Insurance Claim Rejection in the Middle East
The rejection of insurance claims is quite rampant in the Middle East. Private health insurance is necessary for the millions of the expatriates who live in the Middle East. In the UAE, there is no comprehensive data on the rejection of claims. This study seeks to determine the prevalence of the rejection of health insurance claims in the UAE. This will be done by obtaining data from the health information management system at the hospital where the researcher works as a hospital manager. Data will also be obtained from the e-claim system. The data that will be obtained will be used to generate graphs. The analysis of the data will involve comparing the rejection rates among the various insurance companies as well as the rejection rates in 2012 and 2013. The findings of this study will provide a basis for further research into the prevalence of the rejection of claims in the rest of the Middle Eastern countries.
The Middle Eastern countries have had a renewed interest in providing health care services to its citizens over the last 20 years. Health care insurance is the responsibility of the government in most of the countries in Middle East. There are huge disparities in the health care sector in the Middle East countries which are attributed to the economic inequalities. There are countries that are rich in oil hence they have devoted sufficient resources to the development of government funded health insurance for all the citizens. These countries include Saudi Arabia, Jordan, Oman, Qatar and Bahrain. These countries also boast of a considerable expatriate population. The percentage of the population that is comprised of expatriates in these countries is as follows: UAE 71.4%, Kuwait 68.8%, Bahrain 40.7%, Oman 24.4%. In the UAE, the expatriates are expected to pay for the health care services. Health care services in the UAE are funded by the government. Native citizens do not pay for these services. Bahrain and Kuwait have a cost sharing model for the expatriates. The natives can access the services for free.
Most of the countries in the Middle East partner with private health insurance companies in their efforts to provide their citizens with adequate health care services. Most of the consumers of the services of the private health insurance are expatriates. Currently, the United Arab Emirates has come up with a law that requires all citizens; native and naturalized, to acquire medical insurance. The law will be implemented over the next two years. Qatar has already began the implementation of a law which states that all citizens must have medical insurance. Lebanon has a national health plan which is funded by the government in conjunction with private health insurance companies. Throughout the region, there are reports of insurance claim rejection. The lack of proper reporting systems has made data about the prevalence of insurance claim rejection scarce. This proposal delves into insurance claim rejection in the region by examining the utilization of private health insurance services in the region, the prevalence of claim rejection and causes of insurance claim rejection.
In the Middle East, reports of rejection of insurance claims are quite rampant. The exact extent of the prevalence of the rejection of claims in the Middle East is not known. The effects of the rejection of claims vary. Some of the reasons that lead to the rejection of health insurance claims include: lack of proper documentation, late submission of claims, exhaustion of the cover limit and fraudulent activities such as phantom billing and double billing. The United Arab Emirates is home to thousands of expatriates who rely on health insurance companies to pay for their health care. There are reports of rejection of claims but there is a scarcity of data about the same. Therefore, this study seeks to provide statistics about the rejection of health insurance claims in the country.
Health care in the Middle East
The financing of health care services in a country can be done through different methods. These methods include: social insurance, out of pocket payments and national health care funds. The countries in the Middle East have adopted one or two of the aforementioned methods to cater for the needs of their citizens.
In Saudi Arabia, Article 31 of the constitution stipulates the need for the government to provide health care services for all its citizens. Under the auspices of the Ministry of Health, all citizens receive free medical services. 60% of the medical services in the country are provided by the government, 20% of the services are provided by agencies that are affiliated with the government while 20% are provided by private entities. The Ministry of Health has an elaborate national framework comprising of hospitals and clinics that are located in different parts of the country. The staff, the medical equipment, the drugs and the services provided at these hospitals are a product of government funding.
In addition to this, the government also allocates money to the Ministry of Education, the Ministry of Defense and the Saudi National Guard which is used for the provision of health care services. These agencies have their own health care facilities. They also recruit their own medical personnel. Citizens can also access medical services at privately owned facilities at a fee. It is the rapid growth of the private sector that has resulted in a corresponding need for health insurance in Saudi Arabia. In Lebanon, the provision of health care services is fragmented and unregulated. The Ministry of Health bears the bulk of the health care burden as the main planner, regulator, supervisor and evaluator of the health care system. Private insurance companies expanded their reach in Lebanon following years of political instability which resulted in war casualties and frequent outbreaks. They offered an alternative to financially stable citizens. The government’s strategy for providing health care services is unclear. It used to provide free medical care for war casualties and uninsured patients in private hospitals. However, in some cases, the patients have to enter into a cost sharing arrangement with the government.
In Oman, health care is delivered by the government and the private sector. The health care system in Oman is regarded as one of the best health care models in the world. Omani citizens can access health care services at government funded hospitals for free. Expatriates have to pay for the services through their insurance companies or in cash. The cost of consulting a doctor in Oman is one of the most affordable in the region. For instance, delivering a baby at a hospital in Omani costs $ 2,080. In Kuwait, it costs $ 2475 while Saudi Arabians pay up to $ 7700. The health insurance companies are subject to regulations that have been put in place by the government. Qatar unveiled a universal health insurance plan that made it mandatory for all its native citizens, expatriates and tourists to obtain health insurance. The ambitious plan is set to shift the burden of providing health care services from the government to the private insurance companies. The country boasts of a large number of expatriates with the expatriates outnumbering the natives by a ratio of six to one. This is expected to provide a boom for the private health insurance companies as they insure expatriates. Prior to the unveiling of this plan, it was estimated that only 10-20% of the citizens of Qatar were insured. Following the implementation of the plan, the number of citizens who are insured is expected to rise drastically with some companies reporting an increase of 30 to 40% in the number of patients that they insure.
UAE has adopted a similar plan hence an unprecedented spike in the number of people utilizing private health insurance is expected. In a strategic plan that was unveiled by the Dubai Health Authority, the government requires all citizens to have basic health insurance by the year 2016. The first phase of the plan was implemented in 2014. It is expected to improve access to health care services among the expatriates who form the bulk of the workforce in the country. Estimates indicate that only 5% of the population in Jordan have access to private health insurance services. The private health insurance have been slow to offer services that have a competitive edge over the services that are available through the social services scheme. Statistics from Iran offer conflicting data about the number of individuals who have access to private health insurance. It is estimated that about 91% of the people in Iran have access to insurance services but other reports indicate that only 70% of the Iranians have access to insurance. This is partly attributed to the fact that most of the Iranians have multiple forms of insurance. This may be an indication of the inefficiency of some of the insurance companies.
The private health insurance firms in the Middle East provide different benefits’ packages to their clients. There are basic plans which are named differently by the insurers but the most common names are C plan and Balsam Direct. There are packages that offer clients access to all types of health care facilities from health care centers to high end medical facilities. With each plan comes specific medical facilities, doctors and services. Individuals who have basic health insurance plans have access to medical facilities that offer low quality of services. Those who have access to elite plans have access to high quality medical services. However, it is possible for a patient with a basic plan to get a referral to a hospital with better services whenever the need arises.
Regulation of private health insurance companies in the Middle East
One of the reasons behind the rejection of insurance claims in the Middle East is the lack of a proper regulatory framework. The fragmentation of health care in the region has compounded the problem since in some cases, roles are duplicated while oversight is neglected. For instance, in Saudi Arabia the Ministry of Health is the main planner and supervisor of health care service provision. The Ministry of Education, the Saudi National Guard and the Ministry of Defense also get their own budgets to provide health care services to their citizens. The co-ordination among these ministries is hampered by bureaucracy and unnecessary laws. The situation is replicated in Jordan where the Ministry of Industry and Trade which is responsible for the regulation of private health insurance companies is somehow detached from the Ministry of Health which is in charge of the provision of health care to all the citizens of Jordan. Lebanon’s government has assigned each branch of the insurance industry to a specific supervising government branch. In all these instances, sharing of information and attainment of the strategic goals has been complicated by the lack of co-ordination. The loopholes brought about by the poor co-ordination are exploited by the private health insurance companies to their advantage. The duplication of insurance coverage evident in Jordan and Iran can be avoided by having clearly spelt out responsibilities of each supervising branch. The branches that are in charge of supervising the health insurers ought to report to one ministry; the Ministry of Health because it has the capacity to put quality control measures in place as it works towards ensuring that all the citizens have access to high quality medical services.
The regulatory framework in the United Arab Emirates is much better than that of most of the countries in the Middle East. The Dubai Health Authority is one of the regulators in the healthcare sector. Earlier this year, the authority introduced a policy that put a cap on price increments in medical facilities. According to the policy, hospitals have to notify the authority before increasing the price of any of their services. The price increment can only be in line with the inflation rates in the country. Compliance with the new law will determine whether an insurance company will accept or reject an insurance claim. The insured parties are not under any obligation to pay for claims that have not been approved by the authority. It is expected that the authority will also start regulating the increments in insurance premiums from 2016.
The lack of oversight has also led to the poor allocation of resources in some of the countries in Middle East that rely on private health insurance companies to help in meeting the cost of health care in the country. For instance, the reimbursement policies in Lebanon have been overexploited by fraudulent insurance companies which leads to higher expenditure on health care by the government. In addition to this, most private health insurance companies have channeled their resources towards the provision of curative services. This is because curative care is considered more profitable. On the other hand, preventive care which would be more beneficial in terms of addressing the underlying causes of ailments remains largely ignored. The focus on curative care does not necessarily correspond to the needs of the citizens of Lebanon. Fraudulent practices such as cream skimming, premium and cost escalation are quite common. The oversupply of insurance coverage services in Middle East could be one of the reasons behind the uneven cost distribution in health care.
Reasons for the rejection of health insurance claims
The reasons behind the rejection of health insurance claims in the Middle East are similar to the reasons behind rejection of health insurance claims in other continents. To begin with, insurance claims are rejected due to delays in relaying information about medical emergencies. This could be as a result of the lack of the information about the importance of informing the insurer about any medical emergencies encountered. Secondly, filing a claim for a disease that is not covered by a policy could lead to the rejection of a claim. Most insured individuals do not read the fine print of the insurance policy that they are purchasing. Sometimes, individuals fail to declare if they have any preexisting conditions while signing up for an insurance policy. An insurance company is not obliged to provide cover for conditions that were not declared by the patient at the time of the activation of the insurance policy.
There are concerns that have been raised in the past about the shrewdness of insurance companies regarding certain disease conditions. Cases have been reported in the UAE in which a patient suffering from a terminal illness was initially informed that his or her condition was covered by her policy. As the treatment for the condition progresses, the patient is informed that certain procedures and tests are not covered by the insurance company.
An insurance firm has the right to reject a claim upon the discovery of malafide intentions. For instance, incidents have been reported in which patients collude with doctors and pharmacists to inflate the cost of medical services that they have been accorded. Once the claim has been settled, the patients and the medical professionals split the profits. In 2010, the Health Authority in Abu Dhabi prosecuted 39 patients, doctors and nurses over the filing of fraudulent claims. The accused were charged for a range of offenses which included: claiming reimbursement for medical services that were not offered and using fake insurance cards. Saudi Arabian paper, Al Hayat reports that insurers in the country lose $ 320 million to fraudulent activities. Daman, one of the top insurance firms in the Middle East reported that it had recovered $ 1.6 million following the completion of investigations into fraudulent medical claims.
There are several well-known fraudulent techniques that have been identified in the Middle East as well as other parts of the world. Phantom billing is one of the most common forms of insurance fraud. This entails billing for services that were never provided. For instance, a claim could be filed for a test that was never conducted. Over utilization is a form of insurance fraud in which a medical facility over steps their authority to treat their patient. A doctor can recommend a long and unnecessary stay for a patient or prescribe an overdose. Duplicate billing is also quite common. A facility could charge for the interpretation of the results of an ultra sound in spite the fact that the laboratory technician has already issued a bill for the ultra sound. In some cases, the medical professionals could fragment a procedure and charge for the constituents. For instance, during a by-pass surgery, the facility may decide to charge for the harvesting of a vein that will be used during the by-pass surgery. There are also instances in which services are upgraded to more complex procedures. A routine blood sugar test could be billed as a renal function test.
An insurance firm could also fail to settle a claim if the paper work was irregularly filed. The lack of properly stamped receipts, missing fiscal documents, forged medical records are just some of the irregularities encountered with regard to documentation. If the claimant of an insurance policy has exhausted his cover, the insurance company could reject the claim. In the case of a family cover, exhaustion of the family cover by one member of the family could lead to the rejection of the claims that have been filed by the rest of the family members.
The current research was based on the case study research methodology. According to Yin (2003), a case study is a research approach that allows a phenomenon to be explored within its context and via a mixed array of sources of data hence making it possible for the researcher to approach the phenomenon under study through several angles and perspectives. Case studies therefore are pertinent in the simplifying complex phenomenon through their deconstruction and reconstruction. This research approach was most ideal in health science research because of its ability to develop theory from limited amounts of data. The current study being a health science research sought to explore the prevalence of the rejection of insurance claims in the Middle East region, the case study approach of research was appropriate for the following reasons:
First, the focus of the current study was to answer the how and why questions “why.” The study sought to determine why there’s a high rate of the rejection of medical insurance claims in the Middle East and the causal factors of this phenomenon. Secondly, the current research being a contextual and social study made it impossible for the researcher to manipulate the behaviour of his research population. It is virtually impossible for the researcher to deconstruct and reconstruct the phenomenon of medical insurance claims in the Middle East in a controlled experiment. Finally, the case study approach was the most appropriate method for exploring the phenomenon under research for contextual purposes. For the findings of this study to be imperative to be valid and for the theory resulting from the same to representative of the situation on the ground, it was necessary for the researcher to explore rejection of medical insurance claims in the specific countries that constitute the Middle East as a region.
The philosophical underpinnings of the current study were grounded in the constructivism. Yin (2003) asserts that constructivists are of the opinion that the truth is relative and therefore to a large extent is shaped by an individual perspective. Constructivism as a research philosophy therefore mostly stresses the importance of human subjectivism in studying their environment. This however does not imply that constructivism is totally devoid of the notion of objectivism far from that constructivist have a come up with a rigorous data to validate their findings. This research philosophy was preferred in this study because it allowed for close collaboration and interaction between the researcher and participants enabling the phenomenon under study to be explored in a real setting.
- How prevalent is the rejection of insurance claims in the Middle East?
- What are the causal factors for the rejection of medical insurance claims in the Middle East?
- Hypothesis (H1): Rejection of medical insurance claims in the Middle East is high
- Hypothesis (H0): Rejection of medical insurance claims in the Middle East is not high
According to Miles and Huberman (1994), a conceptual framework is extremely important in the case study approach of study and serves to achieve the following purposes. To begin with, the conceptual framework determines the research population therefore delimiting who will and who will not be included in the research. Secondly, this framework also serves to bring to the fore the relationships the researcher has predetermined between various phenomena as a result of their logic, experience or body of literature they have been exposed to with regards to the subject matter under observation. Finally, the conceptual framework is also pertinent in helping the research put together all the paradigms about their study. It is therefore clear that a conceptual framework is extremely significant especially as far as data analysis and interpretation.
The current study will be based on the conceptual framework outlined and it was shaped to a great extent by the available body of literature with regards to the medical insurance industry in the Middle East and the researcher’s personal experience.
Data Collection Techniques
According to Yin (2003), a case study approach normally relies on a combination of data collection methods such us interviews, observation, archives and questionnaires. To this effect, the triangulated approach of data collection adopted by case studies serves to provide stronger substantiation for theory and paradigm postulations. Yin (2003) is quick to note that the choice of data collection techniques a researcher resorts to is determined by limitations in access to the data, time and financial resources. The researcher used the health information system and e-claims system at the hospital as a source of data. The number of claims filed and the number of claims rejected was obtained from the system. The monthly rates of rejection in 2012 and 2013 were obtained and used for comparative purposes. Bar graphs were generated from the data that obtained. A focus group discussion with representatives from the insurance companies was carried out to determine the reasons behind the rejection of claims in the hospital.
Following the analysis of the data that was obtained from the hospital’s information management system, it was evident that the rate of rejection of claims in 2012 was lower than in 2013. In 2012, the percentage of insurance claims that were rejected was 9.86% while in 2013, it was 21.37%.A comparative analysis of the rejection rates among different insurance companies reflected the higher rejection rates in 2013. This is reflected in the graph below. For instance, the rejection rate in January 2012 was 18.3%. The rejection rate in January 2013 was 23.91%. The same trend is repeated in the rest of the months.
In 2012, the highest rate of rejection claims was 12.2% which was in May. In 2013, the highest rate of rejection claims was 40.33% which was December. The month with the lowest rejection rate in 2012 was 6.77% while 2013, it was 1.76%.
The results indicate the percentage of claims rejected was higher in 2013 than in 2014. During a focus group discussion, the insurers cited is the lack of accurate information as one of the reasons for the rejection of claims. This could be attributed to the fact that most of the consumers of the insurance services in the UAE are expatriates hence they are not familiar with the inner workings of the insurance industry in the UAE.
The higher rates in 2013 were also attributed to the errors committed by medical professionals while filing in the claim forms. Each insurance company requires the medical staff at hospitals to fill in forms by writing the appropriate code for each medical procedure. This includes diagnostic procedures and prescriptions. Some insurance companies use alpha numeric codes while some insurance companies use standard, non-legacy codes. The mistakes made by hospital staff are attributed to the fact that sometimes, they encounter difficulties in deciphering the insurance codes. Late submission of codes and failure to adhere to policy limits are also responsible for the rejection of claims. Insurance companies in the UAE and every other place in the Middle East can only accept claims that are filed within a specific timeline. Claims that are filed after the stipulated time are subject to review and prone to rejection. Whenever a patient exceeds their insurance limit, the insurance company is under no obligation to process the claim.
The hospital can reduce the number of claims that are rejected by undertaking the following steps: the hospital must develop a denial management system that will enable it to deal with the denial of claims efficiently. This system should be geared towards ensuring that the claim is paid. A five step process can be initiated to speed up the resolution process. The first step is to ensure that there is an office that deals with denied claims. Account representatives should be appointed to handle different insurance companies and ensure that they get them to pay for claims that have been rejected. The executives should obtain all the relevant information from the client and insurance company before they begin the process. This will eliminate an unnecessary buildup of correspondence that may be a result of the lack of correct information. Hospitals must work towards ensuring that they are minimizing the number of claims rejected by conducting regular training workshops. During the training sessions, hospital staff should be encouraged to share the problems they have encountered while dealing with the different insurance companies.
In 2013, the percentage of claims that were rejected was 21.37%. This is quite high hence the need to implement the aforementioned recommendations to reduce the number of rejected claims at the hospital. Due to time and financial constraints, the researcher was only able to obtain data from one hospital. Future studies should focus on more hospitals.
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