Addressing Four Types of Insurance Fraud and Profiteering

The Vietnam Social Security (VSS) recently issued Official Dispatch 2853/BHXH-TTKT to the Ministry of Labor, Invalids and Social Affairs, the Ministry of Health, and People’s Committees of provinces and cities. The dispatch aims to intensify leadership in the enforcement of laws and prevention of insurance fraud and profiteering.

To limit acts of defrauding and profiteering from social insurance, unemployment insurance, and health insurance funds, VSS has directed social security agencies of provinces and cities to actively and drastically adopt solutions to prevent, detect, and stop any act breaching laws on social insurance, unemployment insurance and health insurance.

Many violations have been promptly detected and handled. VSS has resolved or compiled many issues, reported them, and proposed them to competent agencies for consideration and resolution. Recently, social security agencies and relevant authorities have unearthed and handled many violations in social insurance, unemployment insurance and health insurance in some localities.

Profiteering from sickness and maternity funds

Some cases of abuse of the social insurance fund involve workers obtaining social insurance benefits by using forged or improperly issued social insurance retirement certificates or medical documents. Some medical facilities also misuse the health insurance fund by charging fees for examinations, medicines and technical services using the health insurance cards of the insured. Some of the violators that have been prosecuted or investigated include private polyclinics in Dong Nai and Dong Van Medical Station in Duy Tien Town, Ha Nam Province.

To exploit the social insurance fund, some workers receive sickness, maternity or health recovery benefits while engaging in paid work, taking vacations, enjoying unpaid leave, taking personal leave, or undergoing treatment for occupational injuries. In some cases, employers and employees collude to pay only six months of social insurance or inflate social insurance premiums to abnormally high levels in the six months before maternity leaves to obtain higher maternity allowances.

Exploiting lump-sum social insurance benefits through authorization

Some entities exploit workers’ urgent needs for one-time early social insurance benefits and the lax regulations governing these benefits. They acquire workers’ social insurance policies through pledges and authorizations. In this practice, workers with social insurance policies grant written authorizations to others to claim one-time social insurance benefits on their behalf. This act constitutes a trade of social insurance policies. It not only deprives workers of their rightful benefits by paying them only a fraction of the actual value of their policies, but also imposes long-term strain on the social security system.

Exploiting unemployment insurance funds

While receiving unemployment benefits, some workers find new jobs (signing official labor contracts with employers) but fail to declare this information to the Employment Introduction Center. After their unemployment benefit period expires, they submit applications requesting social security agencies to collect compulsory social insurance premiums for this period.

Exploiting health insurance funds

Medical staff use health insurance cards of their family members or get card codes from insured patients who previously visited hospitals to prepare insurance claim documents or collude with intermediaries to create falsified medical records to take life insurance and health insurance benefits (as seen in Thai An Hospital and Vinh Medical University Hospital, Nghe An province).

Additionally, other forms of health insurance abuse and profiteering were found. For example, medical facilities declared and paid unlawful technical services, filed claims for greater value than actual subscriptions, subscribed to wrong medicines for diseases, and mobilized insurance policyholders to provide unnecessary medical services. Patients also borrowed health insurance cards from other policyholders for medical treatment.

To prevent insurance abuse and profiteering, VSS has promptly and actively grasped situations and provided effective guidance for local social security agencies to strengthen coordination with relevant bodies and sectors, especially inspectorates. However, VSS can only retake wronged claims or recommend competent authorities for further resolution when detecting the above acts. Its solutions are situational as it does not have strong tools to prevent organizations and individuals from committing abusive and profiteering acts.

To address these issues, the social security sector requires support and direction from the Ministry of Labor, Invalids and Social Affairs, the Ministry of Health, and the People’s Committees of provinces and cities. This support is necessary to combat abuse and profiteering of social insurance, unemployment insurance, and health insurance funds.

By HT, Vietnam Business Forum