A new independent report on the private health insurance market has called for a clampdown on claims fraud and malpractice by hospitals and consultants.

The report, prepared for Health Minister James Reilly, says health insurers should publicly acknowledge that fraud/malpractice exists and should publish data on the extent of monies recovered from hospitals and consultants who have wrongly billed insurance companies for accommodation or treatment.

The review indicates there is evidence of claims abuse involving hospitals and doctors wrongly invoicing health insurers for accommodation or services/treatment that were not provided.

The report's finding follows claims recently by cancer sSpecialist Senator John Crown that he had evidence of a fraudulent billing scandal for cancer drugs provided free to St Vincent's Private Hospital in Dublin in 2002. The VHI said it recouped €1 million 'raised incorrectly' but the hospital said there had been no evidence uncovered of collusion or fraud by hospital staff.

The report says while the majority of healthcare providers are honest and well-intentioned, there is evidence of abuse in the system.

It says health insurers reported anomalies to the review such as:

*Claims being made for semi-private accommodation when the patient had been on a trolley.

*Inappropriate invoicing for beds not designated as private.

*Consultant up-coding of procedures.

*Inappropriate lengths of stay.

*Private fees for patients treated in a public facility.

*Inappropriate invoicing for certain specified drugs, tests and prostheses.

*Consultants claiming benefit when they were not present or had not personally performed the procedures.

*Cross-speciality referrals when these were not strictly clinically necessary.

The report recommends that private health insurers should adopt a co-ordinated industry approach to the
identification and tackling of fraud, waste and abuse in the healthcare market.

It says the health insurance industry should develop a plan over the next three months which builds on national experience of other insurance and financial providers who have addressed this issue.

The industry should fund a whistleblower initiative which should have an online anonymous reporting facility, hotline facilities and actively promote the initiative within the customers of the industry and public and private providers, the report says.

The report on controlling health insurance costs was drawn up by Pat McLoughlin, Chief Executive of the Irish Payment Services Organisation and a former Deputy CEO of the HSE.

Other recommendations in the report include:

* The Health Minister should consider introducing measures to encourage younger members into the market and discourage, through financial penalties, people who take out health insurance for the first time after age 30. 

* In order to ensure that patients are treated at the lowest possible cost consistent with quality, insurers should use existing information on the appropriate treatment locations for individual procedures. Insurers should use information of this kind to query cases claimed as an in-patient which might have been carried out on a day basis.

* The extent of clinical audit being carried out by each insurer should be independently evaluated.

* In line with the plans for implementing 'Money Follows the Patient', case-based charging should be implemented which would mean a fixed, pre-established payment for each case or patient episode.

* The Health Minister should consider introducing measures to encourage younger members into the market and discourage, by means of a financial penalty, people who take out health insurance for the first time after age 30. (This is known as lifetime community rating).

* Health insurers should prove their commitment to retaining and attracting persons in the 18-29 age group by discounting premiums for full time students up to age of 23.

This report is the first phase of a two-phase review, the second of which is to be prepared within three months.