Financial fraud in the private health insurance sector in Australia: perspectives from the industry

Purpose - While financial fraud against the private health insurance sector in Australia has commonalities to other countries with similar health systems, in Australia fraud against the industry has garnered unique characteristics. The purpose of this article is to shed light on these features, especially the fraught relationship between the private health funds and the public health insurance agency, Medicare and the problematic impact of the Privacy Act on fraud detection and financial recovery. Design/methodology/approach – A qualitative methodological approach was used and interviews were conducted with fraud managers from Australia’s largest private health insurance funds and experts in fields connected to health fraud detection. Findings – The industry profits from a robust regulatory framework, as well as the use of business and clinical rules and strong analytics. However, the sector is not uniform and the problems are not uniform. The fraud managers in the funds have differing approaches to recovery action and this range from police action, the use of debt recovery agencies, to de-recognition from the health funds. Most funds reported a need for more technological resources and higher staffing levels to manage fraud. They all viewed the Privacy Act as an impediment to managing fraud against their organizations and they desired that there be greater information sharing between themselves and Medicare. Originality/value – This paper contributes to knowledge of financial fraud in the private health insurance sector in Australia.