Insurance Medical Services fraud unearthed in AP

After Telangana, it is the turn of Andhra Pradesh to unearth fraud of hundreds of crores of rupees in purchase of drugs, medical equipment, surgical tools and other items by the Director of Insurance Medical Services (IMS).

Sleuths of AP’s Vigilance and Enforcement (V&E) wing stumbled upon evidence suggesting that prima facie at least ₹151.40 crore fraud was committed by the IMS officials and staff in that State.

In a report sent to the State government, the V&E officials stated that embezzlement of funds was committed during the stint of three Directors of IMS during the financial years 2014-15 and 2018-19.

In Telangana’s case, a single Director was accused of playing a key role in misappropriation of funds and eventually landed behind the bars along with other employees and civilians.

In Andhra Pradesh however, the V&E officers found that three Directors of IMS were responsible for purchase of medicines, equipments and other items in violation of procedures and guidelines.

More importantly, they gathered evidence that a former Minister of AP had ensured that a work order of providing Toll Free Services and ECG services be given to a company on nomination basis. Inquiries by the investigators indicated that while the company was paid ₹480 for one ECG, in other hospitals — it was available for ₹200.

Interestingly, the company claimed bills by providing call logs which were traced to Internet Protocol addresses in Telangana. Close to ₹8 crore was paid to this company in violation of procedures.

Sources said the government is likely to pass on the details dug out by the V&E Department to either the Anti-Corruption Bureau or the Crime Investigation Department for registering criminal cases against the three Directors, former Minister, employees of IMS and private persons.

V&E authorities deduced that the total budget allocation for drugs and medicines during the tenure of three Directors was ₹293.51 crore.

“But they purchased drugs and medicines worth ₹698.36 crore. The differential budget amount is ₹404.85 crore,” an officer associated with the inquiry, unwilling to be named, said.

During inspections, a pharmacist and a senior assistant of the Directorate of IMS admitted to the officials that they fabricated quotations in connivance with the non-rate contract firms.

Medical equipment, surgical items, furniture, computers and other articles, all worth ₹2.32 crore, were found lying without usage for past one year in ESI hospitals and dispensaries.