cases

9 Case-based bundled payment

Yes Yes Yes Yes Yes Yes Yes Yes Yes

10 Global budgetc No No No No Yes No No Yes No

11 Pay for performanced

No No No No Yes No No Yes Yes

12 Volume control No No No No Yes No Yes Yes Yes


No.Aspects of the

Scheme

Indian States

Cro

atia

Indo

nesi

a

Phili

ppin

es

Tur

key

USA

Guj

arat

Mah

aras

htra

Tam

il N

adu

Tela

ngan

a

13 Standard Treatment Guidelines (STG)

No No No No Yes Yes No Yes Yes

14 Compliance to STG

No No No No Yes Yes No Yes Yes

15 Processing of claims in-house

No No No No Yes Yes Yes Yes No

16 Claims processing is electronic

Yes Yes Yes Yes Yes Yes No Yes Yes

17 Pre-payment medical audit

Yes Yes Yes Yes Yes No Yes Yes Yes

18 Post-payment medical audit

Yes Yes Yes Yes Yes Yes Yes Yes Yes

19 Fraudulent acts are defined

No No No Yes Yes Yes Yes Yes Yes

20 Sanctions against public providers

No No No No Difficult Difficult Difficult Yes Yes

21 Sophisticated analytical tools

No No No No Under pilot

Yes No Yes Yes

Note: a. For Indian states, the number of individuals covered is estimated using the average household size for respective states based on Census 2011 data.

b. Excludes staff of approximately 16 TPAs.

c. Global budgets assure hospitals of a prospectively set amount of revenues over time. This assurance acts as an incentive and helps reduce the probability of fraud.

d. Pay-for-performance models provide financial incentives to provide for determined performance measures and health outcomes thereby reducing the incentive for fraud.


This has helped standardize pre-authorization submission requirements and reduce subjectivity in pre-authorization decisions.

As a medical fraud detection practice, the �

CMCHIS in Tamil Nadu has a Morbidity and Mortality Review Committee of medical specialists that conducts comprehensive clinical review (sample and trigger-based) of all the mortality claims and selected morbidity claims.

The scheme-administering agency in Tamil Nadu �

schedules weekly walk-in meetings where any stakeholder or citizen (beneficiary or otherwise) can walk in with grievances and complaints. Such complaints are addressed instantly to the extent possible. Easy access to the complaint and grievance redressal system acts as a deterrent against fraudulent practices.

Maharashtra and Telangana offer an interesting �

social audit method. Immediately on discharge of a patient, a letter from the Chief Minister’s office is issued to the patient providing details of services sought and claim amount and enquiring about the quality of services. Feedback is encouraged through self-addressed and prepaid postal envelopes. Almost 50 percent of the discharged beneficiaries in Maharashtra respond to this letter. Feedback is analyzed and acted upon. There is a full-time dedicated staff to handle this function in the scheme-administering agency in Maharashtra.

Maharashtra and Telangana have a full-time �

outreach worker in each public primary health center (PHC) called the PHC Aarogyamitra, who is responsible for post-discharge follow-ups and demand creation.

Chapter 5: Key Takeaways 19

Some key takeaways emerging from this documentation may assist the central and state governments determine their anti-fraud investment strategies for efficient use of public resources.

Fraud prevention

Institutional responsibility for preventing fraud should lie with the public agency that administers the scheme. Intermediaries like the insurer, ISA, or the TPA play only a supportive role that does not substitute the primary anti-fraud responsibility of the public agency. The institutional setup of the agencies should have structures for anti-fraud efforts like the Central Claims Monitoring Committee in Maharashtra or the Mortality and Morbidity Review Committee in Tamil Nadu.

An overarching fraud framework/policy exists in all global cases and is recommended. Framework/policies should have a clear definition of health insurance fraud and abuse, distinguishing it from error and waste. The policy should prioritize fraud that is systemic, adversely affects the beneficiaries, and affects the scheme’s ability to fulfil its mission. Consequences of fraudulent behavior should be clearly spelled out in the provider and other intermediary contracts. Definitions of insurance-related fraud in Indonesia and the United States of America are good

examples. Merely embedding anti-fraud provisions in operational documents and guidelines, as seen in the Indian states, is not adequate.

All scheme-administering agencies should have dedicated anti-fraud units and staff. The anti-fraud unit should have an operational plan, adequate staff at the state headquarters and in each district, and adequate capacities for conducting investigations. Heavy dependence on Aarogyamitras to prevent fraud in the Indian state schemes makes it imperative for scheme-administering agencies to recruit them directly, instead of through a TPA or an ISA and ensure that they are available round-the-clock in each empaneled hospital. There is a need for increased investment in human resources by the scheme-administering agencies and for focus on capacity development. States may undertake a cost-benefit analysis of one full PHC Aarogyamitra in each PHC before adapting the practice to other states. The anti-fraud unit staffing norms and competency matrix may be developed by the Government of India as a guidance for states.

Scheme-administering agencies should have strong oversight capacity at the state and district levels. Oversight capacity should be strengthened with active engagement of the State Health Societies and the Directorates of Health Services. The existing

5. Key Takeaways


sub-state structures (like the regional/divisional management units and the District Health Societies) should be leveraged for ensuring intersectoral convergence in oversight functions. This is reasonably strong at the state level in all states in the governing body of the scheme-administering agencies and at the district level in Maharashtra.

Beneficiary fraud can be reduced through technology-based identification and verification. Government-issued identification cards should be validated with at least one publicly owned online beneficiary database as seen in Gujarat, Telangana, and Tamil Nadu. These states are good examples for the use of biometric thumb impressions at the time of enrollment, patient registration, and discharge, making the beneficiary identification procedure more robust.

A robust and transparent empanelment process for all types of providers (public and private) can not only be a fraud prevention tool but can also ensure quality of care. It is important for public providers to undergo the same assessment process as the private providers. This will not only ensure a competitive and more equitable provider environment and contribute toward quality of care but may also gradually reduce beneficiary incentive for preferring private providers. The Maharashtra model could be considered for replication in other states.

Pre-authorization reviews can be used for preventing and deterring fraud. The pre-authorization process could be further strengthened using procedure-wise protocols that are modelled around clinical protocol templates and aid the treating team in decisions related to appropriateness of a procedure to be performed. Tested pre-authorization protocols, once embedded and automated within the claims management software, standardizes pre-authorization submissions and reduces subjectivity in pre-authorization decisions.

The Maharashtra model could be looked at for replication in other states.

Fraud detection

Online claims review with comprehensive fraud triggers and advanced data analytics could strengthen fraud detection efforts. There is an ample scope to strengthen data analytics using state-of-the-art IT. With high coverage levels and increased demand generation efforts, it is imperative to upgrade the technology platform to enable advanced algorithms for fraud detection, predictive/regression-based and machine-learning models, and social network analysis.

Multiple audits can help triangulate data for timely fraud detection. GSHISs should have a dedicated audit team and an annual audit plan. Audits include pre-authorization audits, pre- and post-payment audits, hospital audits, beneficiary audits during hospitalization, and post-discharge and death audits. Capacity for audits should be developed in-house or sourced-in from the open market. Scheme-administering agencies should have the mandate to audit empaneled public providers with the same rigor used for private providers. There should not be a differential approach in the purchaser-provider transaction management and monitoring based on provider type.

Social audit efforts can feed into fraud detection and over time have a deterring effect as well. Beneficiary grievance redressal system is essential, backed by a round-the-clock toll-free helpline for beneficiaries to file their complaints. Innovative mechanisms of seeking beneficiary feedback such as a letter from the Chief Minister to all discharged beneficiaries help detect fraud and also act as a deterrent on erring providers. States may explore leveraging upon the community-based monitoring mechanisms that have been set up under other health programs of the state and central governments, such as the ‘Community

Chapter 5: Key Takeaways 21

Action for Health’ initiative under the National Health Mission.

Fraud deterrence

Develop STGs to ensure quality of care and deter fraud in clinical diagnosis and management that may be harmful to beneficiaries. Health outcomes are as important as ensuring coverage. With multiplicity of providers, STGs ensure standardization of care and aid clinical audit of provider claims. It is important to socialize STGs among providers and ensure that compliance to STGs is a contractual obligation having legal consequences.

Undertake robust costing exercises to inform tariffs and settle compliant claims in a timely manner. It is not just ‘how’ providers are paid that matters for fraud but also ‘how much’. Inadequate reimbursements – even after controlling for potential volume gains – will deter some providers from empanelment; among others who do empanel, this increases the motivation for undertaking fraud given that there is the perception that reimbursements are not reflecting a fair exchange. In the same vein, delays in timely settlement of claims also create the environment and motivation for providers to undertake fraud.

Maximize data quality at source. A high degree of data quality is critical to identify fraud in empirical data with acceptable precision. Error-prone data make it almost impossible to detect fraud. During the setting up of a new scheme, there is a unique opportunity to improve data quality during the design phase of data systems and user interfaces. In many cases, data errors and coding inconsistencies can be alleviated with simple software tweaks, clear guidelines, and provider training.

Follow-up and hold perpetrators accountable. Follow-up on likely cases of detected fraud is key. This can involve a range of activities, such as requesting clarification from the provider and investigating further. This step is also critical to maintain a threat of detection as a deterrence. Not all cases identified will be truly fraudulent in the sense of being knowingly and intentionally misleading. However, it is valuable to seriously investigate and, if warranted, prosecute providers where appropriate. A credible threat of detection and punishment can deter potential fraud on a larger scale and lower the cost than actual investigations. The threat should be real and, importantly, needs to be perceived as real and likely by the providers.

Ensure allocation of adequate and timely resources for scheme administration and claims reimbursement. State governments should ensure timely payment of insurance premium. This is especially critical for states that chose the assurance mode of implementation and cover the risk themselves.

Regularly monitor and evaluate scheme performance. Combating fraud is a dynamic process and implementing a culture of monitoring, evaluation, and feedback mechanisms, including related to provider compliance metrics, claims data analysis, error rates, quality metrics, patient satisfaction indicators, and so on can help reduce the incidence of fraud and bolster confidence in the scheme. In this regard, a combination of approaches—from audits to different types of data mining algorithms—are likely to be most effective. Implementing and comparing different anti-fraud efforts, for example, across states, can help inform the design, refinement, and implementation of future anti-fraud efforts.


No. Aspects of the Scheme MA and MAV Yojana

(Gujarat)

MJPJAY (Maharashtra)

CMCHIS (Tamil Nadu)

Aarogyasri Scheme

(Telangana)

1 Dedicated vigilance unit No Yes Yes Yes

2 Dedicated staff for fraud management

No Yes Yes Yes

3 Documented fraud management policy

No No No No

4 Regulation on provider activity:

Volume control No No No No

Feedback to providers Yes Yes Yes Yes

Defined budget targets No No No No

Through service level agreement

Yes Yes Yes Yes

5 Pre-authorization For all procedures For all procedures For all procedures For most proceduresa

6 Minimum documentation required for pre-authorization

Yes Yes Yes Yes

7 Responsibility of claims processing

ISA TPA TPA ISA

8 Minimum documentation required for submitting claims

Yes Yes Yes Yes

Annex 1: Overview of State Schemes



(Gujarat)


CMCHIS (Tamil Nadu)

Aarogyasri Scheme

(Telangana)

9 Claims submission mode (online/hard copy/both)

Both Online Online Online

10 Photo documentation of patients required

For all procedures For all procedures For all procedures For all procedures

11 Use of IT for fraud analytics: Basic level No Basic level Basic level

Outlier analysis Yes Yes Yes Yes

Rule-based analysis Yes Yes Yes Yes

Social network analysis No No No No

Predictive modelling No No No No

Automated fraud triggers Yes No Yes Yes

12 Internal control mechanisms:

Pre-authorization audit Yes - sample Yes - sample Yes - sample Yes - sample

Claims audit Yes - sample Yes - sample Yes - sample Yes - sample

Clinical audit Yes - sample Yes - sample Yes - sample Yes - sample

Death audit N.A. No Yes - 100% Yes - 100%

Post-discharge beneficiary audit

Yes - sample Yes - sample Yes - sample Yes - sample

On-site verification of providers

Yes Yes Yes Yes

Audit agency ISA +

Government

TPA +

Government

TPA +

Government

ISA +

Government

13 Providers that are subject to claims audit (public, private, or both)

Only private Both Both Only private

14 Documented guidelines for internal control systems

No No No No

15 Insurance specific regulation/laws to prevent fraud

No No No No



(Gujarat)


CMCHIS (Tamil Nadu)

Aarogyasri Scheme

(Telangana)

16 Provider contracts exist For private providers

For public and private providers

For private providers


17 Explicit definition of fraud and abuse in provider contracts

No No Yes Yes

18 Sanctions for fraud included in provider contract:

No Yes Yes Yes

Financial penalties Yes No Yes Yes

Blacklisting/ de-empanelment





Delisting For private providers




Legal proceedings For private providers

For public and private providers



19 Enforcement of legal consequences

Yes No No No

20 Enforcement of management consequences (warning, suspension, de-empanelment)





21 In-house anti-fraud training No No No No

Note: Exceptions: (a) Select private providers are exempt from pre-authorization of non-critical procedures up to INR 50,000 and critical procedures up to INR 100,000 and (b) public providers do not need to wait for pre-authorization approvals before starting treatment.


Introduction

Gujarat is a state in western India with a population of 62.7 million. It is among the top five major state economies in India, accounting for 7.6 percent of the country’s gross domestic product (GDP) with nearly 5 percent of the country’s population.13 Its TGHE is 5.9 percent of the total state expenditure and 0.8 percent of the GSDP resulting in a per capita TGHE of INR 1,156 (US$18) in 2014–2015.14

In 2012, the Government of Gujarat launched a health insurance scheme called the ‘Mukhyamantri Amrutum Yojana’ (MA Yojana). It provides inpatient benefits to BPL families and covers selected tertiary surgical procedures through a network of empaneled providers.

The Schemes

The MA Yojana and the MAV Yojana (expanded version of MA Yojana to include additional beneficiary categories and increased income eligibility limits) are managed and administered jointly by the Government of Gujarat. The MA Yojana covers all

13 Directorate of Economics and Statistics, Government of Gujarat https://gujecostat.gujarat.gov.in/sites/default/files/STATE-DOMESTIC-PRODUCT-GUJARAT-STATE-2015-16-15052018.pdf.

14 National Health Profile 2017. Ministry of Health and Family Welfare, Government of India.

Annex 2: Case Study: Mukhyamantri Amrutum (MA) and MA Vatsalya (MAV) Yojana, Gujarat

BPL families. The MAV Yojana, on the other hand, covers all families with annual household income of up to INR 300,000 (US$4,545), frontline health workers (ASHAs), reporters, fixed-pay Gujarat state government employees (class 3 and 4), and unorganized workers holding an unorganized worker’s identification number (U-WIN) card (issued by the state government). It also includes all women and children below the age of 21. Senior citizens with annual family income of up to INR 600,000 (US$9,090) are included as well. Up to five members

MA Yojana and MAV Yojana (2012 to May 2018)

Beneficiary families covered: 6.2 million z

(50 percent of total families in the state)

No. of claims processed: 1.07 million z

Claims amount: disbursed: INR 14,699 million z

(US$223 million)

In 2017-18:

No. of claims processed: 467,049 z

Total claims value: INR 6,904 million (US$105 z

million), which is approximately 9 percent of the Health Department’s budget (Revised Estimates)


Human Resources (MA Yojana & MAV Yojana)

SNC staff: 47 staff

State level: 15 z

District project officers: 32 z

ISA staff: 412

State level: 98 z

District level: 72 z

Aarogyamitras: 242 z

Medical audit team (included in the numbers above):

Coordinators at the state level: 2 z

Team of empaneled specialists z

District coordinator for audit (1 in each of the z

32 districts) employed by the ISA

Providers:

One full-time hospital Arogyamitra who is the z

MEDCO (employed by the provider)

in a family are covered under the MA Yojana and MAV Yojana. There is no difference between the MA Yojana and the MAV Yojana in terms of benefits. The package comprises a positive list of explicitly defined tertiary care packages of 698 procedures/surgeries covering nine clinical specialties, including burns, cardiac, cancer, kidney, neurosurgeries, neonatal diseases, poly-trauma, and joint replacement. The schemes provide a risk cover of INR 300,000 (US$4,545) per family per year on a family floater basis, with an additional INR 200,000 (US$3,030) per year for kidney, liver, and pancreas transplants. Knee and hip replacements are covered with a cap of INR 40,000 (US$606) per replacement, above which the costs have to be paid by the patient.

The MA Yojana and MAV Yojana are directly administered by the Government of Gujarat in an assurance mode. This is done through the Commissionerate of Health, Family Welfare, Medical Services, and Medical Education with operational support from an ISA, MD India Healthcare NewtworX Private Ltd., and a public sector IT solutions provider, (n) Code. The ISA is responsible for empanelment of hospitals; claim processing; deployment of Aarogyamitras; information, education, and communication (IEC) activities; and the call center while the IT solutions provider focusses on card printing and distribution, development of software, setting up of kiosks at the service delivery points, and enrolment of beneficiaries. The MA Yojana and MAV Yojana have enrolled 73 percent (6.21 million) of the total targeted 8.5 million families. This is equivalent to 50 percent of the total families in Gujarat.

Organizational Structure for Implementing the Insurance Scheme

An SNC, set up under the Commissionerate of Health, Family Welfare, Medical Services, and Medical Education for the operations and management of the MA Yojana and MAV Yojana, is primarily responsible for fraud prevention, detection, and management.

The SNC has an Executive Committee chaired by the Principal Secretary, Public Health and Family Welfare. Other members include the Principal Secretary, (Expenditure), Additional Secretary (Medical Services), Mission Director (National Health Mission), Deputy Secretary (Rural Health), and representatives from the ISA and the IT agency. The Executive Committee of the SNC reports to the Health Minister and the Finance Minister. The executive head of the SNC is the project director, an officer from the Indian Administrative Services, who provides policy guidance, leadership, and oversight on the management of the scheme. For the organogram, refer to Exhibit 1: Organogram - SNC, Gujarat. The SNC has 47 full-time staff and a panel of medical specialists. All the ISA and IT agency staff are full-time and have the requisite experience. They have defined job descriptions and designated reporting authorities.


implementation cycle. Aided by a comprehensive technology platform designed and managed by an independent IT agency, the state and district teams of the MA Yojana and MAV Yojana have mechanisms in place that are aimed at preventing and detecting frauds. Most common frauds include charging money from beneficiaries, unnecessary preadmission investigation, overuse of procedures, and upcoding (billing higher rates than services rendered). The IT platform is enabled with fraud triggers related to enrollment and claims. It allows for rule-based and outlier analysis, though advanced data mining techniques and high-end analytics are not used.

Fraud during beneficiary enrollment is addressed through a beneficiary enrollment process that includes multi-level verification of beneficiary records, including photographs with the BPL list of the relevant government departments and issuing of bar (QR) coded ‘MA/MAV’ cards that need renewal every three years with updated financial eligibility certificates. Each card has a unique registration number (URN) which is issued after the mobile password-based verification, photo identification document verification, and income certificate verification from the relevant designated authorities. As a further step toward security and fraud control, the name of the head of the family is verified from the BPL database and the issued cards include the picture of the head of the family and biometric thumb impressions of all the enrolled family members along with their basic details. Before issuing the ‘MA/MAV’ card, each beneficiary is verified by the taluka verifying officer. All the details are stored in a central server and are available on a real-time basis. In case of offline enrollment application, during data upload, the operator and field verifying authority verify the thumb impression before uploading the application. Periodic de-duplication of cards is done through verification with the ration card and photo ID number and if a duplicate card is identified, it is automatically blocked,

Policies and Legislations for Fraud Prevention, Detection, and Management

The MA Yojana and MAV Yojana do not have an explicit fraud management policy or plan. The scheme leadership ensures ongoing need-based policy interventions. For example, to account for inflation in market rates, in 2015, the SNC increased the package rates by 15 percent to ensure that reimbursements reflected a fair exchange.

The fraud prevention, detection, and management functions are integrated within all the processes under the MA Yojana and MAV Yojana. There is no dedicated fraud management unit. District teams deployed by the ISA handle all fraud management functions under the guidance and leadership of the District Advisory and Grievance Redressal Committee and the state team.

Sanctions for fraud include civil and criminal actions, financial penalties, suspension, de-empanelment, and delisting. There is no insurance-specific state legislation. The ISA and health provider contracts do not include the definition of fraud or explicitly mention the consequences of fraud in the contracts. However, there is a clear protocol established for the SNC on follow-up actions pursuant to instances of abuse/fraud, including refund of the amount illegitimately charged from the beneficiary in the first instance; 100 percent penalty is charged the second time; that is, the hospital refunds the money that is overcharged to the beneficiary and an equal amount is deducted from the claim; the third time the full claim is rejected; and in the fourth instance the provider is de-empaneled for a period of three years along with criminal proceedings against the provider.

Processes for Fraud Prevention, Detection, and Management

Fraud prevention, detection, and management processes are built into every stage of the scheme


and the duplicate document reference number is noted. All the enrollment details and documents are checked randomly. If there are reports of money being charged from beneficiaries during enrollment, criminal proceedings are initiated against such field staff/verifying authority. Recently, notices have been issued to the operator through the local police in two instances. At the time of enrollment, under both online and offline methods, a SMS is sent to the beneficiary family intimating whether the card has been issued or blocked. A reminder SMS is also sent to the beneficiary family whose card may be blocked on the three-year expiration of the income certificate.

Empanelment fraud is deterred through online application of providers, followed by pre-empanelment assessment of infrastructure, equipment, and human resources. However, public providers are automatically empaneled. All public providers at the level of sub-divisional hospital and above, having minimum 50 beds, are automatically empaneled. A team of two local self-government (Zilla Panchayat) officials, the civil surgeon, one representative from the ISA, and two representatives from the SNC undertake physical verification and on-site assessment of private providers who apply online and fulfil the minimum eligibility criteria for empanelment. The assessment report is shared with the District Advisory and Grievance Redressal Committee and the State Empanelment Grievance Redressal and Disciplinary Committee that take final decisions regarding provider empanelment. All private providers enter into one-year renewable service agreement with the ISA. There are no legal agreements between the ISA and the public providers. Regulation of providers is exercised by monitoring compliance to service agreement and monitoring utilization trends and claims patterns.

The MA Yojana and MAV Yojana have robust beneficiary identification mechanisms that use designated government identification documents

and validation through bar coded cards and biometric identification. Each empaneled provider has a full-time Aarogyamitra (insurance coordinator employed by the ISA) and hospital Aarogyamitra (a full-time medical doctor designated by the provider) who handle an exclusive patient helpdesk for beneficiaries. The Aarogyamitra registers beneficiaries for treatment only after verifying the identity. The bar-coded MA and MAV cards have the photographs and fingerprint details of the beneficiaries. Only after the identity is verified is the beneficiary referred to the hospital Aarogyamitra for clinical assessment and diagnosis. Biometric verification of the beneficiary is also done at the time of discharge.

Mandatory pre-authorization for all procedures is used for preventing and deterring fraud. Both public and private providers must seek pre-authorization for all procedures. Providers submit online pre-authorization requests to the ISA. The ISA assesses the pre-authorization requests and subject to compliance with all documentary requirements and available sum assured, pre-authorization is issued within 24 hours. Emergency cases are admitted with telephone intimation to the call center run by the ISA (against a number generated by the call center) and within 24 hours of admission the pre-authorization request is submitted to the ISA. This ensures that there is no delay in the treatment of emergency cases. The design of the MA Yojana and MAV Yojana also allow for beneficiary intervention on account of pre-authorization fraud. On the submission of a pre-authorization request by a provider, an auto SMS alert

Empaneled Providers (MA Yojana & MAV Yojana, as of May 2018)

Total providers: 185

Public hospitals: 22

Stand-alone dialysis centers: 49


is immediately sent to the registered mobile number alerting the beneficiary of the amount for which pre-authorization has been requested. There are in-built checks in the claims management software that restrict patients from using the MA/MAV card in multiple locations.

Claims fraud is prevented and managed through a rigorous non-medical and medical verification of claims by the ISA. Providers submit their claims online along with original copies of the claims and all supporting medical records and investigations. Claim submission can only be done online after the biometric validation and photograph of the beneficiary is uploaded and once the claim is submitted no further transaction can be made. All hard copies are meticulously catalogued by the SNC for easy retrieval, access, and future audits. Fraud triggers are built into the Hospital Management Information System that aid rule-based and outlier-based analysis and review. Some of the parameters used to rule out inconsistencies, morphing, falsification in records are (a) completeness of required documentation; (b) consistency in clinical history of the patient during hospitalization and the line of treatment; and (c) critical examination of investigations reports, radiology images, and patient photographs. The ISA undertakes 100 percent physical verification of the online claim files with submitted claim documents. In addition, there are random calls to the patients. The approved claims amount is forwarded to the SNC for further action. As an additional control measure, all financial approvals are issued by the Director of the Health Commissionerate and payments are released within 45 days of the submission of claims.

Though there are no procedure-specific STGs, the MA Yojana and MAV Yojana have clinical/technical guidelines and specifications for a few specialties such as burns, joint replacement, and tissue dissection and quality parameters for soft tissue expanders.

The insurer makes case-based bundled payments to the providers, thereby reducing the probability of any fraud in upcoding and unnecessary billing. Reimbursements are based on predefined package rates. The tariff structure is fixed through a bidding process for each of the listed procedures. The lowest rate quoted for a procedure is not necessarily taken up as the final tariff. If the committee decides that the lowest quoted rate is not feasible in comparison with the prevalent market rates, it undertakes due diligence before determining the tariff. No co-payments are required except for joint replacements, where the cover under the MA Yojana and MAV Yojana is limited to INR 40,000 per replacement.

An incentive of 10 percent over the package price is allowed to providers who are accredited by the NABH/Joint Commission International (JCI)/Australian Council on Healthcare Standards (ACHS) or any other accreditation body approved by the International Society for Quality in Healthcare.

Pre- and post-claims reimbursement audits are conducted by the ISA and the SNA to detect fraud. Audits are restricted only to private providers. The ISA audits 2 percent to 5 percent of randomly selected claims. In addition, 25 percent of those admitted and receiving treatment are audited by the ISA and the SNC during hospitalization. Each private hospital is audited annually. For example, abuse in the type of catheter used during chemotherapy was detected during a claim review. An inspection visit to the hospital detected similar malpractice in four cases admitted at that time in the hospital. After further due diligence the provider was suspended.

Additional Internal Control Measures

Additional control measures include reviews by the Executive Committee of the SNC, on-site verification, patient feedback mechanism, and an IT system that allows for auditing of out-of-pocket


payments. The Executive Committee of the SNC meets regularly to review the progress of the MA Yojana and MAV Yojana. Regular on-site verifications are central to fraud detection practices. Weekly review meetings are scheduled between the SNC, ISA, and IT agency to discuss and resolve any issues. There are restrictions on the number of empaneled hospitals in which the specialists can serve (up to a maximum of three) and there are also checks to detect that not more than one surgery is scheduled at the same time.

District coordinators undertake random surprise visits to the empaneled providers for physical verification of the beneficiary identity of those hospitalized and the details are recorded in a hospital audit form. Post-discharge beneficiary audits are also conducted by the regional and district coordinators and the observations are recorded in a structured field audit form. For suspected cases, technical audits are undertaken with experts. Criminal action is taken against the hospital if fraud is detected. For example, a field audit had indicated that the patient was operated for hernia (not included under the MA Yojana) rather than stenting for which pre-authorization was undertaken and a police complaint was filed against the hospital. The Audit Department of the state government undertakes periodic process audits.

The IT system allows for auto calculation and update of available sum assured after adjusting all previous claims paid within the policy year. It captures the patient’s contributions if any (either co-payments for joint replacement or payments instead of expenses

above the sum assured). This creates a trail for audit of out-of-pocket expenses, if any.

Patient feedback mechanisms feed into the fraud detection efforts. At the time of discharge, a patient satisfaction form is filled up. This is a mandatory requirement for claims submission. In addition, the MA Yojana and MAV Yojana call center makes random calls to beneficiaries within a week of discharge to detect fraud. In one case, responses from the beneficiary indicated a surgical procedure that was not included in the package list. Further investigations revealed that the pre-authorization was taken for another procedure. Criminal proceedings were initiated against the provider.

Conclusion

The MA Yojana and MAV Yojana have a very proactive and pragmatic leadership that has ensured frequent modifications in the scheme to make it responsive to the health protection needs of the population. The beneficiary enrollment and identification process and the processes related to pre-authorization and claims review are strong. There is also criminal action that the state has pursued against specific cases of fraud that are likely to act as a strong deterrent to other providers indulging in similar practices. However, some of the areas that the MA Yojana and MAV Yojana may explore strengthening include developing an explicit fraud management policy and guidelines, greater oversight over empaneled public providers, augmenting capacity for data mining and advanced data analytics, and developing clinical pathways to improve quality of care.


Introduction

Maharashtra, a state in the western region of India, ranks second in the country by population (112.4 million). It is among the most economically advanced Indian states, accounting for almost 15 percent of national GDP. In 2015–2016, Maharashtra’s TGHE was 5.1 percent of the total state expenditure and 0.6 percent of its GSDP, with a per capita TGHE of INR 1,011 (US$16), almost the same as the all-India per capita public expenditure on health which was INR 1,112 (US$17).15 To strengthen access to quality secondary and tertiary health care and provide financial protection against catastrophic health expenses in the poor households, in 2012, the Government of Maharashtra announced a flagship health insurance scheme Rajeev Gandhi Jeevandayee Arogya Yojana, which was renamed as Mahatma Jyotiba Phule Jan Arogya Yojana in 2017.

The Scheme

The MJPJAY provides cashless secondary and tertiary medical and surgical treatment requiring hospitalization to all families having an annual household income of up to INR 100,000 (US$1,538). In addition, the beneficiaries of the MJPJAY include

15 National Health Profile 2018. Central Bureau of Health Intelligence. Government of India.

Annex 3: Case Study: Mahatma Jyotiba Phule Jan Arogya Yojana, Maharashtra

farmers from 14 agriculturally distressed districts of the state. The unit of enrollment under the MJPJAY is families and a maximum of five members in a family can avail the benefits. The benefits package comprises a positive list of explicitly defined packages that has 971 medical and surgical procedures and 121 follow-up packages from 30 clinical specialties. Surgeries constitute 73 percent of the total procedures. The MJPJAY provides a risk cover of INR 150,000 (US$2,308) per family per year on a family floater basis. For renal transplants,

MJPJAY(Cumulative from 2012 to July 3, 2018)


Population coverage: 90 percent z

(approximately)

No. of claims: 1.71 million z

Amount pre-authorized: INR 37,874 million z

(US$583 million)

In 2017–2018:

No. of claims: 471,104 z

Total claims outgo: INR 10,089 million (US$155 z

million), which is approximately 9 percent of the public health and medical education and drug departments budget estimates for that year


the cover is up to INR 250,000 (US$3,846) per family per year.

The MJPJAY is administered by a quasi-autonomous body, the SHAS, set up by the Government of Maharashtra. The SHAS has contracted a public sector insurance company that covers the risk and implements the scheme at an annual premium of INR 690.16 The insurer has appointed three TPAs to handle the operations in clustered districts.


The SHAS has a strong governance structure with highest political representation in the state. The Governing Council of the SHAS is presided by the Chief Minister of the state. The Vice-President of the SHAS is the Minister of the Public Health and Family Welfare Department. In addition to the President and Vice-President, there are 17 members which include three ministers and senior-level bureaucrats of health, planning, finance, law, medical education, civil supplies, and labor departments.

The SHAS has a defined organizational structure that is aligned to the implementation needs of the MJPJAY. The chief executive officer (CEO) of the SHAS is an officer from the Indian Administrative Services or allied services, who provides policy guidance, leadership, and oversight on the management of the MJPJAY. It has 74 full-time staff working in 16 departments/units that include empanelment, pre-authorization, claims, grievance, and vigilance among other departments. For the organogram, refer to Exhibit 2: Organogram - SHAS, Maharashtra. At the district level, the SHAS employs 39 district coordinators (medical doctors) who report to 6 regional managers.

The MJPJAY has strong administrative oversight and mechanisms for engagement with the Health Department at the district level and with the district

16 This premium amount is valid until December 2018.

administration. For administration of health services, the government has divided the state into eight circles. Each circle is headed by a deputy director. The deputy directors are responsible for monitoring the regional managers of the MJPJAY. Each district has an MJPJAY monitoring unit chaired by the district collector. The civil surgeon, who heads the Health Department in a district, is the member secretary of the monitoring unit. In addition, the performance of the MJPJAY is reviewed by the guardian minister and the CEO of the Zilla Parishad of the district in their periodic administrative review meetings.

Operations staff at the district level are recruited and managed by the TPAs. They include a district manager, a district medical officer, and a vigilance officer in each district; three Arogyamitras for each network hospital; one Arogyamitra in each PHC of the district; and one supervisor for every 20 Arogyamitras. Refer to Exhibit 2: Organogram - SHAS, Maharashtra.

Human resources in the MJPJAY

Organizations Staff numbers

State Office

District Operations

Total

State Health Assurance Society

74 45 119

TPA 1: MD India 145 907 1052

TPA 2: Paramount 77 196 273

TPA 3: Mediassist 77 242 319

Total* 373 1390 1763

Total Hospitals Arogyamitras 795

Total PHC Arogyamitras 405

* Total numbers include all Hospital Arogyamitras & PHC Arogyamitras



The MJPJAY does not have an explicit fraud management policy or plan. In general, policy decisions and management actions are aimed at reducing fraud. An example of fraud prevention-oriented policy decision is reserving 13 percent (131 of 971 procedures) often-abused secondary care procedures like hysterectomy only for public providers. Management actions aimed at preventing fraud include detailed guidelines for beneficiary identification, pre-authorization, claims processing, and other important aspects of scheme implementation that guide all fraud prevention and detection practices.

Fraud detection efforts are spearheaded by a dedicated Vigilance Department within the SHAS with a total team of 54 staff (including those of TPAs) dedicated for anti-fraud efforts. The Vigilance Department of the SHAS has two dedicated staff at the state level supported by three full-time staff of the TPAs dedicated for vigilance. At the district level, the TPAs have about 9 full-time staff for vigilance and a cadre of 40 district vigilance officers.

The provider’s contract does not define fraud under the MJPJAY. However, it has a reference to criminal prosecution in cases of detected fraud. Providers are regulated through the contracts they have with the insurer. Under the MJPJAY, each public provider also enters into a contract with the insurer. There is no difference in the contracting mechanism of the public and private providers.

Sanctions for fraud include putting providers on a watchlist, temporary suspension, detailed investigation, issue of show-cause notice, and de-empanelment and delisting of providers. These sanctions are listed in the provider agreement under ‘Processes for de-empanelment’ which may be because of any breach of contract, including fraud. There are no financial penalties. There are no sanctions for the public providers either.


There is no beneficiary enrollment drive under the MJPJAY. Eligible beneficiaries can directly walk into any empaneled provider facility and avail the services with the mandatory identification documents. Beneficiaries are enrolled at the point of service at the time of registration for treatment.

Empanelment fraud is deterred through online application, followed by a pre-empanelment assessment of public and private providers. There is no difference in the empanelment process based on provider type. The MJPJAY portal has a provision for online submission of applications for empanelment. All private and public hospitals that fulfil the minimum eligibility criteria can apply. The empanelment process includes an assessment that is modelled around the NABH accreditation guidelines and based on minimum standards classified into nine input and functional aspects like human resource, infections control measures, and medication monitoring practices. The assessment team consists of officials from the Directorate of Health Services and the SHAS. The TPA staff support the assessment team in the infrastructure audit. Only those facilities that achieve the minimum specified threshold score are empaneled and are assigned grades based on their scores. All facilities that hold a valid Quality Council of India (QCI)/NABH accreditation at the time of

Empaneled Hospitals (MJPJAY) (as of May 2018)

Total network hospitals: 492

Corporate hospitals: 414 (84%)

Public hospitals: 78 (16%)


application are exempt from assessment and are assigned the highest grade. The assessment team submits its report and recommendations to the Empanelment Committee that is responsible for the final empanelment decision. The Empanelment Committee is headed by the CEO of the SHAS. Other members of this committee are the SHAS regional managers and representatives of the insurer.

Beneficiary identification at the point of service is done through one of the listed identification documents and the ration card issued by the Civil Supplies Department. The SHAS has detailed guidelines that list different scenarios and action points to aid network hospital Arogyamitras in determining the validity of the identity documents and eligibility of the beneficiary. Beneficiaries from the 14 agriculturally distressed districts are required to produce special ration cards issued to them by the government. Alternately, a certificate from the concerned Talathi/Patwari, stating that the beneficiary is a farmer or a family member of the farmer, with a valid photo identification proof of the beneficiary is acceptable. There is no mechanism for online verification and validation of the beneficiary ration cards with the Civil Supplies Department database. The MJPJAY does not use biometrics for beneficiary verification and authentication.

Mandatory pre-authorization for all procedures by all providers is used for preventing and deterring fraud. The MJPJAY has developed detailed pre-authorization protocols and is piloting its integration in the automated workflow process. Minimum pre-authorization documentation requirements exist for each procedure. For 870 of the 921 procedures, pre-authorization requirements are converted into detailed procedure-wise protocols. In 2015, the SHAS constituted a special committee of specialists drawn from apex medical institutions to develop the protocols. They were piloted for 30 days before statewide rollout. In 2016, all 870 protocols were embedded in the claims management software.

These automated protocols are being piloted only in 14 empaneled hospitals. This has helped standardize pre-authorization submission requirements and reduce subjectivity in pre-authorization decisions.

Providers submit online pre-authorization requests to the TPA. This task is handled by the full-time medical coordinators (MEDCOs) designated by the provider for the MJPJAY and the network hospital Arogyamitra deputed by the TPAs. The TPA assesses the pre-authorization request and pre-authorization is issued within 12 hours. As an additional security measure, pre-authorization approvals that remain pending and are not updated by the provider within 30 days are auto-cancelled by the IT system. All pre-authorization requests are scrutinized at three levels:

Level 1: � Scrutiny is non-medical (includes verification of patient details and identity along with all other non-medical documents like pre-authorization forms, consent, and counselling). It is done by the network hospital Aarogyamitras.

Level 2: � Scrutiny is non-medical and undertaken by the executive in the TPAs.

Level 3: � Scrutiny covers medical review of the request by panel doctors/specialists who take final pre-authorization decisions.

All rejected pre-authorization cases are forwarded to a two-member Technical Committee. The committee includes the chief medical consultant of the SHAS and the chief medical officer of the TPA. If the Technical Committee is divided in its opinion on a pre-authorization case, the case is referred to the insurer for a final decision.

Claims fraud is detected and managed through online verification of claims by the TPA executives and specialist doctors. The process is less rigorous for public providers. Preliminary verification of claim documents is done by the network hospital


Arogyamitra at the time of online submission. Photo and video documentation of patients and evidences of pre and post-procedures are required to be submitted for claims processing. After submission, claims executives undertake the first level of scrutiny to check compliance with the submission requirements and verify the patient’s details. At the second level, comprehensive medical scrutiny is done by the specialists. The IT system does not have fraud triggers. In practice, public providers’ claims are processed and paid without evidences that are otherwise mandatory for private providers. For example, video documentation of laparoscopy procedure is not mandatory for a public provider if the procedure is certified by the head of the department and often handwritten reports are accepted from public providers. The review team undertakes rule-based and outlier-based analysis on a regular basis. The IT platform has a claim settlement module along with electronic clearance and a payment gateway. All repudiated claims are reviewed by the Central Claims Monitoring Committee, which is headed by the additional director, health services. Other members are the chief medical officer of the TPAs and doctors from the insurer.

The insurer makes pre-authorized case-based bundled payments to providers as one of the measures for reducing fraud because of upcoding and unnecessary billing. The tariff structure is fixed by an in-house committee. The SHAS does not undertake any costing exercise to determine tariff. At the time of re-contracting the insurer after every three years, tariff of selected procedures are reexamined in relation to the existing market rates to ensure that the prices remain competitive.

Pre- and post-claims payout audits are conducted by the TPA and the SHAS to detect fraud. Audits include patients during hospitalization and post-discharge, audits of all rejected claims, and hospital audits. This is coordinated by the medical audit unit of the SHAS and supported by the Vigilance

Department wherever required. The medical audit team comprises two doctors from the SHAS and doctors from the TPAs. The SHAS prepares a monthly audit schedule. There is no advance intimation to the providers regarding the audit schedule. Each hospital is audited every three months and adverse observations, if any, are reported to the Empanelment Committee for further action.


Additional internal control measures include a set of activities aimed at overall monitoring of the MJPJAY, where management decisions and corrective actions related to fraud prevention and detection is central to all efforts. Some of these activities are (a) internal reviews done by the CEO; (b) weekly departmental meetings; (c) video conferencing with district coordinators every two months; (d) biannual meetings of the State Monitoring Committee headed by the Principal Secretary, Health; and (e) visits by district coordinators to at least three hospitals everyday for spot inspections, meeting of inpatients, verification of hospital records, physical inspection of wards, on-bed occupancy check, and patient feedback. District coordinators submit their inspection reports daily to the field operations support services team at the state office of the SHAS that has one dedicated full-time supervisory staff for every seven district coordinators.

In addition to the above mentioned activities, all the SHAS processes and finances are subject to internal audits, annual statutory audits, and audits by the Comptroller and Auditor General of India. The Finance Department of the state government has deputed one full-time person in the finance unit of the SHAS for oversight of the use of public resources.

Social Audit

The MJPJAY has a complaints and grievance redressal system. A letter from the Chief Minister’s office


is dispatched to the residence of each discharged patient and includes a self-addressed and postage-paid letter which is used by the patients to provide feedback. There is almost 50 percent response rate. The SHAS analyzes all the patients’ responses and takes appropriate corrective measures to redress grievances. A 24-hour call center is also available for the patients to lodge their complaints. All the discharged patients receive phone calls from the call center seeking feedback on the quality of services received and problems encountered, if any. Patients can also complain through a GPS-based mobile application. The PHC Aarogyamitras further strengthen the SHAS’s social audit process. They are responsible for patient follow-ups post discharge and support in creating demand and ensuring referrals.

Conclusion

The MJPJAY has adopted a range of anti-fraud measures, but there is scope for further strengthening. Whereas the governance structure, district-level oversight, clinical protocols for pre-authorizations, and Chief Minister’s letter seeking feedback from discharged patients are fraud prevention and detection practices that other states could consider adapting, the anti-fraud architecture of the MJPJAY may be further strengthened with the following: (a) documented anti-fraud policy and guidelines, (b) mechanisms for verification of beneficiaries through access to online database of the Civil Supplies Department, and (c) an upgraded IT platform with inbuilt fraud triggers and advanced algorithms for fraud detection.


Annex 4: Case Study: Chief Minister’s Comprehensive Health Insurance Scheme, Tamil Nadu

Introduction

Tamil Nadu is one of the five southern states in India hosting about 6 percent of country’s population.17 It is one of the most economically developed states in the country. Its TGHE is 5 percent of the total state expenditure and 0.7 percent of the GSDP resulting in a per capita TGHE of INR1,162 (US$18) in 2014–2015.18

In 2012, the Government of Tamil Nadu introduced the CMCHIS. By 2017–2018, the CMCHIS had a budget outlay of INR 13,480 million (US$204 million), approximately 13 percent of the budget outlay of the Health Department.

The Scheme

The CMCHIS is administered by the Government of Tamil Nadu, which targets poor families residing in the state with annual household income of up to INR 72,000 (US$1,091). In addition, the CMCHIS covers all refugees from Sri Lanka in the camps and differently-abled persons in the state. There are no limits on the number of family members in each eligible family. The benefits package comprises a positive list of explicitly defined packages that

17 Census 2011, Government of India.18 National Health Profile 2017. Ministry of Health and Family Welfare,

Government of India.

include 1,027 medical and surgical procedures across 40 disease specialties and 38 stand-alone diagnostic procedures. Of these 1,027 procedures, 154 are designated for post-discharge follow-up. Eight high-end tertiary-level procedures—renal, liver, lung, heart, bone marrow/stem cell transplants, and cochlear and auditory brain stem implantation—are also covered. The CMCHIS provides a risk cover of INR 100,000 (US$1,538) per family per year on a family floater basis, with an additional INR 100,000 (US$1,538) per year for the 154 specifically listed procedures. For the

CMCHIS (January 2011 to May 2018)


(80 percent of the total 19.6 million families in the state)

No. of claims processed: 2.35 million z

Claims amount disbursed: INR 45,080 million z

(US$683 million)

In 2017–2018

No. of claims processed: 480,386 z

Total claims outgo: INR 8,770 million z

(US$133 million)

CMCHIS budget outlay: INR 13,480 million z

(US$204 million)


eight high-end tertiary procedures, once the available sum insured is exhausted, the government directly reimburses up to INR 3.5 million (US$53,864) to the empaneled providers. For this purpose, the Tamil Nadu government has a dedicated corpus fund. A government order stipulates that 27 percent of the claims receipts by all empaneled public providers shall be deposited into this corpus fund.

The risk under the CMCHIS is covered by United India Insurance, a public insurance company (the ‘insurer’), which was selected through a bidding process. Bids are restricted to public sector insurance companies only. The insurer subcontracted three private sector TPAs19 to handle the operations in clustered districts. The annual premium is determined through the bidding process and is currently INR 699 (US$11) per year per beneficiary family unit plus applicable taxes.


The primary responsibility of the implementation oversight, including fraud prevention, detection, and follow-up is that of the TNHSP. The TNHSP is a registered society set up in 2005 by the Government of Tamil Nadu responsible for managing and implementing the CMCHIS among a number of other schemes/projects of the Department of Health and Family Welfare (DoHFW). The TNHSP has an executive body called the State Empowered Committee, chaired by the Chief Secretary to the state government, and includes 12 members from various state government departments, including DoHFW. The executive head of the TNHSP is the project director, an officer from the Indian Administrative Services, who provides policy guidance, leadership, and oversight on the management of the CMCHIS. This person is responsible for coordination with the

19 Vidal Health Insurance TPA Pvt Ltd, MDIndia Healthcare Services (TPA) Pvt. Ltd., and Medi Assist India TPA Pvt Ltd.

DoHFW on all policy matters, including financing of the CMCHIS. The existing accountability structures within the DoHFW for all departmental activities include the management and operations of the CMCHIS. For the organogram, refer to Exhibit 3: Organogram - Scheme-administering

Human Resources (CMCHIS)

TNHSP staff dedicated for the Tamil Nadu-CMCHIS: 14 staff

Additional director: 1 z

District revenue officer: 1 z

Deputy directors: 2 z

Medical officers: 10 z

Project office at the state level: 255 staff (excluding support staff)

Doctors: 98 z

Dedicated vigilance staff: 7 z

Claims validators (non-medical): 78 z

Operations and other staff: 72 z

Medical audit team at the state level (17 staff)

2 doctors from each of the three TPAs z

1 doctor from the insurer z

10 doctors from the TNHSP (indicated earlier) z

District staff (recruited by the TPAs): 976

District project officers: 33 z

District coordinators: 44 z

District medical audit doctors: 32 z

District vigilance officers: 29 z

Insurance coordinators deputed by the TPAs in z

empaneled providers: 816

Kiosk operators: 18 z

Others: 4 z

Call center staff: 32

Empaneled Provider

One full-time MEDCO (employed by each z

empaneled provider)


Agency (TNHSP), Tamil Nadu. The operational head of the CMCHIS is an officer at the rank of an additional director on deputation from the DoHFW. At the state level, the TNHSP has approximately 14 staff engaged in the CMCHIS, with additional support staff. Most of these staff are medical doctors because the medical review and fraud oversight functions are directly handled by the TNHSP. Medical Specialists are sourced from government medical colleges for expert opinion and participation in various committees. The district vigilance officers, appointed by the TPAs, are retired officials from the state police services. All insurer and TPA staff are full-time, with job descriptions and designated reporting authorities.


The CMCHIS does not have a fraud management policy or plan. Intensive human resource efforts, basic but fairly strong technology infrastructure, and proactive leadership and management are reportedly adequate and have been successful in limiting the cases of fraud. The TNHSP leadership ensures ongoing need-based policy interventions. For example, package utilization volumes and trends are constantly monitored for potential abuse and fraud. Based on such reviews, policy decisions related to reserving frequently-abused packages like hearing aids, hysterectomy, and revision joint replacements (158 packages as of May 2017) only for government providers have been taken. In addition, the 38 stand-alone diagnostic procedures can be undertaken only on referrals from government hospitals.

The CMCHIS has a vigilance unit within the TNSHP. The unit coordinates with the vigilance teams, the insurer, and the TPAs and works in close coordination with the medical audit team. The fraud prevention, detection, and management functions are integrated within all the processes under the CMCHIS. Fraud prevention, detection, and management are an

Empaneled Providers (CMCHIS) (as of May 2018)

Total providers: 881 hospitals

Public providers: 25% (224)

Diagnostic centers: 200+

(for stand-alone diagnostic procedures)

integral part of the job descriptions of all key personnel at all levels across the TNHSP, insurer, and TPAs. District teams deployed by the TPAs, including district vigilance officers, district medical officers, and managers handle all fraud management-related functions under the guidance and leadership of the state team.

Sanctions for fraud include civil and criminal actions, financial penalties, suspension, de-empanelment, and delisting. There are no insurance-specific state legislations. All contracts/agreements between parties have non-legal (for example, disciplinary actions, financial penalties, suspension, de-empanelment) and legal (for example, civil and criminal) provisions to act against fraud, though until now only non-legal provisions have been enforced. However, there is no direct agreement between the empaneled public providers and the insurer, thereby restricting the insurer from any direct action against public providers and limiting such action to only empaneled private providers. All cases demanding any action against the public providers are routed through the TNHSP and are limited to advisories for corrective actions with copies to the Health Directorate.


Fraud during beneficiary enrollment is addressed through triangulation of beneficiary records, including photographs with the existing database of the Food and Civil Supplies Department. Verification


of beneficiaries is a three-step process. At the time of enrollment, the beneficiary details are verified against the BPL database of the state government. Verification activities include checking the name and photograph from the database of the Food and Civil Supplies Department and income proof from the village administrative officer. Refugees from Sri Lanka and the families of differently-abled persons and other eligible beneficiaries are enrolled based on similar verifications in the state database and certifications from concerned government departments. Once verified, the TPAs enroll beneficiaries into the CMCHIS. With high population coverage of the CMCHIS, enrollment fraud is not a challenge. The CMCHIS targets almost 80 percent (15.7 million) of the total families (19.2 million) residing in the state, all of which are already enrolled under the scheme.

Empanelment fraud is deterred through online application, followed by an on-site assessment of infrastructure, equipment, and human resources. All empanelment-related decisions and information are available in the public domain. All the private providers go through a mandatory empanelment process, including on-site physical assessment, but government providers are automatically empaneled. It is mandatory for all empaneled private providers to possess at least entry-level accreditation from the NABH. Service agreements are signed only between the private providers and the insurer. A team of doctors from the TNHSP and the TPA, including a representative from the insurer assess all private providers based on detailed assessment checklist that is available on the CMCHIS website (https://www.cmchistn.com).

All empanelment decisions are taken by the Empanelment and Disciplinary Committee (EDC) set up by the TNHSP. The EDC is also responsible for coordinating all provider-related fraud detection processes and follow-up actions. Detailed assessment score sheets are publicly available for each empaneled private hospital. There have been instances where

open access to this information has led to complaints to the TNHSP about particular hospitals falsifying records to claim possessing certain facilities. The TNHSP has taken actions in response to such complaints and there have been instances where such empaneled hospitals were downgraded. This is in contrast to the relatively lenient approach toward managing empaneled public providers, with no entry requirements and automatic assignment of second highest grade.

Beneficiary identification mechanisms with designated government identification documents and Aadhar seeding of beneficiaries allow for biometric identification and verification and prevent fraud through fake beneficiaries. Each empaneled provider has a full-time insurance coordinator who handles an exclusive patient desk for the CMCHIS beneficiaries. When a beneficiary reports to an empaneled provider, the insurance coordinator verifies the identity of the beneficiary: (a) the beneficiary produces her/his smart card, issued under the CMCHIS, and ration card as a supporting document; (b) the insurance coordinator uses the identification number on the smart card to verify the beneficiary from the CMCHIS database where the beneficiary’s photographs are available along with details of each family member; and (c) only if there is no mismatch during this verification is the beneficiary’s photograph and biometric thumb impression taken by the insurance coordinator and the patient is registered for treatment in the hospital under the scheme. However, one limitation is that the insurance coordinators are available only during the day shift and not round-the-clock.

Mandatory pre-authorization for all procedures is used for preventing and deterring fraud. After beneficiary registration, both the public and private providers submit online pre-authorization requests along with supporting documents and investigation reports that are listed as minimum requirement for pre-authorization of each procedure. All pre-


authorization requests are verified by the TPAs who undertake verification of beneficiary identity along other non-medical verifications (for example, name, age, identity details) followed by medical verification of the request. Subject to queries, if required, and sum insured available, pre-authorization requests are approved within 24 hours for non-emergency cases. For emergency cases empaneled providers may seek pre-authorization over telephone. This is followed by the routine pre-authorization request and approval.

Claims fraud is prevented and managed through a three-step documented process for verification and processing of claims. TPAs are responsible for all claims processing and management for their assigned districts. Providers submit claims online based on a predefined list of minimum documentation and evidences required, including photo documentation. TPAs have designated claims validators, claims processors, and claims approvers with defined responsibilities. They are supported by 35 fraud triggers that the IT system activates. However, there is no automated detection of morphed photographs and no advanced algorithms for fraud detection. Some of the parameters used to manually rule out inconsistencies, morphing, and falsification in records are (a) completeness of required documentation; (b) consistency in clinical history of the patient during hospitalization and the line of treatment; and (c) critical examination of investigations reports, radiology images, and patient photographs. The fraud detection process appears to be less rigorous for empaneled public providers, with no legal provision for actions against them.

If inconsistencies are detected, the claims management team of the TPAs initiate queries against the concerned providers. Based on responses from providers, in consultation with the claims head, final decisions are made. Penalties may include partial or full rejection of the claim amount. All cases related to denial of claims are monitored by the TNHSP. As

and when required, cases are escalated to the TNHSP team and the Morbidity and Mortality Committee of the TNHSP. District vigilance officers initiate fraud investigations under the directions of the state team and the EDC.

There are no STGs for verifying the line of treatment during the claims review process. However, the Mortality and Morbidity Committee of the TNHSP conducts a monthly clinical review of all death cases and other randomly selected cases to assess the line of treatment appropriate to diagnosis, efficacy of prescriptions, and clinical progress of the patient. Regarding fraud control during claims processing, the TNHSP is more cautious for medical procedure claims as they are more prone to fraud than surgical procedures. The TNHSP has recently initiated documenting the claims management process and the process of detecting fraud.

The insurer makes case-based bundled payments to providers, thereby preventing any fraud because of upcoding and unnecessary billing. Reimbursements are based on predefined package rates for pre-authorized procedures. The tariff structure is fixed by an in-house committee based on local market trends and review of package prices for national schemes such as the CGHS. There is no fixed periodicity of revising prices; however, this is reviewed at the time of issuing the bid documents for hiring insurers.

Pre- and post-claims reimbursement audits are conducted to detect fraud. These include pre-authorization audits, at least 5 percent of claims audit, post-discharge beneficiary audits, 100 percent death audits, and hospital audits (each hospital is audited at least one in a year).

Internal Control Processes that Lead to Fraud Prevention, Detection, and Management

Internal control mechanisms revolve around segregation of responsibilities, multi-level system


of verification and audits, and patient feedback mechanism. Transparency in all information and reports related to hospital assessments, detailed assessment reports, and empanelment decisions, publicly available on the TNHSP website, significantly contribute toward preventing and detecting empanelment-related fraud.

In addition to the processes described earlier, the TNHSP has institutionalized several internal control measures to prevent and detect fraud. These include: (a) weekly review meetings between the insurer, TPAs, and the TNHSP; (b) weekly analysis of granular data by district and by provider for outlier- and rule-based deviations aided by automated dashboards; (c) a proactive EDC that provides oversight on the providers even after empanelment; (d) zone-wise and region-wise review meetings; (e) open door walk-in meetings managed by senior TNHSP officials on fixed days and time each week where anybody can walk in without any prior appointment for redressing their grievances and complaints; (f) a WhatsApp group messaging system for information sharing, alerts, and actions with a mutually agreed turnaround time for response (6 hours) between the insurers, TPAs, and TNHSP; (g) statutory annual audits by the insurer; and (h) audits by the central apex audit institution of the Government of India (Comptroller and Auditor General of India).

A range of frauds are detected under the CMCHIS. These include manipulation of patient records, that is, investigation reports, morphing of photographs, and ghost reports. Instances of suspected fraud are also seen among public providers, though reportedly the discrepancies in public provider records are primarily due to lack of capacity and time.

Regular on-site verifications are central to fraud detection practices. On-site verifications are mostly done by the district teams. The scope of verification includes, among others, enquiries with patients, investigation done, treatment provided, triangulating case sheets with documents submitted online, verifying surgical scars, post-operative investigations,

and lab registers. Insurance coordinators, directly recruited by the TPAs, are embedded within each empaneled provider as the focal point of contact for all beneficiaries and also for continuous on-site monitoring of the entire process cycle from beneficiary admission to discharge. The insurance coordinators are rotated between providers every three to four months to prevent any collusion with the providers. Periodic home visits are also conducted. The vigilance mobile app is used, which allows for geo-tagging of hospitals and beneficiary homes during audits.

Patient feedback mechanisms feed into fraud detection efforts. Patient satisfaction sheets post discharge, beneficiary calls to a 24x7 call center dedicated for the CMCHIS, and outgoing calls from the call center to discharged patients (on a sample basis) to determine overall experience of the beneficiaries are some of the means that feed into the fraud detection process. Almost 2,500 outbound calls are made per month from the call center which include quality check and verification calls to beneficiaries. Based on such triggers, the district-level vigilance officers visit the homes of the discharged beneficiaries for audit and based on the complaint, launch an investigation into the hospital in question.

Conclusion

The CMCHIS appears to have robust fraud prevention, detection, and management processes. These are built around strong leadership and governance, vigilant monitoring mechanism, and a basic but quite robust technology infrastructure implemented by a highly committed team of the insurer and the TPAs that work in very close coordination with the TNHSP. However, some of the areas that the TNHSP may explore strengthening are developing explicit fraud management policy and guidelines, ensuring presence of insurance coordinators round-the-clock in the empaneled providers, conducting pre-empanelment assessment of public providers (at least for tertiary-level procedures), and augmenting capacity for data mining and high-end data analytics.


Introduction

Telangana is a new state carved out of the erstwhile state of Andhra Pradesh in 2014, with a population of 35 million.20 In 2015–2016, its per capita GSDP per capita was INR 162,168 (US$2,495). The GSDP grew at 10 percent in 2017–2018, contributing to 4.2 percent of the all-India GDP.21 Since its formation, the Telangana government has significantly increased its expenditure on health. Its per capita health expenditure increased from INR 708 (US$11) in 2014–2015 to INR 1,492 (US$23) in 2017–2018. The Government of Telangana provides financial protection to the poor through the Aarogyasri Scheme, a health insurance program launched in 2007 in the erstwhile Andhra Pradesh, and after reorganization, the state of Telangana continued with the scheme under the same name.

The Scheme

The Aarogyasri Scheme provides inpatient secondary - and tertiary-level medical and surgical treatment to BPL households. There are no limits on the number of family members in each eligible

20 http://ecostat.telangana.gov.in/telangana/Home.21 Directorate of Economics and Statistics, Government of Telangana.

http://ecostat.telangana.gov.in/PDF/PUBLICATIONS/GSDP_Estimates_2017-18.pdf.

Annex 5: Case Study: Aarogyasri Scheme, Telangana

family. The benefits package comprises a positive list of explicitly defined packages that include 949 procedures/surgeries covering 19 surgical and 14 medical specialties. About 83 percent of the packages are surgical procedures. In addition, there are 75 surgical follow-up packages and 50 medical follow-up packages. The scheme provides a risk cover of INR 150,000 (US$2,272) per family per year on a family

The Aarogyasri Scheme(Cumulative from April 2007 to

September 2016)


Population coverage: 93 percent z

(approximately)

No. of pre-authorizations: 2.46 million z

Amount pre-authorized: INR 66,068 million z

(US$1,001 million)

In 2016–2017:

No. of pre-authorizations approved: 275,303 z

Total amount approved: INR 7,100 million z

(US$108 million), which is approximately 15 percent of the Health Department’s budget (revised estimates) for that year

Spending per beneficiary (excludes scheme z

administration cost): INR 920 (US$14)


floater basis, with an additional buffer provision of INR 50,000 (US$758) per year per family. Under rare circumstances, the available sum assured in a particular year is carried forward to the next year to allow access to increased sum assured, in case of rare emergencies. This requires approval of the CEO of the scheme-administering agency. The scheme also pays the costs for cochlear implant surgery with auditory verbal therapy up to a maximum of INR 650,000 (US$9,848) per case.

The scheme is administered by an independent agency set up by the Telangana government. This entity is called Aarogyasri Health Care Trust (the ‘Trust’ or the ‘AHCT’), with operational support from an external agency MD India (ISA) and a technology partner, Tata Consultancy Services, which handles the IT platform and the software. In addition to the Aarogyasri Scheme, the Trust also manages a health insurance scheme for state government journalists (that is, Working Journalists Health Scheme) and the Telangana Employees Health Scheme for all state government employees, pensioners, and their dependent family members.


The AHCT is responsible for the overall management and implementation of the scheme, including fraud prevention, detection, and management. It has a 12-member Board of Trustees headed by a chairman (Chief Minister) with two vice chairmen (Health Minister and Principal Secretary, Health). The other members of the board are Principal Secretaries from the Departments of Finance and Rural Development, directors within the Health and Medical Education Department, the director of Nizam Institute of Medical Sciences, a financial adviser nominated by the government, and the CEO of the Trust. The CEO of the Trust, who provides policy guidance, leadership, and oversight on the management of the scheme, is an officer from the Indian Administrative Services.

Human Resources (Aarogyasri Scheme)CEO: 1 (not full time) z

AHCT staff: 72 z

TPA staff: 63 z

Call center staff (managed by the TPA): 82 z

Field operations: 1,255 (including 464 network z

Aarogyamitras, 612 PHC mitras, and 62 team leaders)

One Aarogyasri MEDCO in each empaneled z

hospital

The Trust has 12 departments/units: planning and coordination, EDC, operations unit, grievance, monitoring unit, audit and vigilance unit, finance and human resources, among others. At the district level, there are MEDCOs, but no full-time vigilance officers.

All Trust staff are full-time employees with defined job descriptions and designated reporting authorities. At the district level, the Trust directly recruits a district coordinator. All positions under the district coordinator, that is, the district manager, team leader, and the full-time Aarogyamitras deployed by the Trust in each PHC, called the PHC Aarogyamitra, are appointed through outsourced human resource recruitment and payroll management agencies who are independently hired by each district administration through a bidding process. Aarogyamitras in each empaneled hospital are called network hospital Aarogyamitras and are appointed by the ISA. For the organogram, refer to Exhibit 4: State-level Organogram - AHCT, Telangana for the state-level organogram and Exhibit 5: District-level Organogram - AHCT, Telangana for the district-level organogram.


The Aarogyasri Scheme does not have an explicit fraud management policy or plan. However, there are detailed guidelines for pre-authorization, claims


processing, and other important aspects of the scheme are available that guide all fraud prevention and detection practices within the Trust. A good example of policy intervention to prevent abuse and fraud is reserving 135 often abused secondary care procedures only for government providers.

Fraud prevention, detection, and management functions are spearheaded by the medical audit and the vigilance units within the AHCT and are integrated within all the processes. Fraud prevention, detection, and management is an integral part of the job descriptions of all key personnel at all levels across the Trust and the ISA. District teams deployed by the ISA handle all fraud management-related functions under the guidance and leadership of the state team. Provider contracts have reference to legal recourse for instances of fraud, though abuse and fraud is not comprehensively defined. The Trust regulates providers by monitoring compliance to the provisions of the provider contract. Though the contract does not explicitly define ‘fraud’, it lists a set of provider practices such as charging money from patients, deficiency of service, engaging middlemen, denial of service, mobilizing patients by fraudulent means, and common fraudulent practices related to pre-authorization and claims as provider malpractices that may be deemed as a breach of contract.

Sanctions for fraud include issue of show cause notice, putting of payments on hold, suspension, and de-empanelment and delisting of providers. Financial penalties levied are up to 10 times the financial value under suspected fraud. All such penalties are decided by the EDC. If any empaneled provider does not pay the penalty within a specified period, the provider is immediately delisted without any further notice and the necessary follow-up remedial measures are initiated. No case has been referred to the police for any criminal proceedings. There have been instances of proven fraud against medical personnel referred to the Medical Council

of India for appropriate action. However, all such sanctions are limited to private providers only.


Fraud during beneficiary enrollment is controlled by physical verification of the beneficiary identification document with the BPL families’ database of the Civil Supplies Department as enumerated and photographed there. The scheme-administering agency has identification documents that are considered valid for identity recognition. In addition, those holding one of the listed identity documents, case-specific authorization and referral letter from the Chief Minister’s office, are also deemed as eligible for receiving services under the scheme, where services need to be availed within 10 days from the issue of the letter. Approximately 5 percent of the total beneficiaries have accessed services through referral letters from the Chief Minister’s office. Enrollment fraud is not a major challenge because the Aarogyasri Scheme is almost universal and covers nearly 93 percent coverage of total families (7.72 million families enrolled of total 8.3 million22 families in the state).

Empanelment fraud is deterred through online application, followed by assessment of the private providers. However, all public providers with minimum 50 beds are automatically empaneled. Almost 30 percent of the total claims are handled by the public providers. All interested private providers who are registered with the Andhra Pradesh Allopathic Private Medical Care Establishment Act and the corresponding act of Telangana can apply for empanelment. The application process is online. The Trust has laid down minimum empanelment criteria based on which on-site assessment is done by the EDC. Photographs of physical infrastructure in each department are taken during the inspection. The EDC takes all empanelment decisions.

22 http://www.telangana.gov.in/about/state-profile.


Beneficiary identification at the point of service is done through verification from the Civil Supplies Department database using the identification number on the government-issued photo identification documents. At the point of care, the beneficiary has to show any one of the 17-listed government photo identification cards. The network Aarogyamitras (insurance coordinator employed and deputed by the Trust) undertakes the verification. The civil supplies database has the family photographs which are used to verify the identity of the beneficiary. The patient’s biometrics are captured at the time of registration and validated at the time of discharge, to ensure that the patient who was registered received the services.

Mandatory pre-authorization for most procedures is used for preventing and deterring fraud. The selected providers are exempted from pre-authorization of a package up to an amount of INR 50,000 (US$758) for non-critical procedures and INR 100,000 (US$1,515) for critical procedures. All pre-authorization requests go through four levels of scrutiny, which include non-medical and medical review and verification. Final pre-authorization decisions are taken by doctors who are full-time employees of the Trust.

Level 1: � Scrutiny is non-medical (includes verification of patient details and identity along with all other non-medical documents like pre-authorization forms, consent, and counselling) done by the network hospital Aarogyamitra.

Level 2: � Scrutiny is again non-medical and undertaken by the executive in the ISA.

Level 3: � Scrutiny covers medical review of the request by panel doctors/specialists (this is a team of 50 specialists empaneled by the ISA).

Level 4 � : A Trust doctor (this is a team of 12 full-time doctors employed by the Trust) undertakes a complete review of the non-medical and medical screening done at the first and the second levels and takes final decisions related to approval or rejection of request.

The pre-authorization process is less rigorous for public providers, who have the flexibility to proceed with treatment even without pre-authorization approvals. Providers submit online pre-authorization request to the ISA. This task is coordinated by MEDCOs designated by the provider for the scheme. The ISA assesses the pre-authorization request and, subject to compliance with all documentary requirements and available sum assured, pre-authorization is issued within 12 hours. There are two additional security measures: (a) pre-authorization approvals that remain pending and are not updated by the provider within 30 days are auto-cancelled by the IT system and (b) once pre-authorization is issued for a procedure, the IT system does not allow the same patient’s registration for the same procedure in any private hospital. Through this process, the Trust exercises full control on all the pre-authorization requests to prevent any fraud. Further, to prevent frauds related to high value claims, a single pre-authorization request above INR 150,000 (US$2,273) can be approved only by the CEO of the Trust.

Claims fraud is prevented and managed through four levels of scrutiny that include rigorous non-medical and medical verification of claims by the ISA. Since post-discharge follow-up is a part of the package, providers raise claims after 10 days of discharge. All claims are scrutinized at four levels before release of payment: (a) scrutiny by Claims Executive for verification of attachments as per the protocol, (b) scrutiny of all the relevant medical

Empaneled Hospitals (Aarogyasri Scheme)(as of May 2018)

Total network hospitals: 327

Corporate hospitals: 232 (71%)

Public hospitals: 95 (29%)


documents by specialists who are empaneled doctors, (c) scrutiny by doctors who are employed full time by the Trust, and (d) final scrutiny done by the Claim Head of the ISA. Claims for special cases above INR 200,000 (US$3,030) for which the pre-authorization is issued by the CEO is approved as per the following: (a) all claims above INR 200,000 (US$3,030) and up to INR 10,00,000 (US$15,152) are approved by a separate committee headed by an executive officer of the Trust and (b) all claims above INR 10,00,000 (US$15,152) are approved only by the CEO of the Trust. The existing IT platform has limited outlier- and rule-based fraud triggers.

The scheme does not apply any STGs for procedures. The only exception is for hemodialysis which includes treatment guidelines, injection administration guidelines, and clinical and non-clinical “dos and don’ts” for the network hospitals. Photo and video documentation of beneficiaries and evidence of pre- and post-procedures must be submitted for claims processing.

The insurer makes pre-authorized case-based bundled payments to providers as one of the measures for reducing fraud because of upcoding and unnecessary billing. The tariff structure is fixed by an in-house committee based on medical coded inputs and unit prices from a standard schedule of rates developed by the Trust. An online module is used for calculating tariffs. The tariff is rationalized to include the cost of investigations for those cases that do not lead to hospitalization by using outpatient-inpatient conversion ratio. Reimbursements are based on predefined package rates. Payments to providers are supposed to be made within seven days of claims submission, provided there are no queries on the claims documents submitted. However, there appear to be delays between three and eight months in the release of payments.

Pre- and post-claims reimbursement audits are conducted by the ISA and the AHCT to detect

fraud. Audits are restricted only to private providers. All field staff along with selected state-level staff of the Trust and the ISA are involved in audits and other monitoring and verification processes. This is coordinated by the Vigilance Department of the Trust which is headed by a general manager. Audits include pre-authorization, claims, and 100 percent death audits. Random audits are done specialty wise and hospital wise. There is a rotation policy for network hospital Aarogyamitras to prevent collusion with providers.


There are several demand-side measures adopted to help reduce fraud. These include a structured complaints and online grievance redressal system and a patient feedback mechanism. A letter from the Chief Minister’s office is also dispatched to the residence of each discharged beneficiary enquiring about the health status and quality of services received and provides details of treatment and sum assured that has been availed. The Chief Minister’s letter includes a self-addressed and postage-paid letter which can be used by the beneficiaries to provide feedback without any out-of-pocket expenditure for mailing the feedback.

A 24-hour call center is also available for the scheme. It receives more than 7,500 calls per day, most of which are related to the Aarogyasri Scheme. These include calls related to beneficiary grievances. All the discharged beneficiaries receive phone calls from the call center seeking feedback on the quality of services received and problems encountered, if any. Beneficiaries can also complain through a GPS-based mobile app that also has details of the scheme, the benefits package, and facility to search empaneled providers in a particular area.

Lastly, PHC Aarogyamitras play an effective role not only in creating demand and ensuring referrals but also for patient follow-ups post-discharge. About 20


percent of the total beneficiaries are referred by the PHC Aarogyamitras and 45 percent attend health camps organized by the providers.

Conclusion

The Aarogyasri Scheme is one of the first such schemes in India and has refined and evolved its processes based on experience over the last 10 years. Whereas the fraud management systems

and processes within the scheme appear robust, some of the actions that could strengthen these efforts include the following: (a) explicit policy on fraud management, (b) STGs and mechanisms to monitor compliance to STGs, and (c) use of advanced techniques for data mining and analytics. In addition, there is a need for adequate resource allocation for the scheme and timely allocation of funds to the Trust.


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Exhibit 2: Organogram - SHAS, Maharashtra 51

Exhibit 2: Organogram - SHAS, Maharashtra

Chief Executive Officer

Deputy CEO

Claims

Medical/NABHAudit

Pre- Authorization

Empanelment

Chief MecicalConsultant

CharityAccounts &

Finance

AdministrativeOfficer

Admin

RTI

LAQ

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Human Resource

VigilanceInsurer & TPAsCo-ordination

Grievance Redressal & Feedback

Customer Care

Empanelement (Non-Technical)

Health Camp

Information Technology & M.I.S

Sr. Manager Operations

District Level Operations

Asst. Director of Health Services

Financial Advisor

General Manager Operations

General Manager HR

State VigilanceOfficer


Exhibit 3: Organogram - Scheme - Administering Agency (TNHSP), Tamil Nadu

Project Head

Operations Head Chief Medical Officer Chief Vigilance Officer

Chief Medical Officer

Pre-authand Claims

Empanelment

Operations Head

Operations team at PO Call Centre

Chief Vigilance Officer

Vigilance teamat PO

District VigilanceOfficers

Support Teams

Human Resources

Admin Accounts and Finance

MIS IT Support

District MedicalOfficers

Support Teams

Operations team at Field:

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Medical Auditteam at PO

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Legend:

Admin Administration

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EO Executive officer

FOSS Field operations support services

GM General manager

HR Human resource

IT Information technology

JEO Joint executive officer

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P&C Planning and coordination

PMU Project management unit

Tech Technical

Exhibit 4: State-level Organogram - AHCT, Telangana

Dy. EO(Admn & HR)

Dy. EO(NT Accts.)

Dy. EO(Tech)

Dy. EO(Non-Tech)

General Manager HR

JEO(Tech-MA)JEO

(Tech)Dy. ED(Tech)

Dy. ED(Tech)

Dy. EO(Non-Tech)

Dy. ED(Non-Tech)

JEO(Tech-P&C)

JEO(Admin & HR)

JEO(Accounts & Budget)

Executive(PMU)

Dy (NT-FOSS& Griev

NetworkAdministrator

Executive Officer(Planning & Coordination)

Executive Officer(Operations)

Executive Officer(Administration)

Chief Executive Officer

JEO(Tech-Emp)

GM (PMU)

GM (104 SK)

Dy. EO(Legal)

GM (FOSS & Grievance)

JEO(Vigilance Officer)

Dy EO (NT-IT-NW

& PMU


Exhibit 5: District-level Organogram - AHCT, Telangana

Trust State Team

District Coordinator

District Manager

Team Leader

PHC AarogyamitraNetwork Hospital

Aarogyamitra

Notes

Notes

Documents

India- Case study on institutional arrangement for ...documents.worldbank.org/curated/en/946831555477597462/pdf/India-Case-Study-on...the Mahatma Jyotiba Phule Jan Arogya Yojana (Maharashtra),