Health Insurance Board’s New Plan to Reduce Fake Claims and Current Status
The Health Insurance Board is preparing to upgrade its insurance program to a digital system and employ artificial intelligence (AI) to reduce fraudulent claims in the health insurance program. Despite prolonged payment delays leading to service disruptions, the board states that all affiliated health institutions continue to provide services. The government has prioritized this initiative, allocating NPR 1.5 billion for health insurance this year. Of this, NPR 1.1 billion has already been spent on previous year payments, with the remaining NPR 400 million expected to fund services for about four to five months until mid-September.
However, a cybersecurity expert has warned that a clear operational framework must be established before implementing such a digital system, as otherwise it may introduce significant risks. The government, aiming to provide accessible and quality healthcare, operates the National Health Insurance Program through the Health Insurance Board. Under this scheme, families of one to five members pay an annual premium of NPR 3,500 to receive up to NPR 100,000 in health services. Yet, complications in managing claims have highlighted the need for reforms.
The board reports that the number of active insured persons has reached 7.5 million, with a total enrollment of 10.7 million. A total of 502 health institutions, including government, community, and private entities, are affiliated. Last year, due to unpaid insurance funds, major hospitals such as Tribhuvan University Teaching Hospital had to suspend insurance services. According to board information officer Bikesh Mall, all payments to health institutions for the previous fiscal year were completed by mid-July, and the payment process for the first month of the current fiscal year is in its final stages.
The board notes that of the NPR 1.5 billion allocated by the government, NPR 1.1 billion has been used for payments, leaving NPR 400 million remaining. It is estimated that premium revenue will generate around NPR 300 to 400 million. To address issues in health insurance, digital system implementation is identified as a key reform measure. To clearly identify insured individuals, the board plans to mandate a national identity card for all citizens over 16 years, effective from December 15. Board Chair Dr. Suwas Pyakurel has stated that this will reduce unnecessary pressure.
Initially, by extending working hours for nursing staff contracted with the Ministry of Health and classifying services into inpatient (IPD) and outpatient (OPD) categories—providing services up to NPR 75,000 and NPR 25,000 respectively—officials report reduced financial burdens. Chair Pyakurel emphasized, “A robust digital framework that connects insured individuals, insurance companies, and health institutions and manages the claims process will simplify procedures and reduce excessive claims. Therefore, digital systems are a top priority for us.” He added, “Studies show that greater use of digital systems facilitates easier processes, which is why the board has decided to employ AI.” He further explained that AI is under testing and will be used to detect fraudulent claims.
Improving the previous digital system and systematically working to reduce fake claims are ongoing priorities. “The AI developed by Nepali IT experts will be extensively employed to verify fraudulent claims,” said Chair Pyakurel. “Within three to six months, we aim to directly connect with hospitals, make all information accessible in the database, and flag items such as CT scans not performed on patients.” Servers are being updated, and special attention is given to ensuring cybersecurity.
What considerations are necessary when moving to a digital system? Cybersecurity expert Kumar Pudasaini explained that cybersecurity, digital trust, transparency, and accountability must be prioritized, supported by a governance framework. “Implementing a digital system without a governance framework poses risks,” said Pudasaini, founder president of the Global Cybersecurity Community Forum. “International best practices follow the ‘security by design’ principle, meaning security must be embedded from the initial development phase, just as earthquake resistance is considered in building construction.”
Given the wide range of stakeholders involved in the health insurance program, challenges have emerged in the supply chain. “To reduce risks in this extensive supply chain, system testing is mandatory, and adherence to the security by design principle is essential,” he emphasized.