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Now Health International Clients in the Middle East see Higher Premiums After February Adjustments.

Posted on Feb 04, 2013 by Sergio Ulloa ()

Now Health International's semi-annual premiums adjustment was made on the 1st of February this year and resulted in an increase of either 5% or 6% for the majority of the countries the insurer works with. Premiums for clients based in certain Middle Eastern countries however, (namely Bahrain, Oman, Qatar and The United Arab Emirates) will see an increase of 8%. With a second increase due in August this year, if the rate of medical inflation in these Middle Eastern countries remains the same, it is possible that an annual increase of 16% could occur, resulting in a much higher figure than last years average of around 10% across the board of other insurers.

While the rest of the global average increase looks likely to only see an increase of 10% or 12%, the rising cost for medical treatment in the Middle East shows little sign of slowing as the area quickly and robustly rebuilds from the Global Financial Crisis that had such a big impact on the area in 2009 and 2010.

One reason for the higher costs for premiums in the Middle East is the inclination towards fraud in this area. Though insurance fraud has been stated as a victim-less crime in the past, ultimately the cost of this is shouldered by the paying clients. While only acted upon by a small percentage of patients or facilities, the loss from fraudulent claims is quite considerable as in 2009, the Saudi Arabian Newspaper Al-Hayat reported that an estimated $320 Million US Dollars was lost to fraudulent claims on an annual basis.

The fraudulent activity can actually be perpetrated by the both facilities and the paying clients alike. In January 2010, 39 doctors and patients were taken to court by the Abu Dhabi Health Authority (HAAD) for involvement in fraudulent insurance scams. There are 5 main categories of insurance fraud that can be done by the medical facilities:

Up Coding - When the charges for treatment are higher than what was actually performed. For example, a patient could just go for a basic consultation, though the facility will charge the insurer for actual curative treatment.

Unbundling - Unnecessary extra charging for a specific part of a surgical procedure, where that superfluous fee should have been covered by the total cost for the surgery anyway.

Duplicate Billing - Charging the insurer twice for the exact same treatment, though giving it a different name or motive to attempt to proceed undetected and gain reimbursement.

Over utilization - When the insurer provides more treatment than is actually necessary for the client, such as extended hospital stays  or prescribing drugs that are not specifically needed.

Phantom billing - Charging the insurer for treatment that never actually happened.

However, the facilities are not the only ones trying to milk the system. Patients themselves can try to commit fraud by one of two main methods, either using a fake card, or claiming for treatment they should not be covered for. Fake cards can actually be produced, though more often than not an insured member will give their card to someone who is not insured and commit identity fraud. Often clients on a medically underwritten plan will not disclose their full medical history and will claim for treatment that should rightly have been excluded by the insurer.

Nevertheless, it is not only fraudulent claims causing the increase in premiums in the Middle East region. The general boom of industry in the area has lead to an increasing amount of expatriates, as well a an ever growing amount of high net worth local nationals, resulting in an increasing demand for hospitals that will provide treatment at a western standard, meaning high costs for treatment.

A prime example of this is the recent opening of the Saudi German Hospital (SGH) branch in Dubaion the 19th of March 2012, being the 7th instalment, along with locations in Aseer, Hail, Jeddah, Madinah, Riyad and Sanaa, and the second instalment outside ofSaudi Arabia. The SGH group was established in 1988 and aims specifically to provide treatment that would equal the German healthcare standards. Easily considered one of the most expensive hospitals in theMiddle East, this expanding group of high end medical providers has expanded to match the increasing demand for such high levels of treatment
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