Health Insurance Fraud Growing in Low and Mid-Value Claims?

Health insurers in India are witnessing a sharp increase in fraudulent activity, especially in small and mid-value claims. 

A report by Medi Assist and BCG highlights that fraud risk is highest in claims below ₹50,000 and in the ₹50,000–₹2.5 lakh range, where monitoring is lighter and loopholes are more easily exploited.

Fraud Rising in Low-Ticket Claims

Insurers note that claims under ₹50,000 have silently become a significant fraud hotspot. These claims generally pass with minimal paperwork and fewer verification layers, creating scope for inflated consumables, billing for services not provided, or multiple small claims that evade detection. Fraud in this segment has steadily increased over the last three years.

Mid-Value Claims Pose Higher Risk

The report finds that claims between ₹50,000 and ₹2.5 lakh carry the highest fraud propensity. This range offers enough financial incentive for manipulation while still operating under moderate scrutiny.

Many routine procedures fall within this band, making it easier to inflate bills, alter codes, or add unnecessary tests without triggering stringent checks. Claims above ₹2.5 lakh require pre-authorisation and extensive documentation, reducing manipulation opportunities.

Impact on Insurers and Policyholders

Industry estimates show that 8–10% of total claim payouts are lost annually to fraud, waste, and abuse, amounting to ₹8,000–₹10,000 crore in leakages. These losses directly affect insurer profitability and contribute to higher premiums for customers. Behavioural factors also play a role, with small-ticket fraud often perceived as insignificant, enabling misuse across the healthcare ecosystem.

Higher Misuse in Infectious Disease Claims

The study indicates that claims linked to infectious diseases show disproportionately high fraud risk. Their generic symptoms, extensive testing, and difficulty in verifying actual treatment make them more prone to misuse.

Meanwhile, surgical claims carry lower fraud risk due to mandatory approvals, involvement of multiple specialists, and detailed documentation.

Also Read: October Insurance Data Reflects Mixed Trends!

Conclusion

The report underscores the need for fraud detection systems, improved analytics, and stricter claim verification, particularly for low and mid-value claims. Strengthening these checks is essential to reduce leakages and help maintain fair premium levels for policyholders.

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