MUMBAI: Fraud and waste continue to drag India’s health-insurance system, with Rs 8,000–10,000 crore leaking from claim payouts each year, says a Boston Consulting Group–Medi Assist report. Fraud and unnecessary claims inflate premiums, strain insurer finances and drain public funds. Weak data systems and loose checks also push patients into higher out-of-pocket spends.The analysis shows retail health portfolios carry higher fraud risk than group portfolios. Within group covers, fraud is consistently elevated in BFSI and healthcare. Reimbursement claims pose the biggest threat: group reimbursement claims show 9x more fraud than group cashless, while individual reimbursement claims show 20x the incidence of group cashless. Misrepresentation and document fabrication remain the top fraud types across IPD/OPD. Fraud risk clusters in mid-ticket claims (Rs 50,000-Rs 2.5 lakh), where incentives are high and oversight moderate.
“Small-ticket fraud and abuse are often rationalised as harmless… This mindset has turned into a systemic behavioral challenge… contributing materially to the broader issue of FWA (fraud, waste and abuse) in the health insurance ecosystem,” the report said. The report urges tighter fraud prevention/detection, unified medical-coding rules, AI-driven oversight and faster data-sharing via the Ayushman Bharat Digital Mission and the National Health Claim Exchange. Medi Assist says tech will do the heavy lifting. “As India’s health system stands at an inflection point, the next decade will be defined by connected data and intelligent automation,” said Satish Gidugu, Medi Assist’s CEO. Reducing fraud and rebuilding digital trust, he said, will help keep care “accessible, affordable, and accountable for all citizens.”For BCG’s Swayamjit Mishra, the biggest gains lie in the “remaining 8%” of claims that sit between harmless and outright fraudulent.
