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 . November 2018 . HNP . Document of the World Bank . . © 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: pubrights@worldbank.org.        a Anti-Fraud Efforts in Government- Sponsored Health Insurance Schemes in Four Indian States Documenting practices from Gujarat, Maharashtra, Tamil Nadu and Telangana November 2018 Study Team: Sheena Chhabra Aloke Gupta Rajesh Jha Amith Bathula Nagaraj Owen 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: pubrights@worldbank.org. Design and Print: Macro Graphics Pvt. Ltd. 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    Table of Contents    iii 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 iv    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   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    Abbreviations and Acronyms    v 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 vi    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   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.    Acknowledgements    vii 1. Introduction Health systems are highly vulnerable to integrity in anti-fraud efforts is likely to yield high economic violations. The nature of health service delivery – it returns. One study estimates that investments in is mostly “discretionary” on the part of the health fraud detection technology with predictive modelling care provider, and “transaction intensive” in the features could yield annual savings of US$97 million sense that volumes are typically very large – creates in the State of Louisiana alone.3 opportunities for provider conduct that is not aligned Government-Sponsored Health Insurance Schemes with the broader public interest. The net impact of (GSHISs) in India have received a major policy integrity violations is greater than the direct financial focus with the Government of India launching the loss. The consequences may include patient harm at Ayushman Bharat - Pradhan Mantri Jan Arogya the point of care, over-prescription of diagnostics and Yojana (PM-JAY) in September 2018. The PM-JAY medications, and violations of patients’ rights to life provides an annual cover of INR 500,000 (US$7,576) and health. Health insurance fraud is one of the many per family per year for inpatient secondary and forms of integrity violations in health and a matter tertiary level care to more than 500 million poor. of grave concern for governments and the insurance Most of the people in India who have some form industry. of health insurance are covered under the GSHISs. By its very nature, fraud is difficult to measure. In 2016–2017, of the total persons having health The paucity of reliable data on this subject further insurance cover (437.5 million), 77 percent are under accentuates the concern. One survey estimates the loss one or the other GSHIS, including the Rashtriya on account of fraudulent health claims in India to be Swasthya Bima Yojana.4 around INR 6,000–INR 8,000 million (US$92–US$123 The unprecedented population coverage and scope million) per year.1 The Organisation for Economic of services in the PM-JAY is likely to pose immense Co-operation and Development (OECD) estimates challenges for fraud management. The Insurance the financial loss to fraud and error to be more than Regulatory Development Authority of India 6 percent of the total health expenditure.2 Investing 3 Parente, S. T., S. Oberlin, L. Tomai, and D.O. Randall. 2016. “The Potential Savings of using Predictive Analytics to Staunch Medicaid 1 https://www.medindia.net/patients/insurance/fraudulent-health- Fraud.” Journal of Health and Medical Economics. 2: 2. insurance-claims.htm. 4 IRDAI, Annual Report 2016–2017; IRDAI reports figures of GSHISs 2 OECD (Organisation for Economic Co-operation and Development). that are operated through insurance companies only, not those 2017. Tackling Wasteful Spending on Health. implemented via assurance mode.    Chapter 1: Introduction    1 (IRDAI) regulates the insurers and the third-party agencies (ISAs), which may or may not be TPAs. The administrators (TPAs). But the onus of regulating ISAs, which are not registered as TPAs, do not fall providers rests solely with state governments. within the ambit of the IRDAI regulations. Therefore, The implementation of the Clinical Establishment contracts become the primary tool for regulating (Registration and Regulation) Act 2010 remains relationships between different actors (for example, a challenge with only four states and all Union provider, insurer, payer) in any GSHIS landscape. Territories, except the National Capital Territory of Strengthening the regulatory environment may be Delhi, having adopted and implemented it.5 State a medium- to long-term exercise. In the short term, governments that do not go the insurance route and reengineering management processes, developing cover the risk themselves (referred to in the Indian legally sound contracts, and augmenting contract context as the ‘health assurance’ model) usually management capacity are essential for fraud opt for management and operations support from management. external agencies called the implementation support 5 http://clinicalestablishments.gov.in/cms/Home.aspx. 2    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Framework, Scope, Methods, and 2.  Data Sources Fraud in health insurance is a form of integrity landscape. Integrity violations, including fraud, violation. The ‘intent’ behind an action is what may occur in the relationship between any two distinguishes between ‘fraud’ on one hand and ‘abuse’, actors. It bears mentioning that insurance-based ‘waste’, and ‘error’ on the other. While ‘fraud’ can be systems are not unique in suffering from integrity defined as a ‘rule breaking behavior’ that is illegal and violations—they may be found in any health intentional, ‘abuse’ is a ‘rule-bending’ behavior that is financing model. India’s government health system not illegal and is without criminal intent. The entire has long suffered from high rates of provider spectrum of integrity violations that range from absenteeism, for example. Like fraud, absenteeism waste to fraud have similar effects on the efficiency represents a financial loss with potential health of any health insurance system. consequences for the population. Figure 1 presents The payer, the provider, and the patient are the a typology of fraud commonly experienced in health three primary actors in any health insurance systems. Figure 1: Typology of Fraud in the Health Sector Payer(s) E.g., Salary versus Fee-For-Service (Public or Private) Embezzlement Unjustified denial of coverage or benefits Unjustified denial Absenteeism, Wrongful claims of payments payroll fraud Obtaining unjustified Charging for coverage phantom care Using several insurance coverages to multiply cost claims Over provision, over billing Bribery for access or Informal payments Insured Tax Payers, referrals (under the table payments, gratuity) Providers of Medical Patients Goods & Services    Chapter 2: Framework, Scope, Methods, and Data Sources    3 Table 1: GSHISs Included in the Report State Schemes Launched Gujarat Mukhyamantri Amrutum (MA) Yojana and Mukhyamantri Amrutum 2012 Vatsalya (MAV) Yojana Maharashtra Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY) 2012 Tamil Nadu Chief Minister’s Comprehensive Health Insurance Scheme (CMCHIS) 2012 Telangana Aarogyasri Scheme 2007 The framework used for documenting fraud Some health financing indicators for each state are management practices revolves around three presented in Table 2. pillars of tackling fraud—prevention, detection, The methods for the documentation included the and deterrence (see figure 2). Fraud management following: is more effective in a responsive GSHIS ecosystem characterized by appropriate legal framework, ™™ Structured interviews (based on data collection vibrant institutional mechanisms, and adequate tools prepared for this purpose) with officials capacity. Aspects of the GSHIS ecosystem are also from the scheme-administering agencies at the documented in this report. state level, insurance companies, TPAs, ISAs, and empaneled public and private providers (one This report documents anti-fraud efforts in selected public and one private in each state); GSHISs in four states in India. These are shown in Table 1. They were selected on the basis that all ™™ Analysis of secondary data and content analysis four have been operational for several years, but of selected GSHIS documents like the service represent a balance between states with insurance packages, standard operating procedures, and and assurance modes. Maharashtra’s MJPJAY and service agreements; and Tamil Nadu’s CMCHIS were chosen as they are implemented through insurance mode. In both cases Figure 2: Tackling Fraud the insurer is public. Telangana’s Aarogyasri Scheme was chosen as it is one of the oldest GSHISs in Tackling Fraud India, which began in insurance mode and gradually moved to the assurance model. Gujarat’s MA Detection Yojana and MAV Yojana were chosen because they De n provide an interesting variation of the assurance te tio rre en model, whereby the scheme-administering agency n ev ce Pr is seeded within the Health Department, unlike the quasi-autonomous Aarogyasri Health Care Trust (AHCT) that administers the scheme in Telangana.6 Legal Framework Institutional Mechanisms 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 Capacity regulated under different laws. 4    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Table 2: Health Financing Indicators of Selected States: 2015–2016 Indicator Gujarat Maharashtra Tamil Nadu Telangana Total Government Health INR 74,320 million INR 120,660 million INR 85,430 million INR 46,260 million Expenditure (TGHE) (US$1.14 billion) (US$1.86 billion) (US$1.31 billion) (US$0.71 billion) TGHE as a share of total state 5.9 5.1 5.0 4.8 expenditure (%) Per capita TGHE INR 1,189 INR 1,011 INR 1,235 INR 1,322 (US$18) (US$16) (US$19) (US$20) Per capita gross state domestic INR 164,030 INR 167,607 INR 167,914 INR 162,618 product (GSDP) (US$ 2,524) (US$2,579) (US$2,583) (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 The report documents fraud management practices selected Indian states in comparison with those and should not be viewed as an assessment or in Croatia, Indonesia, the Philippines, Turkey, and evaluation of these practices. The focus of enquiry in the United States of America documented in the this study was limited to processes. It did not look at World Bank Group companion HNP Discussion outcomes. As noted, fraud by its nature is difficult to Paper.7 measure. Thus, no attempt was made to measure fraud Information and data related to the selected or assess the effectiveness of fraud control efforts. GSHISs were obtained from the respective scheme- The report is structured as follows. After a short administering agencies. Other sources included the introduction, it presents a comparative overview of Scheme websites, state budget documents, the the selected GSHISs. This is followed by some common Department of Economics and Statistics websites fraud management practices across the schemes. The of states, the National Health Profile 2018 (Central report ends with key takeaways and areas for further Bureau of Health Intelligence, Government of India), consideration. State-specific practices are presented and the IRDAI annual report. in detailed case studies annexed to the 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.    Chapter 2: Framework, Scope, Methods, and Data Sources    5 3. State-level Overview The GSHISs in Gujarat, Maharashtra, Tamil Nadu (UHC).The GSHIS coverage rate (share of total state and Telangana have broad similarities but also population) is highest (93 percent) in Telangana, important differences. They are all non-contributory, followed by Maharashtra (90 percent), Tamil Nadu relying exclusively on state revenues to fund coverage (82 percent), and Gujarat (50 percent). Three of the expansions. They represent a mix of insurance and four Indian states have higher population coverage assurance models. Maharashtra and Tamil Nadu cover than what is seen in intermediate-stage health the risk through public sector insurance companies insurance reform countries such as the Philippines (insurance mode),8 while the risk is borne directly (76 percent) and Indonesia (63 percent).9 Gujarat is by the state governments in Gujarat and Telangana a good example of an incremental approach to risk (assurance mode). Despite different implementation pooling where the scheme has undergone frequent modes and associated incentives for preventing fraud, policy changes for gradually increasing the risk pool. there are striking similarities in anti-fraud practices See Table 3 for further details. and overall administration of the schemes. Income eligibility threshold levels for enrollment The states and the schemes differ in the type of under the schemes are defined but vary significantly agencies that purchase care from the providers. across the four selected states. Unlike Maharashtra, Maharashtra, Tamil Nadu, and Telangana have set Tamil Nadu, and Telangana, policy decisions related up independent purchasing agencies (State Health to income eligibility threshold level under the scheme Assurance Society [SHAS], Tamil Nadu Health Systems in Gujarat are more inclusive and demonstrate a slow Project [TNHSP], and AHCT, respectively). The State but gradual move toward a single-payer scheme. The Nodal Cell (SNC) in Gujarat, which purchases care, is scheme has expanded its coverage quite a few times seeded within the Commissionerate of Health, Family in the last five years (see Table 4). Welfare, Medical Services, and Medical Education Schemes in all four states have explicit benefit Department of the state government. packages. This is similar to the practices in the The selected schemes contribute toward the United States of America and most other OECD coverage dimensions of universal health coverage 9 Lagomarsino, G, A. Garabrant, A. Adyas, R. Muga, and N. Otoo. 8 Public sector insurance companies refer to insurance companies 2012. “Moving Towards Universal Health Coverage: Health Insurance operating in India that are either fully owned by the government or Reforms in Nine Developing Countries in Africa and Asia.” The Lancet the government has a majority shareholding in the company. 380 (9845): 933–943.    Chapter 3: State-level Overview     7 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 Level Package Enrolleda (only inpatient) MA and MAV People below poverty 6.2 million Tertiary 698 surgical INR 300,000 (US$4,615) + Yojana line (BPL) + other (50%) packages INR 200,000 (US$3,077) (Gujarat) categoriesb for transplants MJPJAY BPL + other 22.3 Secondary 971 surgical and INR 150,000 (US$2,308); (Maharashtra) categoriesb million and medical packages INR 250,000 (US$3,846) (90%) tertiary for renal transplants CMCHIS BPL + other 15.72 Secondary 1,027 surgical INR 100,000 (US$1,538) (Tamil Nadu) categoriesb million and and medical + up to INR 4.5 million (82%) tertiary packages (US$69,231) for 8 high- end procedures Aarogyasri Scheme BPL + other 7.72 Secondary 949 surgical and INR 200,000 (US$3,077) (Telangana) categoriesb million and medical packages (93%) tertiary 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 Families with annual income ≤ INR 300,000 (US$4,615) (Gujarat) 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 8    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Table 5: Public and Private Provider Details Scheme Empaneled Provider details (as of June 2018) Average Number of Providers per Total Public Private Share of District 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 countries. In contrast, the insurance schemes in cover is limited to INR 40,000), most OECD countries Croatia, Indonesia, and the Philippines do not have implement some form of explicit beneficiary co- explicit package lists; instead they have exclusion lists payments. and everything apart from the packages featuring The schemes vary significantly in how the package in the negative list is included. The packages in rates are determined. In all state schemes the the selected GSHISs in the Indian states comprise reimbursement rates for public and private providers secondary and tertiary level inpatient medical and are the same. In Gujarat the scheme-administering surgical procedures, except Gujarat where only agency finalizes tariffs by rationalizing the lowest surgical packages are covered as a fraud prevention price bid for each procedure with prevalent market measure, reportedly because medical packages are rates. Maharashtra, Tamil Nadu, and Telangana more prone to fraud. have in-house committees to determine procedure All four Indian states contract public and private package rates.10 Whereas Telangana uses an online providers, but the majority are private. Of the four pricing module and medically coded inputs for costing states, the MA Yojana and MAV Yojana schemes in procedures, Maharashtra and Tamil Nadu benchmark Gujarat have the highest share of private providers their rates against market prices and tariff under and Telangana the least (see Table 5). This trend the Central Government Health Scheme (CGHS). is similar to the Philippines (60 percent private In contrast, most OECD countries regulate package providers). In Croatia and Indonesia, the majority of rates based on costing studies and actuarial analysis the providers are public. with adjustments made for historical expenditure Empaneled providers in selected Indian states and allocation trends. Costing studies and actuarial receive case-based bundled payments, in addition to analysis, which are good fraud prevention measures, supply-side budget allocations to public providers. are more important for states following the assurance This practice is also found in most OECD countries, mode and directly covering the risk. In all four Indian although unlike India the European systems have states, the claims outgo is between 9 percent and 15 well-established Diagnostic Related Group (DRG) percent of the TGHE (see Table 6). Adequate and systems. However, there is a significant difference on timely allocation of resources is important. beneficiary co-payment policies. Whereas in the four 10 The SNC calls for bids for each identified procedure. The lowest bid for Indian states there are no beneficiary co-payments each procedure is compared with the average market rates to prevent (except for joint replacements in Gujarat where the underbidding.    Chapter 3: State-level Overview     9 Table 6: Financial Overview of the Selected GSHISs: 2017–2018 Aspects of the Scheme MA and MAV Yojana MJPJAY CMCHIS AHS (Gujarat) (Maharashtra) (Tamil Nadu) (Telangana) Spending per beneficiary family INR 1,113 INR 690 INR 699 INR 920b per yeara (US$17) (US$11) (US$11) (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 INR 10,089 INR 8,770 INR 7,100c (US$105) (US$155) (US$133) (US$108) Average claims size INR 14,782 INR 21,416 INR 18,256 INR 25,790 (US$227) (US$329) (US$281) (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. 10    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Some Common Anti-Fraud 4.  Elements Across States All the public agencies administering the schemes coordination with the in-patients. This is important have strong governance structures. Their executive for preventing beneficiary fraud. Aarogyamitras are bodies are chaired by senior officials from the usually appointed by the TPAs/ISAs and, therefore, state government and have adequate political there is no conflict of interest. This approach is not oversight. Whereas the executive bodies of the observed in any of the global cases documented. scheme-administering agencies in Maharashtra and Although overall responsibility for fraud Telangana are chaired by the State Chief Ministers, management lies with the scheme-administering in Tamil Nadu and Gujarat the agencies are headed agencies, the primary task of fraud detection is by the Chief Secretary to the state government and outsourced to either the insurer and TPAs (in the Principal Secretary of the Health Department, Maharashtra and Tamil Nadu) or to the ISAs (in respectively. Gujarat and Telangana). In contrast, the anti-fraud All scheme-administering agencies have anti-fraud efforts were not outsourced to any external agency units with dedicated staff. The number of dedicated in the global cases. It is pertinent to note that the full-time staff for fraud management is highest in TPAs or ISAs have limited incentives to invest in Maharashtra followed by Tamil Nadu (see Table 7). anti-fraud efforts as they are mostly contracted These anti-fraud staff numbers are in sharp contrast on the basis of a fixed-fee per claim in a business to the dedicated full-time staff in other countries model characterized by low costs and small margins. that vary between approximately 50 in Croatia Moreover, the short-term nature of outsourcing to (out of 2,000 full-time staff) to approximately insurers and TPAs – contract duration is typically 1 300 in Indonesia (out of 7,000 full-time staff). to 3 years – may deter major investments in anti- Almost all OECD countries have counter-fraud units fraud capacity. While most countries have plans to or organizations that are associated with social improve the capacity of anti-fraud units, in selected health insurance agencies that administer public Indian states the approach to skills development funds. Schemes in all four states rely heavily on remains need-based and ad hoc. There is an absence Aarogyamitras (insurance coordinators deputed by of a skills development strategy and plan. the TPA/ISA) for fraud management. Aarogyamitras None of the schemes in the selected states have play a critical role in beneficiary verification and anti-fraud policies and guidelines. Although    Chapter 4: Some Common Anti-fraud Elements Across States    11 Table 7: Anti-Fraud Responsibility and Staffing in Selected GSHIS Scheme Administering Full-time Dedicated Dedicated Anti-fraud efforts agency staff anti-fraud anti-fraud outsourced unit staff MA and MAV Yojana Health ~460 No ~5 Partly - to the ISA (Gujarat) Commissionerate MJPJAY SHAS ~1,763 Yes ~50 Partly - to the insurer (Maharashtra) and the TPAs CMCHIS TNHSP ~1,277 Yes ~36 Partly - to the insurer (Tamil Nadu) and the TPAs Aarogyasri Scheme AHCT ~1,473 Yes 1 Partly - to the ISA (Telangana) operating procedures for enrollment, empanelment, Stakeholder (insurer, TPA, ISA, provider) contracts pre-authorization, and claims processing refer to in Maharashtra and Tamil Nadu have references to processes that are aimed at preventing fraud, the civil and criminal recourse for fraud, but neither state scheme-administering agencies in all four states has initiated any legal action against fraud. Gujarat have taken need-based policy measures to prevent is the only state that has filed criminal complaints to fraud. the police, despite the provider agreement not having any such provision as criminal action can be initiated Benefit package design policy elements aimed at even without the contract having a provision for it. preventing fraud include reserving frequently- None of the selected Indian states have a regulatory abused secondary-level packages for public framework or laws specific to health insurance nor is providers only. One out of every seven most there any central law to specifically address insurance frequently-abused secondary care procedures fraud. Instead, the health insurance industry in India (like hearing aids, hysterectomy) in all states are relies primarily on the Indian Contract Act 1972 reserved for public providers only. As an anti- and few other provisions of the Indian Penal Code fraud measure, Gujarat has excluded medical for dealing with fraud. The Insurance Regulatory management procedures from the benefits package and Development Authority (Health Insurance) as they are more prone to fraud. Costing studies Regulations, 2016 does not define health insurance and tariff-related policy decisions can be a fraud fraud nor does it prescribe any civil or criminal prevention measure. The scheme-administering liabilities for fraud. Unlike the Indian states, Croatia, agency in Gujarat increased the package rates by Indonesia, the Philippines, Turkey, and the United 15 percent within three years of the launch of the States of America have regulatory frameworks within program to ensure that reimbursements reflect a fair which health insurance fraud is an administrative, exchange. civil, and criminal offense. 12    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   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. Source: Republic of Indonesia-Ministry of Health.11 Beneficiary fraud is mitigated using information in all the selected states, except Maharashtra, are technology (IT) solutions. All the selected states automatically deemed empaneled. Each state has a have a list of identified photo documents issued by the committee for empanelment of providers, which also government that are valid identification proof for the addresses provider-related grievances and provides scheme. Only Gujarat and Tamil Nadu use biometric oversight. All private providers go through an on- thumb impression at the time of patient registration site assessment against minimum empanelment and discharge. As an additional security measure, criteria that includes available services, human Gujarat and Tamil Nadu use quick response (QR) resources, equipment, and infrastructure. In Tamil coded cards and chip based smart cards respectively. Nadu, provider-wise detailed assessment scores are Maharashtra is the only state where there is no published on the scheme website. This transparency mechanism for online verification and validation has led to competing hospitals reporting incorrect of ration cards against the online database of the information. The scheme-administering agency has Civil Supplies Department. Beneficiary enrollment is acted on such reports and corrective actions have handled by outsourced agencies (ISAs in Gujarat and been taken. Tamil Nadu and Maharashtra provide a Telangana and TPAs in Tamil Nadu). The scheme- distinct feature where quality incentivization is built administering agency in Gujarat undertakes periodic into the empanelment process. Pre-empanelment enrollment audits to ensure de-duplication of cards. assessments lead to six-point grading, with higher Provider empanelment fraud is addressed through grades eligible for higher tariff. In Tamil Nadu, all public a system of transparent online application and providers are automatically assigned the highest assessment of all private providers. Public providers grade. Maharashtra is the only state where the public providers undergo empanelment assessment and are 11 Republic of Indonesia - Ministry of Health. Fraud prevention in the eligible for grade-linked tariff, similar to the practice implementation of health security programs under the National Social Security System (Ministerial Decree No: 36-2015). followed for private providers.    Chapter 4: Some Common Anti-fraud Elements Across States    13 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 Prolonged stay for all medical Emergency intimation number family/same ailment/same management packages by the same obtained after performing the hospital hospital surgery Frequent blocking of high-end Sudden surge in particular cases Unusually high number of day care procedures treatments Frequent chemotherapy requests in Multiple stents for single vessel Patient switching hospitals in less than the prescribed duration disease day care Mandatory pre-authorization for all procedures in cannot be availed without referral from a public all the selected Indian states is used for preventing provider. Other states have not adopted referral and deterring fraud. Only Telangana is an exception mechanisms. where a few selected providers are exempt from All schemes undertake pre- and post-reimbursement pre-authorization of procedures up to an amount medical claims and beneficiary audits to detect fraud. of INR 50,000 (US$758) for non-critical procedures Across the four states, pre-claim payout audits are and INR 100,000 (US$1,515) for critical procedures. trigger based and the post-payout audits are sample Pre-authorization processes across all selected and trigger-based. All deaths are audited in all states, states are online, with approval turnaround time except Maharashtra. All the selected states conduct ranging between 12 and 24 hours and provision for a post-discharge beneficiary audit and verification authorization over telephone in cases of emergency. over phone calls to the discharged beneficiaries. This During the pre-authorization process, fraud is compares with Croatia, Turkey, and the United States detected through verification of mandatory clinical of America where pre- and post-payments audits are documents (diagnosis and investigation reports) conducted, but most other countries conduct only along with beneficiary identity details. There are post-payment audits. Like other countries, these multiple levels of scrutiny before authorization audits include both public and private providers. But is issued. In Telangana, public providers have the the process appears to be less rigorous for public flexibility to proceed with treatment without waiting providers in the Indian states. for pre-authorization approval. This contrasts with Use of technology for pre-authorization and Croatia, the Philippines, and the United States of claims processing is central to fraud detection America where pre-authorization is mandatory only efforts. Whereas all the selected states use IT, the for some high-end procedures. IT infrastructure and analytics is much weaker in Only Tamil Nadu uses a referral mechanism to contain India than internationally. All the selected states cost and reduce unnecessary treatment. This covers outsource technology infrastructure maintenance only 38 stand-alone diagnostic procedures. Public and management to specialized agencies either providers act as gatekeepers. Stand-alone diagnostic directly or through the appointed ISA/TPA/insurer. procedures that are a part of the benefits package Technology platforms in all selected states, except 14    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Maharashtra, use limited triggers for rule-based and with providers, like in Indonesia. All the selected outlier-based alerting algorithms (see Table 8). states conduct an annual assessment of the private providers to ensure continued compliance with the Global case studies revealed more advanced use prescribed empanelment criteria. This is similar to of IT solutions. Turkey and the United States of the practice adopted in Croatia. Anti-fraud practices America use advanced predictive/regression-based in the selected Indian states are compared with those and machine-learning models and social network in five countries in Table 9. analysis for detecting suspected fraud. Sophisticated analytical tools are under pilot in Croatia. These A detailed comparative overview of state-level anti- examples could be emulated in India. The cost- fraud practices is presented in Annex 1. effectiveness of the use of artificial intelligence Some state differences in anti-fraud efforts are technology in fraud detection could be explored. notable: Hotlines (call centers) are common across the ™™ To ensure adequate fraud detection capacity, selected states for detecting fraud. The hotlines Tamil Nadu recruits only retired personnel from provide avenues for beneficiary feedback. All the the state police forces as district vigilance officers. selected Indian states have instances where whistle- Among other responsibilities, these officers follow blowers have used hotlines to report suspected fraud. up with patients after discharge. The hotlines feed into social audit mechanisms that ™™ To prevent and deter beneficiary fraud, under the inform corrective measures toward improving patient MA Yojana and MAV Yojana in Gujarat, beneficiary experience in seeking care. Interestingly, the United cards are renewed every three years, for which States of America undertakes active promotion of beneficiaries have to produce recent income the whistle-blowing provision to promote fraud certificates from the designated government reporting. authorities. Sanctions for fraud range from issuing show ™™ All public and private providers in Maharashtra cause notices,12 to financial penalties, suspension, are assessed for their readiness to provide de-empanelment, delisting, and criminal prosecution. services under the scheme. Public providers are Sanctions in Maharashtra, Tamil Nadu, and Telangana not automatically empaneled. are limited to non-legal actions (issuing show cause notices, financial penalties, suspension, de- ™™ As a medical fraud prevention practice, empanelment). Gujarat is the only state which has Maharashtra has developed detailed procedure- taken criminal actions against erring providers. In wise protocols for pre-authorization. These all the selected states, sanctions are limited only to protocols, developed by a special committee of private providers, as in most countries. specialists drawn from apex medical institutions, are more than a list of mandatory investigations. Periodic review meetings and assessments further It is modelled around how clinical protocols are strengthen anti-fraud efforts and internal control developed and act as a decision-support tool for measures. The scheme-administering agencies in determining procedure(s) to be performed. These all the selected states organize regular meetings protocols were rolled out in 2015 after piloting. In 12 In India, show cause notices are written notices issued to the 2016, the protocols were embedded in the claims defaulting party clearly stating the defaults and providing them with management software. The automated protocols an opportunity to justify their position and provide reasons as to why disciplinary/legal actions may not be initiated against them. are being piloted in 14 empaneled hospitals.    Chapter 4: Some Common Anti-fraud Elements Across States    15 Fraud Management Practices under Selected GSHISs in Indian States and Other Countries Table 9:  Indian States Aspects of the Maharashtra Tamil Nadu No. Philippines Telangana Scheme Indonesia Gujarat Croatia Turkey USA 1 Number of 31 103 61 31 4 187 97 79 55 individuals covered (in millions)a 2 Fraud Public Public Public Public Public Public Public Public Public management agency agency agency agency agency agency agency agency agency responsibility 3 Insurance specific No No No No Yes Yes Yes Yes Yes legislation 4 Total staff ~459 ­ ~1,763 ~1,277 ~1,473 ~2,000 ~7,000 ~5,000 ~26,000 ~4,000b 5 Total no. of ~242 ~1,200 ~757 ~1,076 – – – – – Aarogyamitras 6 Explicit list of Yes Yes Yes Yes Yes No No Yes Yes services 7 Providers (both Both Both Both Both Both Both Both Both Both public, private) 8 Pre-authorization All All cases All Most For No Selected For Selected cases cases cases selected high cost sample, cases conditions cases part of and audit procedures conducted abroad 9 Case-based Yes Yes Yes Yes Yes Yes Yes Yes Yes bundled payment 10 Global budgetc No No No No Yes No No Yes No 11 Pay for No No No No Yes No No Yes Yes performanced 12 Volume control No No No No Yes No Yes Yes Yes 16    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Indian States Aspects of the Maharashtra Tamil Nadu No. Philippines Telangana Scheme Indonesia Gujarat Croatia Turkey USA 13 Standard No No No No Yes Yes No Yes Yes Treatment Guidelines (STG) 14 Compliance to No No No No Yes Yes No Yes Yes STG 15 Processing of No No No No Yes Yes Yes Yes No claims in-house 16 Claims processing Yes Yes Yes Yes Yes Yes No Yes Yes is electronic 17 Pre-payment Yes Yes Yes Yes Yes No Yes Yes Yes medical audit 18 Post-payment Yes Yes Yes Yes Yes Yes Yes Yes Yes medical audit 19 Fraudulent acts No No No Yes Yes Yes Yes Yes Yes are defined 20 Sanctions against No No No No Difficult Difficult Difficult Yes Yes public providers 21 Sophisticated No No No No Under Yes No Yes Yes analytical tools pilot 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.    Chapter 4: Some Common Anti-fraud Elements Across States    17 This has helped standardize pre-authorization ™™ Maharashtra and Telangana offer an interesting submission requirements and reduce subjectivity social audit method. Immediately on discharge in pre-authorization decisions. of a patient, a letter from the Chief Minister’s ™™ As a medical fraud detection practice, the office is issued to the patient providing details of CMCHIS in Tamil Nadu has a Morbidity and services sought and claim amount and enquiring Mortality Review Committee of medical about the quality of services. Feedback is specialists that conducts comprehensive clinical encouraged through self-addressed and prepaid review (sample and trigger-based) of all the postal envelopes. Almost 50 percent of the mortality claims and selected morbidity claims. discharged beneficiaries in Maharashtra respond to this letter. Feedback is analyzed and acted ™™ The scheme-administering agency in Tamil Nadu upon. There is a full-time dedicated staff to schedules weekly walk-in meetings where any handle this function in the scheme-administering stakeholder or citizen (beneficiary or otherwise) agency in Maharashtra. can walk in with grievances and complaints. Such complaints are addressed instantly to the ™™ Maharashtra and Telangana have a full-time extent possible. Easy access to the complaint and outreach worker in each public primary health grievance redressal system acts as a deterrent center (PHC) called the PHC Aarogyamitra, who against fraudulent practices. is responsible for post-discharge follow-ups and demand creation. 18    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   5. Key Takeaways Some key takeaways emerging from this examples. Merely embedding anti-fraud provisions in documentation may assist the central and state operational documents and guidelines, as seen in the governments determine their anti-fraud investment Indian states, is not adequate. strategies for efficient use of public resources. All scheme-administering agencies should have dedicated anti-fraud units and staff. The anti-fraud Fraud prevention unit should have an operational plan, adequate staff Institutional responsibility for preventing fraud at the state headquarters and in each district, and should lie with the public agency that administers adequate capacities for conducting investigations. the scheme. Intermediaries like the insurer, ISA, or Heavy dependence on Aarogyamitras to prevent the TPA play only a supportive role that does not fraud in the Indian state schemes makes it imperative substitute the primary anti-fraud responsibility of the for scheme-administering agencies to recruit them public agency. The institutional setup of the agencies directly, instead of through a TPA or an ISA and should have structures for anti-fraud efforts like the ensure that they are available round-the-clock in each Central Claims Monitoring Committee in Maharashtra empaneled hospital. There is a need for increased or the Mortality and Morbidity Review Committee in investment in human resources by the scheme- Tamil Nadu. administering agencies and for focus on capacity development. States may undertake a cost-benefit An overarching fraud framework/policy exists in analysis of one full PHC Aarogyamitra in each PHC all global cases and is recommended. Framework/ before adapting the practice to other states. The anti- policies should have a clear definition of health fraud unit staffing norms and competency matrix insurance fraud and abuse, distinguishing it from may be developed by the Government of India as a error and waste. The policy should prioritize fraud guidance for states. that is systemic, adversely affects the beneficiaries, and affects the scheme’s ability to fulfil its mission. Scheme-administering agencies should have strong Consequences of fraudulent behavior should be clearly oversight capacity at the state and district levels. spelled out in the provider and other intermediary Oversight capacity should be strengthened with contracts. Definitions of insurance-related fraud in active engagement of the State Health Societies and Indonesia and the United States of America are good the Directorates of Health Services. The existing    Chapter 5: Key Takeaways    19 sub-state structures (like the regional/divisional The Maharashtra model could be looked at for management units and the District Health Societies) replication in other states. should be leveraged for ensuring intersectoral convergence in oversight functions. This is reasonably Fraud detection strong at the state level in all states in the governing Online claims review with comprehensive fraud body of the scheme-administering agencies and at triggers and advanced data analytics could the district level in Maharashtra. strengthen fraud detection efforts. There is an Beneficiary fraud can be reduced through ample scope to strengthen data analytics using technology-based identification and verification. state-of-the-art IT. With high coverage levels and Government-issued identification cards should be increased demand generation efforts, it is imperative validated with at least one publicly owned online to upgrade the technology platform to enable beneficiary database as seen in Gujarat, Telangana, advanced algorithms for fraud detection, predictive/ and Tamil Nadu. These states are good examples for regression-based and machine-learning models, and the use of biometric thumb impressions at the time social network analysis. of enrollment, patient registration, and discharge, Multiple audits can help triangulate data for timely making the beneficiary identification procedure fraud detection. GSHISs should have a dedicated more robust. audit team and an annual audit plan. Audits include pre-authorization audits, pre- and post-payment A robust and transparent empanelment process for audits, hospital audits, beneficiary audits during all types of providers (public and private) can not hospitalization, and post-discharge and death audits. only be a fraud prevention tool but can also ensure Capacity for audits should be developed in-house quality of care. It is important for public providers to or sourced-in from the open market. Scheme- undergo the same assessment process as the private administering agencies should have the mandate providers. This will not only ensure a competitive and to audit empaneled public providers with the same more equitable provider environment and contribute rigor used for private providers. There should not toward quality of care but may also gradually reduce be a differential approach in the purchaser-provider beneficiary incentive for preferring private providers. transaction management and monitoring based on The Maharashtra model could be considered for provider type. replication in other states. Social audit efforts can feed into fraud detection and Pre-authorization reviews can be used for over time have a deterring effect as well. Beneficiary preventing and deterring fraud. The pre- grievance redressal system is essential, backed by a authorization process could be further strengthened round-the-clock toll-free helpline for beneficiaries using procedure-wise protocols that are modelled to file their complaints. Innovative mechanisms of around clinical protocol templates and aid the seeking beneficiary feedback such as a letter from treating team in decisions related to appropriateness the Chief Minister to all discharged beneficiaries help of a procedure to be performed. Tested pre- detect fraud and also act as a deterrent on erring authorization protocols, once embedded and providers. States may explore leveraging upon the automated within the claims management software, community-based monitoring mechanisms that have standardizes pre-authorization submissions and been set up under other health programs of the state reduces subjectivity in pre-authorization decisions. and central governments, such as the ‘Community 20    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Action for Health’ initiative under the National Follow-up and hold perpetrators accountable. Health Mission. Follow-up on likely cases of detected fraud is key. This can involve a range of activities, such Fraud deterrence as requesting clarification from the provider and investigating further. This step is also critical to Develop STGs to ensure quality of care and deter fraud in clinical diagnosis and management that may maintain a threat of detection as a deterrence. Not all be harmful to beneficiaries. Health outcomes are as cases identified will be truly fraudulent in the sense important as ensuring coverage. With multiplicity of of being knowingly and intentionally misleading. providers, STGs ensure standardization of care and However, it is valuable to seriously investigate and, if aid clinical audit of provider claims. It is important warranted, prosecute providers where appropriate. to socialize STGs among providers and ensure that A credible threat of detection and punishment can compliance to STGs is a contractual obligation having deter potential fraud on a larger scale and lower the legal consequences. cost than actual investigations. The threat should be real and, importantly, needs to be perceived as real Undertake robust costing exercises to inform and likely by the providers. tariffs and settle compliant claims in a timely manner. It is not just ‘how’ providers are paid that Ensure allocation of adequate and timely matters for fraud but also ‘how much’. Inadequate resources for scheme administration and claims reimbursements – even after controlling for potential reimbursement. State governments should volume gains – will deter some providers from ensure timely payment of insurance premium. empanelment; among others who do empanel, this This is especially critical for states that chose the increases the motivation for undertaking fraud given assurance mode of implementation and cover the that there is the perception that reimbursements risk themselves. are not reflecting a fair exchange. In the same vein, Regularly monitor and evaluate scheme delays in timely settlement of claims also create performance. Combating fraud is a dynamic process the environment and motivation for providers to and implementing a culture of monitoring, evaluation, undertake fraud. and feedback mechanisms, including related to Maximize data quality at source. A high degree of provider compliance metrics, claims data analysis, data quality is critical to identify fraud in empirical error rates, quality metrics, patient satisfaction data with acceptable precision. Error-prone data indicators, and so on can help reduce the incidence make it almost impossible to detect fraud. During of fraud and bolster confidence in the scheme. In this the setting up of a new scheme, there is a unique regard, a combination of approaches—from audits to opportunity to improve data quality during the different types of data mining algorithms—are likely design phase of data systems and user interfaces. In to be most effective. Implementing and comparing many cases, data errors and coding inconsistencies different anti-fraud efforts, for example, across can be alleviated with simple software tweaks, clear states, can help inform the design, refinement, and guidelines, and provider training. implementation of future anti-fraud efforts.    Chapter 5: Key Takeaways    21 Annex 1: Overview of State Schemes No. Aspects of the Scheme MA and MJPJAY CMCHIS Aarogyasri MAV Yojana (Maharashtra) (Tamil Nadu) Scheme (Gujarat) (Telangana) 1 Dedicated vigilance unit No Yes Yes Yes 2 Dedicated staff for fraud No Yes Yes Yes management 3 Documented fraud No No No No management policy 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 Yes Yes Yes Yes agreement 5 Pre-authorization For all procedures For all procedures For all procedures For most proceduresa 6 Minimum documentation Yes Yes Yes Yes required for pre-authorization 7 Responsibility of claims ISA TPA TPA ISA processing 8 Minimum documentation Yes Yes Yes Yes required for submitting claims    Annex 1: Overview of State Schemes    23 No. Aspects of the Scheme MA and MJPJAY CMCHIS Aarogyasri MAV Yojana (Maharashtra) (Tamil Nadu) Scheme (Gujarat) (Telangana) 9 Claims submission mode Both Online Online Online (online/hard copy/both) 10 Photo documentation of For all procedures For all procedures For all procedures For all procedures patients required 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 Yes - sample Yes - sample Yes - sample Yes - sample audit On-site verification of Yes Yes Yes Yes providers Audit agency ISA + TPA + TPA + ISA + Government Government Government Government 13 Providers that are subject to Only private Both Both Only private claims audit (public, private, or both) 14 Documented guidelines for No No No No internal control systems 15 Insurance specific regulation/ No No No No laws to prevent fraud 24    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   No. Aspects of the Scheme MA and MJPJAY CMCHIS Aarogyasri MAV Yojana (Maharashtra) (Tamil Nadu) Scheme (Gujarat) (Telangana) 16 Provider contracts exist For private For public and For private For private providers private providers providers providers 17 Explicit definition of fraud and No No Yes Yes abuse in provider contracts 18 Sanctions for fraud included in No Yes Yes Yes provider contract: Financial penalties Yes No Yes Yes Blacklisting/ For private For private For private For private de-empanelment providers providers providers providers Delisting For private For private For private For private providers providers providers providers Legal proceedings For private For public and For private For private providers private providers providers providers 19 Enforcement of legal Yes No No No consequences 20 Enforcement of management For private For private For private For private consequences (warning, providers providers providers providers 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.    Annex 1: Overview of State Schemes    25 Annex 2: Case Study: Mukhyamantri Amrutum (MA) and MA Vatsalya (MAV) Yojana, Gujarat Introduction MA Yojana and MAV Yojana Gujarat is a state in western India with a population (2012 to May 2018) of 62.7 million. It is among the top five major state zz Beneficiary families covered: 6.2 million economies in India, accounting for 7.6 percent of the (50 percent of total families in the state) country’s gross domestic product (GDP) with nearly 5 percent of the country’s population.13 Its TGHE is zz No. of claims processed: 1.07 million 5.9 percent of the total state expenditure and 0.8 zz Claims amount: disbursed: INR 14,699 million percent of the GSDP resulting in a per capita TGHE of (US$223 million) INR 1,156 (US$18) in 2014–2015.14 In 2017-18: In 2012, the Government of Gujarat launched a zz No. of claims processed: 467,049 health insurance scheme called the ‘Mukhyamantri zz Total claims value: INR 6,904 million (US$105 Amrutum Yojana’ (MA Yojana). It provides inpatient million), which is approximately 9 percent of benefits to BPL families and covers selected tertiary the Health Department’s budget (Revised surgical procedures through a network of empaneled Estimates) providers. The Schemes BPL families. The MAV Yojana, on the other hand, The MA Yojana and the MAV Yojana (expanded covers all families with annual household income version of MA Yojana to include additional beneficiary of up to INR 300,000 (US$4,545), frontline health categories and increased income eligibility limits) workers (ASHAs), reporters, fixed-pay Gujarat are managed and administered jointly by the state government employees (class 3 and 4), and Government of Gujarat. The MA Yojana covers all unorganized workers holding an unorganized worker’s identification number (U-WIN) card (issued by the state government). It also includes all women 13 Directorate of Economics and Statistics, Government of Gujarat https://gujecostat.gujarat.gov.in/sites/default/files/STATE- and children below the age of 21. Senior citizens DOMESTIC-PRODUCT-GUJARAT-STATE-2015-16-15052018.pdf. with annual family income of up to INR 600,000 14 National Health Profile 2017. Ministry of Health and Family Welfare, Government of India. (US$9,090) are included as well. Up to five members 26    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   in a family are covered under the MA Yojana and MAV Yojana. There is no difference between the MA Yojana Human Resources and the MAV Yojana in terms of benefits. The package (MA Yojana & MAV Yojana) comprises a positive list of explicitly defined tertiary SNC staff: 47 staff care packages of 698 procedures/surgeries covering zz State level: 15 nine clinical specialties, including burns, cardiac, zz District project officers: 32 cancer, kidney, neurosurgeries, neonatal diseases, poly-trauma, and joint replacement. The schemes ISA staff: 412 provide a risk cover of INR 300,000 (US$4,545) zz State level: 98 per family per year on a family floater basis, with zz District level: 72 an additional INR 200,000 (US$3,030) per year for zz Aarogyamitras: 242 kidney, liver, and pancreas transplants. Knee and hip Medical audit team (included in the numbers replacements are covered with a cap of INR 40,000 above): (US$606) per replacement, above which the costs zz Coordinators at the state level: 2 have to be paid by the patient. zz Team of empaneled specialists The MA Yojana and MAV Yojana are directly zz District coordinator for audit (1 in each of the administered by the Government of Gujarat in 32 districts) employed by the ISA an assurance mode. This is done through the Providers: Commissionerate of Health, Family Welfare, Medical zz One full-time hospital Arogyamitra who is the Services, and Medical Education with operational MEDCO (employed by the provider) 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 The SNC has an Executive Committee chaired by of hospitals; claim processing; deployment of the Principal Secretary, Public Health and Family Aarogyamitras; information, education, and Welfare. Other members include the Principal communication (IEC) activities; and the call center Secretary, (Expenditure), Additional Secretary while the IT solutions provider focusses on card (Medical Services), Mission Director (National printing and distribution, development of software, Health Mission), Deputy Secretary (Rural Health), setting up of kiosks at the service delivery points, and and representatives from the ISA and the IT agency. enrolment of beneficiaries. The MA Yojana and MAV The Executive Committee of the SNC reports to Yojana have enrolled 73 percent (6.21 million) of the the Health Minister and the Finance Minister. The total targeted 8.5 million families. This is equivalent executive head of the SNC is the project director, an to 50 percent of the total families in Gujarat. officer from the Indian Administrative Services, who provides policy guidance, leadership, and oversight on Organizational Structure for the management of the scheme. For the organogram, Implementing the Insurance Scheme refer to Exhibit 1: Organogram - SNC, Gujarat. The An SNC, set up under the Commissionerate of SNC has 47 full-time staff and a panel of medical Health, Family Welfare, Medical Services, and Medical specialists. All the ISA and IT agency staff are full- Education for the operations and management of the time and have the requisite experience. They have MA Yojana and MAV Yojana, is primarily responsible defined job descriptions and designated reporting for fraud prevention, detection, and management. authorities.    Annex 2: Case Study: Mukhyamantri Amrutum (MA) and MA Vatsalya (MAV) Yojana, Gujarat    27 Policies and Legislations for Fraud implementation cycle. Aided by a comprehensive Prevention, Detection, and Management technology platform designed and managed by an independent IT agency, the state and district teams The MA Yojana and MAV Yojana do not have an of the MA Yojana and MAV Yojana have mechanisms explicit fraud management policy or plan. The in place that are aimed at preventing and detecting scheme leadership ensures ongoing need-based frauds. Most common frauds include charging policy interventions. For example, to account for money from beneficiaries, unnecessary preadmission inflation in market rates, in 2015, the SNC increased investigation, overuse of procedures, and upcoding the package rates by 15 percent to ensure that (billing higher rates than services rendered). The reimbursements reflected a fair exchange. IT platform is enabled with fraud triggers related The fraud prevention, detection, and management to enrollment and claims. It allows for rule-based functions are integrated within all the processes and outlier analysis, though advanced data mining under the MA Yojana and MAV Yojana. There is no techniques and high-end analytics are not used. dedicated fraud management unit. District teams Fraud during beneficiary enrollment is addressed deployed by the ISA handle all fraud management through a beneficiary enrollment process that functions under the guidance and leadership of the includes multi-level verification of beneficiary District Advisory and Grievance Redressal Committee records, including photographs with the BPL list and the state team. of the relevant government departments and Sanctions for fraud include civil and criminal actions, issuing of bar (QR) coded ‘MA/MAV’ cards that financial penalties, suspension, de-empanelment, need renewal every three years with updated and delisting. There is no insurance-specific state financial eligibility certificates. Each card has a legislation. The ISA and health provider contracts unique registration number (URN) which is issued do not include the definition of fraud or explicitly after the mobile password-based verification, photo mention the consequences of fraud in the contracts. identification document verification, and income However, there is a clear protocol established for certificate verification from the relevant designated the SNC on follow-up actions pursuant to instances authorities. As a further step toward security and of abuse/fraud, including refund of the amount fraud control, the name of the head of the family illegitimately charged from the beneficiary in the first is verified from the BPL database and the issued instance; 100 percent penalty is charged the second cards include the picture of the head of the family time; that is, the hospital refunds the money that is and biometric thumb impressions of all the enrolled overcharged to the beneficiary and an equal amount is family members along with their basic details. deducted from the claim; the third time the full claim Before issuing the ‘MA/MAV’ card, each beneficiary is verified by the taluka verifying officer. All the is rejected; and in the fourth instance the provider is details are stored in a central server and are available de-empaneled for a period of three years along with on a real-time basis. In case of offline enrollment criminal proceedings against the provider. application, during data upload, the operator and field verifying authority verify the thumb impression Processes for Fraud Prevention, before uploading the application. Periodic de- Detection, and Management duplication of cards is done through verification Fraud prevention, detection, and management with the ration card and photo ID number and if a processes are built into every stage of the scheme duplicate card is identified, it is automatically blocked, 28    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   and the duplicate document reference number is noted. All the enrollment details and documents Empaneled Providers are checked randomly. If there are reports of money (MA Yojana & MAV Yojana, as of May 2018) being charged from beneficiaries during enrollment, Total providers: 185 criminal proceedings are initiated against such field Public hospitals: 22 staff/verifying authority. Recently, notices have Stand-alone dialysis centers: 49 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 and validation through bar coded cards and the beneficiary family intimating whether the card biometric identification. Each empaneled provider has been issued or blocked. A reminder SMS is also has a full-time Aarogyamitra (insurance coordinator sent to the beneficiary family whose card may be employed by the ISA) and hospital Aarogyamitra blocked on the three-year expiration of the income (a full-time medical doctor designated by the certificate. provider) who handle an exclusive patient helpdesk Empanelment fraud is deterred through online for beneficiaries. The Aarogyamitra registers application of providers, followed by pre- beneficiaries for treatment only after verifying the empanelment assessment of infrastructure, identity. The bar-coded MA and MAV cards have equipment, and human resources. However, public the photographs and fingerprint details of the providers are automatically empaneled. All public beneficiaries. Only after the identity is verified is the providers at the level of sub-divisional hospital and beneficiary referred to the hospital Aarogyamitra above, having minimum 50 beds, are automatically for clinical assessment and diagnosis. Biometric empaneled. A team of two local self-government verification of the beneficiary is also done at the (Zilla Panchayat) officials, the civil surgeon, one time of discharge. representative from the ISA, and two representatives Mandatory pre-authorization for all procedures is from the SNC undertake physical verification and used for preventing and deterring fraud. Both public on-site assessment of private providers who apply and private providers must seek pre-authorization online and fulfil the minimum eligibility criteria for for all procedures. Providers submit online pre- empanelment. The assessment report is shared authorization requests to the ISA. The ISA assesses with the District Advisory and Grievance Redressal the pre-authorization requests and subject to Committee and the State Empanelment Grievance compliance with all documentary requirements and Redressal and Disciplinary Committee that take available sum assured, pre-authorization is issued final decisions regarding provider empanelment. within 24 hours. Emergency cases are admitted with All private providers enter into one-year renewable telephone intimation to the call center run by the ISA service agreement with the ISA. There are no legal (against a number generated by the call center) and agreements between the ISA and the public providers. within 24 hours of admission the pre-authorization Regulation of providers is exercised by monitoring request is submitted to the ISA. This ensures that compliance to service agreement and monitoring there is no delay in the treatment of emergency utilization trends and claims patterns. cases. The design of the MA Yojana and MAV Yojana The MA Yojana and MAV Yojana have robust also allow for beneficiary intervention on account of beneficiary identification mechanisms that use pre-authorization fraud. On the submission of a pre- designated government identification documents authorization request by a provider, an auto SMS alert    Annex 2: Case Study: Mukhyamantri Amrutum (MA) and MA Vatsalya (MAV) Yojana, Gujarat    29 is immediately sent to the registered mobile number The insurer makes case-based bundled payments alerting the beneficiary of the amount for which to the providers, thereby reducing the probability pre-authorization has been requested. There are of any fraud in upcoding and unnecessary billing. in-built checks in the claims management software Reimbursements are based on predefined package that restrict patients from using the MA/MAV card in rates. The tariff structure is fixed through a bidding multiple locations. process for each of the listed procedures. The lowest rate quoted for a procedure is not necessarily Claims fraud is prevented and managed through taken up as the final tariff. If the committee a rigorous non-medical and medical verification decides that the lowest quoted rate is not feasible of claims by the ISA. Providers submit their claims in comparison with the prevalent market rates, online along with original copies of the claims and it undertakes due diligence before determining all supporting medical records and investigations. the tariff. No co-payments are required except for Claim submission can only be done online after joint replacements, where the cover under the MA the biometric validation and photograph of the Yojana and MAV Yojana is limited to INR 40,000 per beneficiary is uploaded and once the claim is submitted replacement. no further transaction can be made. All hard copies are meticulously catalogued by the SNC for easy An incentive of 10 percent over the package price retrieval, access, and future audits. Fraud triggers is allowed to providers who are accredited by the are built into the Hospital Management Information NABH/Joint Commission International (JCI)/ System that aid rule-based and outlier-based analysis Australian Council on Healthcare Standards (ACHS) and review. Some of the parameters used to rule out or any other accreditation body approved by the inconsistencies, morphing, falsification in records International Society for Quality in Healthcare. are (a) completeness of required documentation; Pre- and post-claims reimbursement audits are (b) consistency in clinical history of the patient conducted by the ISA and the SNA to detect fraud. during hospitalization and the line of treatment; and Audits are restricted only to private providers. The (c) critical examination of investigations reports, ISA audits 2 percent to 5 percent of randomly selected radiology images, and patient photographs. The ISA claims. In addition, 25 percent of those admitted and undertakes 100 percent physical verification of the receiving treatment are audited by the ISA and the online claim files with submitted claim documents. In SNC during hospitalization. Each private hospital is addition, there are random calls to the patients. The audited annually. For example, abuse in the type of approved claims amount is forwarded to the SNC for catheter used during chemotherapy was detected further action. As an additional control measure, all during a claim review. An inspection visit to the financial approvals are issued by the Director of the hospital detected similar malpractice in four cases Health Commissionerate and payments are released admitted at that time in the hospital. After further within 45 days of the submission of claims. due diligence the provider was suspended. Though there are no procedure-specific STGs, the MA Yojana and MAV Yojana have clinical/technical Additional Internal Control Measures guidelines and specifications for a few specialties Additional control measures include reviews by such as burns, joint replacement, and tissue the Executive Committee of the SNC, on-site dissection and quality parameters for soft tissue verification, patient feedback mechanism, and an expanders. IT system that allows for auditing of out-of-pocket 30    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   payments. The Executive Committee of the SNC above the sum assured). This creates a trail for audit meets regularly to review the progress of the MA of out-of-pocket expenses, if any. Yojana and MAV Yojana. Regular on-site verifications Patient feedback mechanisms feed into the fraud are central to fraud detection practices. Weekly detection efforts. At the time of discharge, a patient review meetings are scheduled between the SNC, satisfaction form is filled up. This is a mandatory ISA, and IT agency to discuss and resolve any issues. requirement for claims submission. In addition, the MA There are restrictions on the number of empaneled Yojana and MAV Yojana call center makes random calls hospitals in which the specialists can serve (up to to beneficiaries within a week of discharge to detect a maximum of three) and there are also checks to fraud. In one case, responses from the beneficiary detect that not more than one surgery is scheduled indicated a surgical procedure that was not included at the same time. in the package list. Further investigations revealed District coordinators undertake random surprise that the pre-authorization was taken for another visits to the empaneled providers for physical procedure. Criminal proceedings were initiated verification of the beneficiary identity of those against the provider. hospitalized and the details are recorded in a hospital audit form. Post-discharge beneficiary Conclusion audits are also conducted by the regional and district The MA Yojana and MAV Yojana have a very proactive coordinators and the observations are recorded in and pragmatic leadership that has ensured frequent a structured field audit form. For suspected cases, modifications in the scheme to make it responsive to technical audits are undertaken with experts. the health protection needs of the population. The Criminal action is taken against the hospital if fraud beneficiary enrollment and identification process is detected. For example, a field audit had indicated and the processes related to pre-authorization and that the patient was operated for hernia (not claims review are strong. There is also criminal action included under the MA Yojana) rather than stenting that the state has pursued against specific cases of for which pre-authorization was undertaken and fraud that are likely to act as a strong deterrent a police complaint was filed against the hospital. to other providers indulging in similar practices. The Audit Department of the state government However, some of the areas that the MA Yojana undertakes periodic process audits. and MAV Yojana may explore strengthening include The IT system allows for auto calculation and update developing an explicit fraud management policy and of available sum assured after adjusting all previous guidelines, greater oversight over empaneled public claims paid within the policy year. It captures the providers, augmenting capacity for data mining and patient’s contributions if any (either co-payments for advanced data analytics, and developing clinical joint replacement or payments instead of expenses pathways to improve quality of care.    Annex 2: Case Study: Mukhyamantri Amrutum (MA) and MA Vatsalya (MAV) Yojana, Gujarat    31 Annex 3: Case Study: Mahatma Jyotiba Phule Jan Arogya Yojana, Maharashtra Introduction MJPJAY Maharashtra, a state in the western region of India, (Cumulative from 2012 to July 3, 2018) ranks second in the country by population (112.4 zz Beneficiary families covered: 22.3 million million). It is among the most economically advanced zz Population coverage: 90 percent Indian states, accounting for almost 15 percent of (approximately) national GDP. In 2015–2016, Maharashtra’s TGHE zz No. of claims: 1.71 million was 5.1 percent of the total state expenditure and 0.6 percent of its GSDP, with a per capita TGHE of zz Amount pre-authorized: INR 37,874 million (US$583 million) INR 1,011 (US$16), almost the same as the all- India per capita public expenditure on health which In 2017–2018: was INR 1,112 (US$17).15 To strengthen access zz No. of claims: 471,104 to quality secondary and tertiary health care and zz Total claims outgo: INR 10,089 million (US$155 provide financial protection against catastrophic million), which is approximately 9 percent of the health expenses in the poor households, in 2012, the public health and medical education and drug Government of Maharashtra announced a flagship departments budget estimates for that year health insurance scheme Rajeev Gandhi Jeevandayee Arogya Yojana, which was renamed as Mahatma Jyotiba Phule Jan Arogya Yojana in 2017. farmers from 14 agriculturally distressed districts of the state. The unit of enrollment under the The Scheme MJPJAY is families and a maximum of five members in a family can avail the benefits. The benefits The MJPJAY provides cashless secondary and package comprises a positive list of explicitly tertiary medical and surgical treatment requiring defined packages that has 971 medical and surgical hospitalization to all families having an annual procedures and 121 follow-up packages from 30 household income of up to INR 100,000 (US$1,538). clinical specialties. Surgeries constitute 73 percent In addition, the beneficiaries of the MJPJAY include of the total procedures. The MJPJAY provides a risk 15 National Health Profile 2018. Central Bureau of Health Intelligence. cover of INR 150,000 (US$2,308) per family per Government of India. year on a family floater basis. For renal transplants, 32    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   the cover is up to INR 250,000 (US$3,846) per Human resources in the MJPJAY family per year. Organizations Staff numbers The MJPJAY is administered by a quasi-autonomous body, the SHAS, set up by the Government of State District Total Maharashtra. The SHAS has contracted a public Office Operations sector insurance company that covers the risk and implements the scheme at an annual premium of State Health 74 45 119 INR 690.16 The insurer has appointed three TPAs to Assurance Society handle the operations in clustered districts. TPA 1: MD India 145 907 1052 Organizational Structure for TPA 2: Paramount 77 196 273 Implementing the Insurance Scheme TPA 3: Mediassist 77 242 319 The SHAS has a strong governance structure with highest political representation in the state. The Total* 373 1390 1763 Governing Council of the SHAS is presided by the Chief Minister of the state. The Vice-President of the Total Hospitals Arogyamitras 795 SHAS is the Minister of the Public Health and Family Welfare Department. In addition to the President Total PHC Arogyamitras 405 and Vice-President, there are 17 members which Total numbers include all Hospital Arogyamitras & PHC * include three ministers and senior-level bureaucrats Arogyamitras of health, planning, finance, law, medical education, civil supplies, and labor departments. administration. For administration of health services, The SHAS has a defined organizational structure that the government has divided the state into eight is aligned to the implementation needs of the MJPJAY. circles. Each circle is headed by a deputy director. The chief executive officer (CEO) of the SHAS is an The deputy directors are responsible for monitoring officer from the Indian Administrative Services or allied the regional managers of the MJPJAY. Each district services, who provides policy guidance, leadership, has an MJPJAY monitoring unit chaired by the district and oversight on the management of the MJPJAY. It collector. The civil surgeon, who heads the Health has 74 full-time staff working in 16 departments/units Department in a district, is the member secretary of that include empanelment, pre-authorization, claims, the monitoring unit. In addition, the performance of grievance, and vigilance among other departments. the MJPJAY is reviewed by the guardian minister and For the organogram, refer to Exhibit 2: Organogram - the CEO of the Zilla Parishad of the district in their SHAS, Maharashtra. At the district level, the SHAS periodic administrative review meetings. employs 39 district coordinators (medical doctors) Operations staff at the district level are recruited and who report to 6 regional managers. managed by the TPAs. They include a district manager, The MJPJAY has strong administrative oversight a district medical officer, and a vigilance officer in and mechanisms for engagement with the Health each district; three Arogyamitras for each network Department at the district level and with the district hospital; one Arogyamitra in each PHC of the district; and one supervisor for every 20 Arogyamitras. Refer 16 This premium amount is valid until December 2018. to Exhibit 2: Organogram - SHAS, Maharashtra.    Annex 3: Case Study: Mahatma Jyotiba Phule Jan Arogya Yojana, Maharashtra     33 Policies and Legislations for Fraud Sanctions for fraud include putting providers Prevention, Detection, and Management on a watchlist, temporary suspension, detailed investigation, issue of show-cause notice, and de- The MJPJAY does not have an explicit fraud empanelment and delisting of providers. These management policy or plan. In general, policy sanctions are listed in the provider agreement decisions and management actions are aimed at under ‘Processes for de-empanelment’ which may reducing fraud. An example of fraud prevention- be because of any breach of contract, including oriented policy decision is reserving 13 percent fraud. There are no financial penalties. There are no (131 of 971 procedures) often-abused secondary sanctions for the public providers either. care procedures like hysterectomy only for public providers. Management actions aimed at preventing fraud include detailed guidelines for Processes for Fraud Prevention, beneficiary identification, pre-authorization, claims Detection, and Management processing, and other important aspects of scheme There is no beneficiary enrollment drive under the implementation that guide all fraud prevention and MJPJAY. Eligible beneficiaries can directly walk into detection practices. any empaneled provider facility and avail the services Fraud detection efforts are spearheaded by a with the mandatory identification documents. dedicated Vigilance Department within the SHAS Beneficiaries are enrolled at the point of service at with a total team of 54 staff (including those of the time of registration for treatment. TPAs) dedicated for anti-fraud efforts. The Vigilance Empanelment fraud is deterred through online Department of the SHAS has two dedicated staff at application, followed by a pre-empanelment the state level supported by three full-time staff of assessment of public and private providers. There the TPAs dedicated for vigilance. At the district level, is no difference in the empanelment process the TPAs have about 9 full-time staff for vigilance and based on provider type. The MJPJAY portal has a cadre of 40 district vigilance officers. a provision for online submission of applications The provider’s contract does not define fraud under for empanelment. All private and public hospitals the MJPJAY. However, it has a reference to criminal that fulfil the minimum eligibility criteria can prosecution in cases of detected fraud. Providers are apply. The empanelment process includes an regulated through the contracts they have with the assessment that is modelled around the NABH insurer. Under the MJPJAY, each public provider also accreditation guidelines and based on minimum enters into a contract with the insurer. There is no standards classified into nine input and functional difference in the contracting mechanism of the public aspects like human resource, infections control and private providers. measures, and medication monitoring practices. The assessment team consists of officials from the Directorate of Health Services and the SHAS. Empaneled Hospitals (MJPJAY) The TPA staff support the assessment team in (as of May 2018) the infrastructure audit. Only those facilities that Total network hospitals: 492 achieve the minimum specified threshold score are Corporate hospitals: 414 (84%) empaneled and are assigned grades based on their Public hospitals: 78 (16%) scores. All facilities that hold a valid Quality Council of India (QCI)/NABH accreditation at the time of 34    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   application are exempt from assessment and are These automated protocols are being piloted only in assigned the highest grade. The assessment team 14 empaneled hospitals. This has helped standardize submits its report and recommendations to the pre-authorization submission requirements and Empanelment Committee that is responsible for reduce subjectivity in pre-authorization decisions. the final empanelment decision. The Empanelment Providers submit online pre-authorization requests Committee is headed by the CEO of the SHAS. Other to the TPA. This task is handled by the full-time members of this committee are the SHAS regional medical coordinators (MEDCOs) designated by the managers and representatives of the insurer. provider for the MJPJAY and the network hospital Beneficiary identification at the point of service Arogyamitra deputed by the TPAs. The TPA assesses is done through one of the listed identification the pre-authorization request and pre-authorization documents and the ration card issued by the Civil is issued within 12 hours. As an additional security Supplies Department. The SHAS has detailed measure, pre-authorization approvals that remain guidelines that list different scenarios and action pending and are not updated by the provider within points to aid network hospital Arogyamitras in 30 days are auto-cancelled by the IT system. All determining the validity of the identity documents pre-authorization requests are scrutinized at three and eligibility of the beneficiary. Beneficiaries from levels: the 14 agriculturally distressed districts are required ™™ Level   1: Scrutiny is non-medical (includes to produce special ration cards issued to them by verification of patient details and identity along the government. Alternately, a certificate from with all other non-medical documents like the concerned Talathi/Patwari, stating that the beneficiary is a farmer or a family member of the pre-authorization forms, consent, and farmer, with a valid photo identification proof of the counselling). It is done by the network hospital beneficiary is acceptable. There is no mechanism for Aarogyamitras. online verification and validation of the beneficiary ™™ Level 2: Scrutiny is non-medical and undertaken ration cards with the Civil Supplies Department by the executive in the TPAs. database. The MJPJAY does not use biometrics for ™™ Level 3: Scrutiny covers medical review of the beneficiary verification and authentication. request by panel doctors/specialists who take Mandatory pre-authorization for all procedures by final pre-authorization decisions. all providers is used for preventing and deterring All rejected pre-authorization cases are forwarded fraud. The MJPJAY has developed detailed pre- to a two-member Technical Committee. The authorization protocols and is piloting its integration committee includes the chief medical consultant of in the automated workflow process. Minimum pre- the SHAS and the chief medical officer of the TPA. If authorization documentation requirements exist the Technical Committee is divided in its opinion on for each procedure. For 870 of the 921 procedures, a pre-authorization case, the case is referred to the pre-authorization requirements are converted into insurer for a final decision. detailed procedure-wise protocols. In 2015, the SHAS constituted a special committee of specialists Claims fraud is detected and managed through drawn from apex medical institutions to develop online verification of claims by the TPA executives the protocols. They were piloted for 30 days before and specialist doctors. The process is less rigorous statewide rollout. In 2016, all 870 protocols were for public providers. Preliminary verification of embedded in the claims management software. claim documents is done by the network hospital    Annex 3: Case Study: Mahatma Jyotiba Phule Jan Arogya Yojana, Maharashtra     35 Arogyamitra at the time of online submission. Photo Department wherever required. The medical audit and video documentation of patients and evidences team comprises two doctors from the SHAS and of pre and post-procedures are required to be doctors from the TPAs. The SHAS prepares a monthly submitted for claims processing. After submission, audit schedule. There is no advance intimation claims executives undertake the first level of to the providers regarding the audit schedule. scrutiny to check compliance with the submission Each hospital is audited every three months and requirements and verify the patient’s details. At adverse observations, if any, are reported to the the second level, comprehensive medical scrutiny Empanelment Committee for further action. is done by the specialists. The IT system does not have fraud triggers. In practice, public providers’ Additional Internal Control Measures claims are processed and paid without evidences Additional internal control measures include a set of that are otherwise mandatory for private providers. activities aimed at overall monitoring of the MJPJAY, For example, video documentation of laparoscopy where management decisions and corrective procedure is not mandatory for a public provider if the actions related to fraud prevention and detection procedure is certified by the head of the department is central to all efforts. Some of these activities are and often handwritten reports are accepted from (a) internal reviews done by the CEO; (b) weekly public providers. The review team undertakes rule- departmental meetings; (c) video conferencing with based and outlier-based analysis on a regular basis. The IT platform has a claim settlement module along district coordinators every two months; (d) biannual with electronic clearance and a payment gateway. All meetings of the State Monitoring Committee repudiated claims are reviewed by the Central Claims headed by the Principal Secretary, Health; and Monitoring Committee, which is headed by the (e) visits by district coordinators to at least three additional director, health services. Other members hospitals everyday for spot inspections, meeting of are the chief medical officer of the TPAs and doctors inpatients, verification of hospital records, physical from the insurer. inspection of wards, on-bed occupancy check, and patient feedback. District coordinators submit their The insurer makes pre-authorized case-based inspection reports daily to the field operations bundled payments to providers as one of the support services team at the state office of the SHAS measures for reducing fraud because of upcoding and that has one dedicated full-time supervisory staff for unnecessary billing. The tariff structure is fixed by an every seven district coordinators. in-house committee. The SHAS does not undertake any costing exercise to determine tariff. At the time In addition to the above mentioned activities, all of re-contracting the insurer after every three years, the SHAS processes and finances are subject to tariff of selected procedures are reexamined in internal audits, annual statutory audits, and audits relation to the existing market rates to ensure that by the Comptroller and Auditor General of India. The the prices remain competitive. Finance Department of the state government has deputed one full-time person in the finance unit of the Pre- and post-claims payout audits are conducted SHAS for oversight of the use of public resources. by the TPA and the SHAS to detect fraud. Audits include patients during hospitalization and post- discharge, audits of all rejected claims, and hospital Social Audit audits. This is coordinated by the medical audit The MJPJAY has a complaints and grievance redressal unit of the SHAS and supported by the Vigilance system. A letter from the Chief Minister’s office 36    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   is dispatched to the residence of each discharged Conclusion patient and includes a self-addressed and postage- The MJPJAY has adopted a range of anti- paid letter which is used by the patients to provide fraud measures, but there is scope for further feedback. There is almost 50 percent response rate. strengthening. Whereas the governance structure, The SHAS analyzes all the patients’ responses and district-level oversight, clinical protocols for pre- takes appropriate corrective measures to redress authorizations, and Chief Minister’s letter seeking grievances. A 24-hour call center is also available feedback from discharged patients are fraud for the patients to lodge their complaints. All the prevention and detection practices that other states discharged patients receive phone calls from the could consider adapting, the anti-fraud architecture call center seeking feedback on the quality of of the MJPJAY may be further strengthened with services received and problems encountered, if the following: (a) documented anti-fraud policy any. Patients can also complain through a GPS- and guidelines, (b) mechanisms for verification of based mobile application. The PHC Aarogyamitras beneficiaries through access to online database of further strengthen the SHAS’s social audit process. the Civil Supplies Department, and (c) an upgraded They are responsible for patient follow-ups post IT platform with inbuilt fraud triggers and advanced discharge and support in creating demand and algorithms for fraud detection. ensuring referrals.    Annex 3: Case Study: Mahatma Jyotiba Phule Jan Arogya Yojana, Maharashtra     37 Annex 4: Case Study: Chief Minister’s Comprehensive Health Insurance Scheme, Tamil Nadu Introduction CMCHIS Tamil Nadu is one of the five southern states in India (January 2011 to May 2018) hosting about 6 percent of country’s population.17 It zz Beneficiary families covered: 15.72 million is one of the most economically developed states in (80 percent of the total 19.6 million families in the country. Its TGHE is 5 percent of the total state the state) expenditure and 0.7 percent of the GSDP resulting zz No. of claims processed: 2.35 million in a per capita TGHE of INR1,162 (US$18) in 2014– zz Claims amount disbursed: INR 45,080 million 2015.18 (US$683 million) In 2012, the Government of Tamil Nadu introduced In 2017–2018 the CMCHIS. By 2017–2018, the CMCHIS had a zz No. of claims processed: 480,386 budget outlay of INR 13,480 million (US$204 million), approximately 13 percent of the budget outlay of the zz Total claims outgo: INR 8,770 million (US$133 million) Health Department. zz CMCHIS budget outlay: INR 13,480 million (US$204 million) The Scheme The CMCHIS is administered by the Government of Tamil Nadu, which targets poor families residing in include 1,027 medical and surgical procedures across the state with annual household income of up to 40 disease specialties and 38 stand-alone diagnostic INR 72,000 (US$1,091). In addition, the CMCHIS procedures. Of these 1,027 procedures, 154 are covers all refugees from Sri Lanka in the camps and designated for post-discharge follow-up. Eight high- differently-abled persons in the state. There are no end tertiary-level procedures—renal, liver, lung, heart, limits on the number of family members in each bone marrow/stem cell transplants, and cochlear and eligible family. The benefits package comprises auditory brain stem implantation—are also covered. a positive list of explicitly defined packages that The CMCHIS provides a risk cover of INR 100,000 (US$1,538) per family per year on a family floater 17 Census 2011, Government of India. basis, with an additional INR 100,000 (US$1,538) per 18 National Health Profile 2017. Ministry of Health and Family Welfare, Government of India. year for the 154 specifically listed procedures. For the 38    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   eight high-end tertiary procedures, once the available sum insured is exhausted, the government directly Human Resources (CMCHIS) reimburses up to INR 3.5 million (US$53,864) to the TNHSP staff dedicated for the Tamil Nadu-CMCHIS: empaneled providers. For this purpose, the Tamil 14 staff Nadu government has a dedicated corpus fund. A zz Additional director: 1 government order stipulates that 27 percent of the zz District revenue officer: 1 claims receipts by all empaneled public providers shall zz Deputy directors: 2 be deposited into this corpus fund. zz Medical officers: 10 The risk under the CMCHIS is covered by United Project office at the state level: 255 staff (excluding India Insurance, a public insurance company (the support staff) ‘insurer’), which was selected through a bidding zz Doctors: 98 process. Bids are restricted to public sector insurance zz Dedicated vigilance staff: 7 companies only. The insurer subcontracted three zz Claims validators (non-medical): 78 private sector TPAs19 to handle the operations in zz Operations and other staff: 72 clustered districts. The annual premium is determined through the bidding process and is currently INR 699 Medical audit team at the state level (17 staff) (US$11) per year per beneficiary family unit plus zz 2 doctors from each of the three TPAs applicable taxes. zz 1 doctor from the insurer zz 10 doctors from the TNHSP (indicated earlier) Organizational Structure for District staff (recruited by the TPAs): 976 Implementing the Insurance Scheme zz District project officers: 33 The primary responsibility of the implementation zz District coordinators: 44 oversight, including fraud prevention, detection, zz District medical audit doctors: 32 and follow-up is that of the TNHSP. The TNHSP zz District vigilance officers: 29 is a registered society set up in 2005 by the zz Insurance coordinators deputed by the TPAs in Government of Tamil Nadu responsible for managing empaneled providers: 816 and implementing the CMCHIS among a number zz Kiosk operators: 18 of other schemes/projects of the Department of zz Others: 4 Health and Family Welfare (DoHFW). The TNHSP Call center staff: 32 has an executive body called the State Empowered Empaneled Provider Committee, chaired by the Chief Secretary to the state government, and includes 12 members from various zz One full-time MEDCO (employed by each empaneled provider) state government departments, including DoHFW. The executive head of the TNHSP is the project director, an officer from the Indian Administrative DoHFW on all policy matters, including financing Services, who provides policy guidance, leadership, of the CMCHIS. The existing accountability and oversight on the management of the CMCHIS. structures within the DoHFW for all departmental This person is responsible for coordination with the activities include the management and operations 19 Vidal Health Insurance TPA Pvt Ltd, MDIndia Healthcare Services of the CMCHIS. For the organogram, refer to (TPA) Pvt. Ltd., and Medi Assist India TPA Pvt Ltd. Exhibit 3: Organogram - Scheme-administering    Annex 4: Case Study: Chief Minister’s Comprehensive Health Insurance Scheme, Tamil Nadu    39 Agency (TNHSP), Tamil Nadu. The operational head of the CMCHIS is an officer at the rank of an additional Empaneled Providers (CMCHIS) director on deputation from the DoHFW. At the state (as of May 2018) level, the TNHSP has approximately 14 staff engaged Total providers: 881 hospitals in the CMCHIS, with additional support staff. Most of Public providers: 25% (224) these staff are medical doctors because the medical Diagnostic centers: 200+ review and fraud oversight functions are directly handled by the TNHSP. Medical Specialists are sourced (for stand-alone diagnostic procedures) from government medical colleges for expert opinion and participation in various committees. The district vigilance officers, appointed by the TPAs, are retired integral part of the job descriptions of all key officials from the state police services. All insurer personnel at all levels across the TNHSP, insurer, and and TPA staff are full-time, with job descriptions and TPAs. District teams deployed by the TPAs, including designated reporting authorities. district vigilance officers, district medical officers, and managers handle all fraud management-related Policies and Legislations for Fraud functions under the guidance and leadership of the state team. Prevention, Detection, and Management Sanctions for fraud include civil and criminal actions, The CMCHIS does not have a fraud management financial penalties, suspension, de-empanelment, policy or plan. Intensive human resource efforts, and delisting. There are no insurance-specific state basic but fairly strong technology infrastructure, legislations. All contracts/agreements between parties and proactive leadership and management are have non-legal (for example, disciplinary actions, reportedly adequate and have been successful in financial penalties, suspension, de-empanelment) limiting the cases of fraud. The TNHSP leadership and legal (for example, civil and criminal) provisions ensures ongoing need-based policy interventions. to act against fraud, though until now only non-legal For example, package utilization volumes and trends provisions have been enforced. However, there is no are constantly monitored for potential abuse and direct agreement between the empaneled public fraud. Based on such reviews, policy decisions related providers and the insurer, thereby restricting the to reserving frequently-abused packages like hearing insurer from any direct action against public providers aids, hysterectomy, and revision joint replacements and limiting such action to only empaneled private (158 packages as of May 2017) only for government providers. All cases demanding any action against the providers have been taken. In addition, the 38 stand- public providers are routed through the TNHSP and alone diagnostic procedures can be undertaken only are limited to advisories for corrective actions with on referrals from government hospitals. copies to the Health Directorate. The CMCHIS has a vigilance unit within the TNSHP. Processes for Fraud Prevention, The unit coordinates with the vigilance teams, the insurer, and the TPAs and works in close coordination Detection, and Management with the medical audit team. The fraud prevention, Fraud during beneficiary enrollment is addressed detection, and management functions are integrated through triangulation of beneficiary records, within all the processes under the CMCHIS. Fraud including photographs with the existing database of prevention, detection, and management are an the Food and Civil Supplies Department. Verification 40    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   of beneficiaries is a three-step process. At the time open access to this information has led to complaints of enrollment, the beneficiary details are verified to the TNHSP about particular hospitals falsifying against the BPL database of the state government. records to claim possessing certain facilities. The Verification activities include checking the name and TNHSP has taken actions in response to such photograph from the database of the Food and Civil complaints and there have been instances where Supplies Department and income proof from the such empaneled hospitals were downgraded. This is village administrative officer. Refugees from Sri Lanka in contrast to the relatively lenient approach toward and the families of differently-abled persons and other managing empaneled public providers, with no entry eligible beneficiaries are enrolled based on similar requirements and automatic assignment of second verifications in the state database and certifications highest grade. from concerned government departments. Once Beneficiary identification mechanisms with verified, the TPAs enroll beneficiaries into the designated government identification documents CMCHIS. With high population coverage of the and Aadhar seeding of beneficiaries allow for CMCHIS, enrollment fraud is not a challenge. The biometric identification and verification and prevent CMCHIS targets almost 80 percent (15.7 million) of fraud through fake beneficiaries. Each empaneled the total families (19.2 million) residing in the state, provider has a full-time insurance coordinator who all of which are already enrolled under the scheme. handles an exclusive patient desk for the CMCHIS Empanelment fraud is deterred through online beneficiaries. When a beneficiary reports to an application, followed by an on-site assessment of empaneled provider, the insurance coordinator infrastructure, equipment, and human resources. verifies the identity of the beneficiary: (a) the All empanelment-related decisions and information beneficiary produces her/his smart card, issued are available in the public domain. All the private under the CMCHIS, and ration card as a supporting providers go through a mandatory empanelment document; (b) the insurance coordinator uses the process, including on-site physical assessment, but identification number on the smart card to verify government providers are automatically empaneled. the beneficiary from the CMCHIS database where It is mandatory for all empaneled private providers the beneficiary’s photographs are available along to possess at least entry-level accreditation from the with details of each family member; and (c) only NABH. Service agreements are signed only between if there is no mismatch during this verification is the private providers and the insurer. A team of the beneficiary’s photograph and biometric thumb doctors from the TNHSP and the TPA, including a impression taken by the insurance coordinator and representative from the insurer assess all private the patient is registered for treatment in the hospital providers based on detailed assessment checklist under the scheme. However, one limitation is that that is available on the CMCHIS website (https:// the insurance coordinators are available only during www.cmchistn.com). the day shift and not round-the-clock. All empanelment decisions are taken by the Mandatory pre-authorization for all procedures Empanelment and Disciplinary Committee (EDC) is used for preventing and deterring fraud. After set up by the TNHSP. The EDC is also responsible beneficiary registration, both the public and private for coordinating all provider-related fraud detection providers submit online pre-authorization requests processes and follow-up actions. Detailed assessment along with supporting documents and investigation score sheets are publicly available for each empaneled reports that are listed as minimum requirement private hospital. There have been instances where for pre-authorization of each procedure. All pre-    Annex 4: Case Study: Chief Minister’s Comprehensive Health Insurance Scheme, Tamil Nadu    41 authorization requests are verified by the TPAs who and when required, cases are escalated to the TNHSP undertake verification of beneficiary identity along team and the Morbidity and Mortality Committee of other non-medical verifications (for example, name, the TNHSP. District vigilance officers initiate fraud age, identity details) followed by medical verification investigations under the directions of the state team of the request. Subject to queries, if required, and and the EDC. sum insured available, pre-authorization requests There are no STGs for verifying the line of treatment are approved within 24 hours for non-emergency during the claims review process. However, the cases. For emergency cases empaneled providers Mortality and Morbidity Committee of the TNHSP may seek pre-authorization over telephone. This is conducts a monthly clinical review of all death cases followed by the routine pre-authorization request and other randomly selected cases to assess the line and approval. of treatment appropriate to diagnosis, efficacy of Claims fraud is prevented and managed through a prescriptions, and clinical progress of the patient. three-step documented process for verification and Regarding fraud control during claims processing, processing of claims. TPAs are responsible for all the TNHSP is more cautious for medical procedure claims processing and management for their assigned claims as they are more prone to fraud than surgical districts. Providers submit claims online based on procedures. The TNHSP has recently initiated a predefined list of minimum documentation and documenting the claims management process and evidences required, including photo documentation. the process of detecting fraud. TPAs have designated claims validators, claims The insurer makes case-based bundled payments to processors, and claims approvers with defined providers, thereby preventing any fraud because of responsibilities. They are supported by 35 fraud upcoding and unnecessary billing. Reimbursements triggers that the IT system activates. However, there are based on predefined package rates for pre- is no automated detection of morphed photographs authorized procedures. The tariff structure is fixed by and no advanced algorithms for fraud detection. an in-house committee based on local market trends Some of the parameters used to manually rule out and review of package prices for national schemes inconsistencies, morphing, and falsification in records such as the CGHS. There is no fixed periodicity of are (a) completeness of required documentation; revising prices; however, this is reviewed at the time (b) consistency in clinical history of the patient of issuing the bid documents for hiring insurers. during hospitalization and the line of treatment; and (c) critical examination of investigations reports, Pre- and post-claims reimbursement audits are radiology images, and patient photographs. The fraud conducted to detect fraud. These include pre- detection process appears to be less rigorous for authorization audits, at least 5 percent of claims audit, empaneled public providers, with no legal provision post-discharge beneficiary audits, 100 percent death for actions against them. audits, and hospital audits (each hospital is audited at least one in a year). If inconsistencies are detected, the claims management team of the TPAs initiate queries Internal Control Processes that Lead against the concerned providers. Based on responses from providers, in consultation with the claims head, to Fraud Prevention, Detection, and final decisions are made. Penalties may include partial Management or full rejection of the claim amount. All cases related Internal control mechanisms revolve around to denial of claims are monitored by the TNHSP. As segregation of responsibilities, multi-level system 42    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   of verification and audits, and patient feedback and lab registers. Insurance coordinators, directly mechanism. Transparency in all information and recruited by the TPAs, are embedded within each reports related to hospital assessments, detailed empaneled provider as the focal point of contact assessment reports, and empanelment decisions, for all beneficiaries and also for continuous on-site publicly available on the TNHSP website, significantly monitoring of the entire process cycle from beneficiary contribute toward preventing and detecting admission to discharge. The insurance coordinators empanelment-related fraud. are rotated between providers every three to four In addition to the processes described earlier, the months to prevent any collusion with the providers. TNHSP has institutionalized several internal control Periodic home visits are also conducted. The vigilance measures to prevent and detect fraud. These include: mobile app is used, which allows for geo-tagging of (a) weekly review meetings between the insurer, hospitals and beneficiary homes during audits. TPAs, and the TNHSP; (b) weekly analysis of granular Patient feedback mechanisms feed into fraud data by district and by provider for outlier- and rule- detection efforts. Patient satisfaction sheets post based deviations aided by automated dashboards; discharge, beneficiary calls to a 24x7 call center (c) a proactive EDC that provides oversight on the dedicated for the CMCHIS, and outgoing calls from the providers even after empanelment; (d) zone-wise and call center to discharged patients (on a sample basis) region-wise review meetings; (e) open door walk-in to determine overall experience of the beneficiaries are meetings managed by senior TNHSP officials on fixed some of the means that feed into the fraud detection days and time each week where anybody can walk in process. Almost 2,500 outbound calls are made per without any prior appointment for redressing their month from the call center which include quality grievances and complaints; (f) a WhatsApp group check and verification calls to beneficiaries. Based on messaging system for information sharing, alerts, and such triggers, the district-level vigilance officers visit actions with a mutually agreed turnaround time for the homes of the discharged beneficiaries for audit response (6 hours) between the insurers, TPAs, and and based on the complaint, launch an investigation TNHSP; (g) statutory annual audits by the insurer; into the hospital in question. and (h) audits by the central apex audit institution of the Government of India (Comptroller and Auditor Conclusion General of India). The CMCHIS appears to have robust fraud prevention, A range of frauds are detected under the CMCHIS. detection, and management processes. These are These include manipulation of patient records, that is, built around strong leadership and governance, investigation reports, morphing of photographs, and vigilant monitoring mechanism, and a basic but quite ghost reports. Instances of suspected fraud are also robust technology infrastructure implemented by a seen among public providers, though reportedly the highly committed team of the insurer and the TPAs discrepancies in public provider records are primarily that work in very close coordination with the TNHSP. due to lack of capacity and time. However, some of the areas that the TNHSP may Regular on-site verifications are central to fraud explore strengthening are developing explicit fraud detection practices. On-site verifications are mostly management policy and guidelines, ensuring presence done by the district teams. The scope of verification of insurance coordinators round-the-clock in the includes, among others, enquiries with patients, empaneled providers, conducting pre-empanelment investigation done, treatment provided, triangulating assessment of public providers (at least for tertiary- case sheets with documents submitted online, level procedures), and augmenting capacity for data verifying surgical scars, post-operative investigations, mining and high-end data analytics.    Annex 4: Case Study: Chief Minister’s Comprehensive Health Insurance Scheme, Tamil Nadu    43 Annex 5: Case Study: Aarogyasri Scheme, Telangana Introduction The Aarogyasri Scheme Telangana is a new state carved out of the erstwhile (Cumulative from April 2007 to state of Andhra Pradesh in 2014, with a population September 2016) of 35 million.20 In 2015–2016, its per capita GSDP zz Beneficiary families covered: 7.72 million per capita was INR 162,168 (US$2,495). The GSDP zz Population coverage: 93 percent grew at 10 percent in 2017–2018, contributing to (approximately) 4.2 percent of the all-India GDP.21 Since its formation, zz No. of pre-authorizations: 2.46 million the Telangana government has significantly zz Amount pre-authorized: INR 66,068 million increased its expenditure on health. Its per capita (US$1,001 million) health expenditure increased from INR 708 (US$11) in 2014–2015 to INR 1,492 (US$23) in 2017–2018. In 2016–2017: The Government of Telangana provides financial zz No. of pre-authorizations approved: 275,303 protection to the poor through the Aarogyasri zz Total amount approved: INR 7,100 million Scheme, a health insurance program launched in (US$108 million), which is approximately 15 2007 in the erstwhile Andhra Pradesh, and after percent of the Health Department’s budget reorganization, the state of Telangana continued (revised estimates) for that year with the scheme under the same name. zz Spending per beneficiary (excludes scheme administration cost): INR 920 (US$14) The Scheme The Aarogyasri Scheme provides inpatient family. The benefits package comprises a positive secondary - and tertiary-level medical and surgical list of explicitly defined packages that include 949 treatment to BPL households. There are no limits procedures/surgeries covering 19 surgical and 14 on the number of family members in each eligible medical specialties. About 83 percent of the packages are surgical procedures. In addition, there are 75 20 http://ecostat.telangana.gov.in/telangana/Home. surgical follow-up packages and 50 medical follow- 21 Directorate of Economics and Statistics, Government of Telangana. up packages. The scheme provides a risk cover of INR http://ecostat.telangana.gov.in/PDF/PUBLICATIONS/GSDP_ Estimates_2017-18.pdf. 150,000 (US$2,272) per family per year on a family 44    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   floater basis, with an additional buffer provision of INR 50,000 (US$758) per year per family. Under Human Resources (Aarogyasri Scheme) rare circumstances, the available sum assured in a zz CEO: 1 (not full time) particular year is carried forward to the next year zz AHCT staff: 72 to allow access to increased sum assured, in case of zz TPA staff: 63 rare emergencies. This requires approval of the CEO zz Call center staff (managed by the TPA): 82 of the scheme-administering agency. The scheme zz Field operations: 1,255 (including 464 network also pays the costs for cochlear implant surgery with Aarogyamitras, 612 PHC mitras, and 62 team auditory verbal therapy up to a maximum of INR leaders) 650,000 (US$9,848) per case. zz One Aarogyasri MEDCO in each empaneled The scheme is administered by an independent hospital agency set up by the Telangana government. This entity is called Aarogyasri Health Care Trust (the ‘Trust’ or the ‘AHCT’), with operational support from The Trust has 12 departments/units: planning an external agency MD India (ISA) and a technology and coordination, EDC, operations unit, grievance, partner, Tata Consultancy Services, which handles monitoring unit, audit and vigilance unit, finance and the IT platform and the software. In addition to the human resources, among others. At the district level, Aarogyasri Scheme, the Trust also manages a health there are MEDCOs, but no full-time vigilance officers. insurance scheme for state government journalists All Trust staff are full-time employees with defined job (that is, Working Journalists Health Scheme) and descriptions and designated reporting authorities. At the Telangana Employees Health Scheme for all the district level, the Trust directly recruits a district state government employees, pensioners, and their coordinator. All positions under the district coordinator, dependent family members. that is, the district manager, team leader, and the full- time Aarogyamitras deployed by the Trust in each Organizational Structure for PHC, called the PHC Aarogyamitra, are appointed Implementing the Insurance Scheme through outsourced human resource recruitment and payroll management agencies who are independently The AHCT is responsible for the overall management hired by each district administration through a and implementation of the scheme, including fraud bidding process. Aarogyamitras in each empaneled prevention, detection, and management. It has a hospital are called network hospital Aarogyamitras 12-member Board of Trustees headed by a chairman and are appointed by the ISA. For the organogram, (Chief Minister) with two vice chairmen (Health refer to Exhibit 4: State-level Organogram - AHCT, Minister and Principal Secretary, Health). The other Telangana for the state-level organogram and Exhibit members of the board are Principal Secretaries from 5: District-level Organogram - AHCT, Telangana for the Departments of Finance and Rural Development, the district-level organogram. directors within the Health and Medical Education Department, the director of Nizam Institute of Medical Sciences, a financial adviser nominated by the Policies and Legislations for Fraud government, and the CEO of the Trust. The CEO of Prevention, Detection, and Management the Trust, who provides policy guidance, leadership, The Aarogyasri Scheme does not have an explicit and oversight on the management of the scheme, is fraud management policy or plan. However, there an officer from the Indian Administrative Services. are detailed guidelines for pre-authorization, claims    Annex 5: Case Study: Aarogyasri Scheme, Telangana    45 processing, and other important aspects of the of India for appropriate action. However, all such scheme are available that guide all fraud prevention sanctions are limited to private providers only. and detection practices within the Trust. A good example of policy intervention to prevent abuse and Processes for Fraud Prevention, fraud is reserving 135 often abused secondary care Detection, and Management procedures only for government providers. Fraud during beneficiary enrollment is controlled by Fraud prevention, detection, and management physical verification of the beneficiary identification functions are spearheaded by the medical audit document with the BPL families’ database of the and the vigilance units within the AHCT and are Civil Supplies Department as enumerated and integrated within all the processes. Fraud prevention, photographed there. The scheme-administering detection, and management is an integral part of the agency has identification documents that are job descriptions of all key personnel at all levels across considered valid for identity recognition. In addition, the Trust and the ISA. District teams deployed by the those holding one of the listed identity documents, ISA handle all fraud management-related functions case-specific authorization and referral letter from the under the guidance and leadership of the state team. Chief Minister’s office, are also deemed as eligible for Provider contracts have reference to legal recourse receiving services under the scheme, where services for instances of fraud, though abuse and fraud is need to be availed within 10 days from the issue of not comprehensively defined. The Trust regulates the letter. Approximately 5 percent of the total providers by monitoring compliance to the provisions beneficiaries have accessed services through referral of the provider contract. Though the contract does letters from the Chief Minister’s office. Enrollment not explicitly define ‘fraud’, it lists a set of provider fraud is not a major challenge because the Aarogyasri practices such as charging money from patients, Scheme is almost universal and covers nearly 93 deficiency of service, engaging middlemen, denial percent coverage of total families (7.72 million families of service, mobilizing patients by fraudulent means, enrolled of total 8.3 million22 families in the state). and common fraudulent practices related to pre- Empanelment fraud is deterred through online authorization and claims as provider malpractices application, followed by assessment of the private that may be deemed as a breach of contract. providers. However, all public providers with minimum 50 beds are automatically empaneled. Sanctions for fraud include issue of show cause Almost 30 percent of the total claims are handled by notice, putting of payments on hold, suspension, the public providers. All interested private providers and de-empanelment and delisting of providers. who are registered with the Andhra Pradesh Financial penalties levied are up to 10 times the Allopathic Private Medical Care Establishment Act financial value under suspected fraud. All such and the corresponding act of Telangana can apply for penalties are decided by the EDC. If any empaneled empanelment. The application process is online. The provider does not pay the penalty within a specified Trust has laid down minimum empanelment criteria period, the provider is immediately delisted without based on which on-site assessment is done by the any further notice and the necessary follow-up EDC. Photographs of physical infrastructure in each remedial measures are initiated. No case has been department are taken during the inspection. The referred to the police for any criminal proceedings. EDC takes all empanelment decisions. There have been instances of proven fraud against medical personnel referred to the Medical Council 22 http://www.telangana.gov.in/about/state-profile. 46    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Beneficiary identification at the point of service is done through verification from the Civil Supplies Empaneled Hospitals (Aarogyasri Scheme) Department database using the identification number (as of May 2018) on the government-issued photo identification Total network hospitals: 327 documents. At the point of care, the beneficiary has Corporate hospitals: 232 (71%) to show any one of the 17-listed government photo Public hospitals: 95 (29%) 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 The pre-authorization process is less rigorous to verify the identity of the beneficiary. The patient’s for public providers, who have the flexibility biometrics are captured at the time of registration and to proceed with treatment even without pre- validated at the time of discharge, to ensure that the authorization approvals. Providers submit online patient who was registered received the services. pre-authorization request to the ISA. This task is coordinated by MEDCOs designated by the Mandatory pre-authorization for most procedures provider for the scheme. The ISA assesses the pre- is used for preventing and deterring fraud. authorization request and, subject to compliance The selected providers are exempted from pre- with all documentary requirements and available sum authorization of a package up to an amount of INR assured, pre-authorization is issued within 12 hours. 50,000 (US$758) for non-critical procedures and There are two additional security measures: (a) pre- INR 100,000 (US$1,515) for critical procedures. All authorization approvals that remain pending and pre-authorization requests go through four levels are not updated by the provider within 30 days are of scrutiny, which include non-medical and medical auto-cancelled by the IT system and (b) once pre- review and verification. Final pre-authorization decisions are taken by doctors who are full-time authorization is issued for a procedure, the IT system employees of the Trust. does not allow the same patient’s registration for the same procedure in any private hospital. Through ™™ Level 1: Scrutiny is non-medical (includes this process, the Trust exercises full control on all verification of patient details and identity along the pre-authorization requests to prevent any fraud. with all other non-medical documents like pre- Further, to prevent frauds related to high value authorization forms, consent, and counselling) claims, a single pre-authorization request above INR done by the network hospital Aarogyamitra. 150,000 (US$2,273) can be approved only by the ™™ Level 2: Scrutiny is again non-medical and CEO of the Trust. undertaken by the executive in the ISA. ™™ Level 3: Scrutiny covers medical review of the Claims fraud is prevented and managed through request by panel doctors/specialists (this is a four levels of scrutiny that include rigorous non- team of 50 specialists empaneled by the ISA). medical and medical verification of claims by the ™™ Level 4: A Trust doctor (this is a team of 12 full- ISA. Since post-discharge follow-up is a part of the time doctors employed by the Trust) undertakes package, providers raise claims after 10 days of a complete review of the non-medical and medical discharge. All claims are scrutinized at four levels screening done at the first and the second levels before release of payment: (a) scrutiny by Claims and takes final decisions related to approval or Executive for verification of attachments as per the rejection of request. protocol, (b) scrutiny of all the relevant medical    Annex 5: Case Study: Aarogyasri Scheme, Telangana    47 documents by specialists who are empaneled doctors, fraud. Audits are restricted only to private providers. (c) scrutiny by doctors who are employed full time All field staff along with selected state-level staff by the Trust, and (d) final scrutiny done by the Claim of the Trust and the ISA are involved in audits and Head of the ISA. Claims for special cases above INR other monitoring and verification processes. This 200,000 (US$3,030) for which the pre-authorization is coordinated by the Vigilance Department of the is issued by the CEO is approved as per the following: Trust which is headed by a general manager. Audits (a) all claims above INR 200,000 (US$3,030) and up include pre-authorization, claims, and 100 percent to INR 10,00,000 (US$15,152) are approved by a death audits. Random audits are done specialty separate committee headed by an executive officer wise and hospital wise. There is a rotation policy for of the Trust and (b) all claims above INR 10,00,000 network hospital Aarogyamitras to prevent collusion (US$15,152) are approved only by the CEO of the with providers. Trust. The existing IT platform has limited outlier- and rule-based fraud triggers. Additional Internal Control Measures The scheme does not apply any STGs for procedures. There are several demand-side measures adopted The only exception is for hemodialysis which includes to help reduce fraud. These include a structured treatment guidelines, injection administration complaints and online grievance redressal system guidelines, and clinical and non-clinical “dos and and a patient feedback mechanism. A letter from don’ts” for the network hospitals. Photo and video the Chief Minister’s office is also dispatched to the documentation of beneficiaries and evidence of pre- residence of each discharged beneficiary enquiring and post-procedures must be submitted for claims about the health status and quality of services processing. received and provides details of treatment and sum The insurer makes pre-authorized case-based assured that has been availed. The Chief Minister’s bundled payments to providers as one of the letter includes a self-addressed and postage- measures for reducing fraud because of upcoding paid letter which can be used by the beneficiaries and unnecessary billing. The tariff structure is fixed to provide feedback without any out-of-pocket by an in-house committee based on medical coded expenditure for mailing the feedback. inputs and unit prices from a standard schedule of A 24-hour call center is also available for the scheme. rates developed by the Trust. An online module is It receives more than 7,500 calls per day, most of used for calculating tariffs. The tariff is rationalized to which are related to the Aarogyasri Scheme. These include the cost of investigations for those cases that include calls related to beneficiary grievances. All do not lead to hospitalization by using outpatient- the discharged beneficiaries receive phone calls from inpatient conversion ratio. Reimbursements are based the call center seeking feedback on the quality of on predefined package rates. Payments to providers services received and problems encountered, if any. are supposed to be made within seven days of claims Beneficiaries can also complain through a GPS-based submission, provided there are no queries on the mobile app that also has details of the scheme, the claims documents submitted. However, there appear benefits package, and facility to search empaneled to be delays between three and eight months in the providers in a particular area. release of payments. Lastly, PHC Aarogyamitras play an effective role not Pre- and post-claims reimbursement audits are only in creating demand and ensuring referrals but conducted by the ISA and the AHCT to detect also for patient follow-ups post-discharge. About 20 48    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   percent of the total beneficiaries are referred by the and processes within the scheme appear robust, PHC Aarogyamitras and 45 percent attend health some of the actions that could strengthen these camps organized by the providers. efforts include the following: (a) explicit policy on fraud management, (b) STGs and mechanisms to Conclusion monitor compliance to STGs, and (c) use of advanced techniques for data mining and analytics. In addition, The Aarogyasri Scheme is one of the first such there is a need for adequate resource allocation for schemes in India and has refined and evolved its the scheme and timely allocation of funds to the processes based on experience over the last 10 Trust. years. Whereas the fraud management systems    Annex 5: Case Study: Aarogyasri Scheme, Telangana    49 Exhibit 1: Organogram - SNC, Gujarat 50    Organisation Chart of State Nodel Cell Project Director Addl. Dir (MS) Technical Advisor Asstt. Director Operations Medical Capacity Bldg Fin & Admn IT IEC Dept Mgt Dept and M&E Dept Dept Dept Dept Public Accounts Health IT IEC Ops Mgr Trg Mgr Officer Consultant Consultant Panel of Manager Medical MIS Office IT Specialists Officer Coordinator Supdt Solutions Coordinator Admn. Data Entry Provider Field IEC & ISA (QA) ISA Operators Agency for Officer Hlth Camp Coordinator Sr. Med (2) (Claims) Officer Capacity Sr Clerk coordinator Coordinator Coordinator Coordinator Building Internal (Grievances) (Hospitals) (Medical Auditor Agency for Audit) developing IEC Finance material Asstt (2) Note: Permanent posts are marked with a red border. The remaining posts are on contractual basis. Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Exhibit 2: Organogram - SHAS, Maharashtra Chief Executive Officer Deputy CEO Financial Asst. Director of General Manager General Manager State Vigilance Advisor Health Services Operations HR Officer Accounts & Insurer & TPAs Human Charity Vigilance Finance Co-ordination Resource Administrative Grievance Redressal Empanelment Officer & Feedback Chief Mecical Admin Customer Care Consultant Pre- Empanelement RTI Authorization (Non-Technical) LAQ Claims Health Camp Medical/NABH LE.C Information Audit Technology & M.I.S Sr. Manager Operations District Level Operations    Exhibit 2: Organogram - SHAS, Maharashtra    51 Exhibit 3: Organogram - Scheme - Administering Agency (TNHSP), Tamil Nadu Project Head Operations Head Chief Medical Officer Chief Vigilance Officer Support Teams Chief Medical Officer Pre-auth Medical Audit District Medical Empanelment and Claims team at PO Officers Operations Head Operations team at PO Call Centre Operations team at Field: • District Project Officer • District Co-ordinator • Insurance Co-ordinators Chief Vigilance Officer • Other Field Executives Vigilance team District Vigilance at PO Officers Support Teams Human Admin Accounts MIS IT Support Resources and Finance 52    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Exhibit 4: State-level Organogram - AHCT, Telangana Chief Executive Officer Executive Officer Executive Officer Executive Officer General Manager (Administration) (Operations) (Planning & Coordination) HR JEO JEO JEO JEO Dy. ED Dy. ED (Tech-P&C) (Tech-MA) (Tech-Emp) (Tech) (Tech) (Non-Tech) Dy. EO Dy. EO Dy. ED Dy. EO (Tech) (Non-Tech) (Tech) (Non-Tech) JEO JEO GM GM GM (FOSS & JEO (Admin & HR) (Accounts & Budget) (PMU) (104 SK) Grievance) (Vigilance Officer) Dy. EO Dy. EO Dy (NT-FOSS (Admn & HR) (NT Accts.) Dy EO Executive Network & Griev (NT-IT-NW (PMU) Administrator & PMU Dy. EO (Legal) Legend: Admin Administration Dy. Deputy Emp Empanelment EO Executive officer FOSS Field operations support services GM General manager HR Human resource IT Information technology JEO Joint executive officer NT Non-technical P&C Planning and coordination PMU Project management unit Tech Technical        53 Exhibit 5: District-level Organogram - AHCT, Telangana Trust State Team District Coordinator District Manager Team Leader Network Hospital PHC Aarogyamitra Aarogyamitra 54    Anti-Fraud Efforts in Government-Sponsored Health Insurance Schemes in Four Indian States   Notes Notes