Dr. Bhabatosh Mishra
Director – Claims, Underwriting & Product

Niva Bupa Health Insurance Company Limited

Overview:

In the complex landscape of the insurance industry, where trust and ethical conduct are paramount, any hint of impropriety can have far-reaching consequences. Recently, we've observed instances within our industry where there are concerns about bribery and unethical practices related to hospital empanelment by employees/third parties with the intention to gain undue amount. We believe it's crucial to address this issue and emphasize our commitment to fair and responsible business practices. Bribery, especially in the context of empanelment, raises serious legal and ethical concerns. It not only jeopardizes the individual involved but also places the entire organization in a precarious position.

In the convoluted landscape of healthcare, the distinction between in-network and out of network hospitals plays a pivotal role in shaping customer’s perspectives and decisions.  There are many crucial factors associated with the network status of hospitals which influences customers seeking healthcare services. Few of the factors are listed below:

• Financial Considerations
• Agreement between the Company and the Hospitals
• Quality of care concerns
• Access and convenience

Empanelment of hospitals in insurance networks is a crucial process that determines which healthcare facilities are included in an insurer's coverage. Unfortunately, some hospitals resort to offering bribes to insurance decision-makers to secure a spot on these coveted networks. This not only raises ethical concerns but also has severe consequences for both the healthcare system and the insured individuals.

Case background and Investigation Summary:

Few instances came into light to the Company where it was suspected that employees were involved in such empanelment of hospitals to gain undue benefits. The issue was investigated by fraud & risk control team.

The Investigation team formed a specialized team comprising individuals with expertise in compliance, legal matters, and auditing. The team was responsible for leading and executing the investigation. The scope of the investigation was clearly outlined, specifying the areas and processes to be examined. Establishing precise objectives to guide the team and to ensure a focused inquiry. The next step taken by the team was to immediately secure all relevant documentation, including contracts, emails, and financial records related to the hospital empanelment. The team ensured the preservation of evidence is thorough and complies with legal standards.

Further to this the investigation team conducted on ground investigation and interviewed the employees involved in the empanelment process to gather insights, identify potential irregularities, and gain a comprehensive understanding of the situation. Post this the team scrutinized the financial transactions and records associated with hospital empanelment to detect any anomalies or suspicious payments on the basis of discussion happened with the employees. This step involves a detailed analysis of financial data to uncover potential improprieties.

On the basis of above investigation the investigation team was able to unfold that employees/third parties were involved in taking hefty amount for empanelment of hospitals. The hospital owners were told that the procedure includes taking certain amount while empanelment of hospitals. The investigation revealed that the employee/third party created and ran the nexus of Hospital empanelment with more than 6-8 members wherein they were charging 30 thousand to 1 lakh to empanel the hospital for which company staffs were also involved to clear all the blocks.

It was further revealed that intentional greed and remissness on the part of an employee/third party contributed to such a misconduct. The intention proven was to gain undue amount by the virtue of empanelment of hospitals.

Action taken

Post gathering all the facts and circumstances of the case with proper evidences the team represented this case in front of the concerned internal committee. Post discussions and seeing the evidences the committee decided to terminate employees who were involved in this matter and put the hospitals in the red flag list of the Company.

Process improvement

Certain preventive measures were also recommended by the committee and implemented with immediate effect –

• Review and Strengthen Internal controls: Identify gaps in existing internal controls that allowed the bribery to occur. Strengthen these controls to prevent future instances, including stricter approval processes and enhanced oversight.
• Reevaluate Vendor Selection Criteria: Review and update the criteria for hospital empanelment, placing a stronger emphasis on transparency, ethical behavior, and compliance with anti-bribery measures.
• Enhance Due Diligence Procedures: Revise due diligence procedures for hospitals seeking empanelment, conducting more comprehensive background checks on key personnel and financial practices.
• Implement Whistleblower Protection: Enhance and promote a robust whistleblower protection program to encourage employees to report unethical behavior without fear of retaliation.
• Implement Technology Solutions: Utilize advanced technologies, such as block chain or audit software, to create transparent and traceable records of empanelment processes, reducing the likelihood of bribery going undetected.
• Provide Ethical Training: Conduct mandatory ethics training for employees involved in vendor management, emphasizing the importance of integrity and compliance with anti-bribery policies.
• Enhance Compliance Monitoring: Establish a more rigorous and proactive compliance monitoring system to regularly assess and ensure adherence to anti-bribery policies throughout the empanelment process.
• Leverage Data Analytics: Utilize data Analytics tools to identify unusual patterns or anomalies in financial transactions, helping to flag potential bribery or irregularities during empanelment process.
• Collaborate with Industry Peers: Collaborate with other health insurance companies and industry associations to share best practices, experiences, and strategies for preventing bribery in empanelment processes.
• Legal Consequences: Cooperate with legal authorities to ensure appropriate legal actions are taken against those involved in bribery, sending a strong message about the company's commitment to ethical practices.

Conclusion

The revelation of bribery scandals further erodes the trust that individuals place in both hospitals and insurance providers. Bribery undermines these expectations, casting a shadow of doubt over the entire healthcare and insurance ecosystem.

Governments and regulatory bodies are increasingly recognizing the need to address bribery within the insurance industry. Stringent legal measures are being implemented to curb these unethical practices, with severe penalties for those found guilty. Hospitals involved in bribery for empanelment risk not only their reputation but also legal consequences that can have far-reaching implications.

Stricter regulations, ethical awareness campaigns, and transparency in decision-making processes are essential to restore trust and ensure that the healthcare system operates with the utmost integrity, prioritizing the well-being of patients over financial gains.