Keoghs Insight


Healthcare-enabled fraud

Fraud Aware Issue 4

Following the Jackson reforms, and even more so over the last 12 months, healthcare costs on claims have significantly increased. Are there really more claimants that need medical treatment or is healthcare simply the latest way to inflate costs? Keoghs’ healthcare fraud function has undertaken a large number of investigations into medical professionals on behalf of insurers. This type of specialist validation has uncovered a number of scenarios that have seen doctors, physiotherapists and psychologists/CBT practitioners right at the very heart of fraud.

Director of Healthcare Fraud, Simon Winnard, discusses.

As a professional enabler to committing fraud on motor, disease and liability claims, medical professionals can be the victim, a complicit party or the perpetrator of claims fraud. So what are we seeing?

Stolen Medical Reports

Keoghs has uncovered a large number of cases where medical reports have been produced in doctors’ names without their knowledge or consent. This form of identity theft appears to be widespread across the industry but how can this happen so easily? Doctors themselves find it remarkable that an electronic signature is accepted on medical reports (this is the only area of clinical practice where this is deemed acceptable). This “copy and paste” culture along with the electronic production of medical reports provides the perfect opportunity for the fraudster.

Example 1

We recently interviewed one doctor and presented him with three medical reports in his name; all three had different claimant firms, different medical agencies and had been presented to three separate insurers. The doctor had not produced any of them. Does the fact that these reports came from entirely separate sources suggest that templates are being used almost as shareware amongst fraudsters?

Complicity and falsely produced medicals

In some cases doctors are simply complicit in the production of false medical reports; whether by them or a third party.

Example 2

A referral was received from Insurer A to investigate a doctor in respect of medical reporting he had carried out for a number of staged accidents and false claims.

Whilst there were several other doctors implicated, we worked alongside the insurer to develop an investigation strategy and decided to interview one specific doctor who was a GP Partner in a small practice. During the interview, whilst claiming that he had carried out the medical examinations, it became evident that the doctor was potentially mass producing medical reports for examinations that had not taken place at all.

After a joint presentation by Keoghs and the insurer, the case was successfully referred to the Police who have already arrested a number of parties on the claims and are due to arrest two doctors in the coming weeks. Keoghs will be assisting the Police with the criminal interviews.

The Perpetrator

Doctors like anybody else can be the ones orchestrating the fraud.

Example 3

A referral was received from Insurer B to investigate a doctor and his potential links to the production of false physiotherapy invoices. Following our initial investigations a referral was made to the Police who proceeded to investigate the matter criminally.

Due to our extensive healthcare investigation experience, we were asked to help interview the doctor. Following his arrest, the doctor was interviewed under caution and is currently on bail pending further enquiries.

MOJ reforms - MedCo

Undoubtedly, regulation of doctors in this industry has got to be a step in the right direction. Minimum qualifications, peer review and a centralised referral system all make sense in terms of trying to improve the quality of medical reporting. It is of course a massive challenge and undoubtedly the first step on what will be an arduous and challenging journey. So as we approach this brave new world, how are doctors reacting to these changes?

Since 2009, in order to treat patients all doctors in the UK must be registered with the General Medical Council (GMC) and hold a license to practise. To retain that license, doctors have to undertake a process of revalidation every five years. Revalidation started in December 2012 and the majority of licensed doctors are expected to have been through the process by this time next year. Revalidation requires doctors to evidence and receive feedback on their continued professional development and ensures they are up to speed with clinical practise.

However, the current MoJ definition of an expert states only that they must be GMC registered. As a result, we are seeing a number of doctors who work solely in this industry making the decision to relinquish their license to practise. This means that they are not allowed to actually treat patients but are still able to provide

medical opinion (including carrying out a medico-legal assessment) but does this constitute a definition of an “expert”?

Another trend we are seeing is that single experts are re-branding as medical agencies and claiming to have a network of doctors providing national coverage. As the new MedCo process offers multiple choice of experts/agencies by postcode, is this just one of many ways that the market is already trying to circumnavigate the new referral process?

It often surprises people that doctors only receive, on average, between £50 - £75 for each medico-legal assessment/report. Therefore, reducing the fees for RTA medical reports to £180 drives obvious cost and margin for the billing medical agencies/claimant firms out of the core process. However, this also means the fraudsters have to get more creative. If, as we believe, there are medical agencies out there that produce only fraudulent medical reports, this means they will now have to create three times as many medical reports to generate the same amount of revenue…or get more creative!

Balloon squeezing – rehabilitation and beyond

Doctors are the professional enabler whose referral opens up the way for medical treatment costs. Over the last year the number of claims for physiotherapy across the industry have risen sharply, with some insurers reporting as much as a 40% increase. In addition to this, the cost of physiotherapy treatment has exploded with costs sometimes reaching £2,500 per treatment course. Similarly, there has been an even larger increase in claims and fees for cognitive behavioural therapy (CBT).

So are more people requiring medical treatment for injuries all of a sudden? Having worked with a number of insurers to help them validate and challenge this treatment, all are having success in reducing these costs from claims. Some insurers are reporting a 50% reduction in treatment costs across their book of business.

Whilst clearly a big problem in motor insurance, this type of healthcare enabled fraud is appearing in other areas such as liability and disease. It would of course be naïve of us to think that fraudsters will stick to one insurance type, and as the squeeze increases on the motor side, inevitably we will see them diversify.