The Conduct of Health Insurance Policy Fraud in the Rainmaker - Essay Example

The Conduct of Health Insurance Policy Fraud in the “Rainmaker” The conduct of the health insurance policy fraud in the Rainmaker was deliberate. In the novel written by John Grisham with a movie adaptation, the insurance company named “Great Benefit” issued an illegal instruction to its employees to include in its operation manual the initial denial of all claims that will be made by policy holders. This resulted to a lawsuit filed by Rudy Baylor against Great Benefit for not keeping its obligation of covering the insurance his client which in this case, is the bone marrow transplant which could have saved the life of his client. The conduct of the insurance company Great Benefit is grossly unethical because it deliberately renege its obligation to its policy holders by intentionally denying all claims regardless if such claims were under the coverage of the policy or not. Worst, it continues to accept insurance premiums from its policy holders and also continues to accept new policy holders knowing that if such policy holders will fail a claim, they will just initially deny it whatever the circumstances are whether it is a legitimate claim or not. I. What policies and procedures that you devise would allow ethical conduct to be fairly reviewed, evaluated, with application to all employees’, including management?  To apply a new policies and procedures that is responsive to the current problem of Great Benefits insurance company, it will be sound for me to figure out first what caused the insurance company to be fraudulent. There may be underlying reasons that precipitated such unethical and illegal acts and knowing those, will make the devised policies and procedures more sound and responsive to the ethical issue at hand. In this case, Great Benefit insurance company is mired in deep debt that makes its financial position precarious. The policy of initial denial of all claims of its policy holders whether covered or not, may be just its saving mechanism to keep its liquidity and save its precious resources to keep itself viable. In a way, it is buying time by denying all initial claims until its financial woes are over. So the first policy that I will devise will address this problem of liquidity and inability of the insurance company to settle its obligation. I will make it necessary, as a matter of policy, for the insurance company to have a required money reserve for an equivalent number of policy holders. This is to safeguard policy holders that in case of a claim, the insurance company will have enough money to cover such claims. Second, I will replace the “all claims denial policy” in its operations manual by a policy mandating the knowledge of the law that covers fraud by form of a quiz or a test and it shall be included in the performance appraisal of every employee be it in the rank and file or in the management position. This is to ensure that everybody in the organization knows that doing an illegal act is punishable by law. II. Ethical issues I have read in Wall Street Journal during the semester and its applicability in the Rainmaker case a. Fraud – If we speak about cannot fraud, Enron’s CEO Kenneth Lay is on top of the list. He deceived everybody from its investors, to stock analysts to its employees that his company is doing well when in fact it is not. This is very similar to the Great Benefit insurance case who lied and concealed its debt so that it can still collect premiums from its policy holders. b. Misrepresentation – on the question about misrepresentation, WorldCom tops the lists of those who deceives its stakeholders by “massaging”, “cooking its books” or “window dressing” its financial statements so that the company will still look attractive to its investors and general public, when in fact, as usual, it is not. Great Benefit insurance company in John Grisham’s writing lied about its true financial position and instead of fixing it, denied all the claims of its policy holders. III. Write what improvements and changes you would make to your ethical corporate evaluation process.  After learning the above cases of fraud and misrepresentation from Wall Street Journal, I will polish my initial draft of policy changes in my ethical corporate evaluation process. But there is a certain policy that I would like to retain as a preventive measure against fraud. The policy that will be retain will be the inclusion of testing all employees knowledge of the law against fraud, be it from the rank and file to the higher management as part of their performance appraisal. Knowing that fraud is rampant after reading those articles at Wall Street Journal, I will implement an audit system as a matter of policy that will check all claims made by policy holders and its dispositions. This will ensure that all claims were processed correctly according to the stated agreement and coverage of their policy. Third, I will fix the financial structure of Great Benefit by issuing a policy that it will not accept new policy holders until it has rehabilitated its financial health. This will also prevent the further commission of fraud of the company. Lastly, to regain public trust for the insurance company, I will implement a greater transparency policy for Great Benefit insurance. That means that its authentic financial statement shall be made available not only to its investors but also to the greater public who has a stake in the company. The company may initially lo Read More