KATHMANDU – Nepal’s tourism sector has made a dramatic rebound in 2017 with tourist arrivals reaching to an all-time high of nearly 1 million after being hit by the devastating 2015 earthquake.
The numbers of trekkers and mountaineers have also increased significantly with more than 178,000 individuals opting for adventurous activities on the slope of a mountain like Everest, Annapurna, Manaslu and others.
But the growth in adventurous activities has also fueled demands for helicopters rescues and medical evacuations, and the number of fraudulent activities has also increased. The latest scam uncovered is Fake Rescues, a source of massive insurance fraud in Nepal.
On July 30, Nepal’s government moved to clamp down on insurance fraud hatched by powerful brokers in trekking and mountaineering agencies, which involves bogus helicopter rescues and hospitalizations.
A government investigation committee submitted a 700-page probe report to Culture, Tourism and Civil Aviation Minister Rabindra Adhikari recommending that, from the next tourist season in September-November, all rescue activities be entrusted to the Nepal Police to stop the million-dollar insurance scam that has damaged the country’s reputation.
“We sprung into action after widespread complaints that Nepal’s trekking and mountaineering agencies have been making hefty claims against their customers’ tourist insurance policies for fake helicopter rescues,” Prakash Sharma Dhakal, deputy spokesperson of the ministry, told EFE.
“These agencies have been accused of presenting fake bills for wide-ranging medical examinations for simple altitude-related headaches.”
WHAT IS FAKE RESCUE?
As many helicopter operators do not conduct rescue operations directly, middlemen or agent, trekking and mountaineering agencies arrange helicopter rescues then forge bills on which they get a hefty commission, said Dhakal, a member of the investigation panel.
Operators have been pocketing thousands of dollars from insurance companies by making multiple claims for a single chopper ride or pushing trekkers to agree to airlifts for minor illnesses, he said.
He added that the investigation had revealed that a tourist pays $1,200 to $1,500 for a trek in the Everest region. “But that’s not reality. The company could earn three times that if it brings back the tourist on ‘emergency’ medical or rescue flight.”
“Such types of companies have flourished and have been damaging the genuine ones,” he told EFE.
The investigation committee probed 10 helicopter companies, six hospitals and 36 travel, trekking and rescue agencies by collecting their transaction details from January 2015 to May 2018.
“We found that a local agent billed the insurance company 50,000 euro ($57,972) for evacuating a group of trekkers,” said Dhakal.
In another case, they found that a local agent issued two separate bills for one rescue. The insurance company was billed 86,248 euro.
The hospital bill is also striking. “We found that a minor treatment in hospital was billed 51,749 euro ($60,000) for the insurance company,” said Dhakal. “In some cases, hospitals were found hesitant to discharge patients to increase bills.”
“It’s a big scam. In many cases, trekkers are being used as cash cows. In some cases involving hefty claims, it was not possible without the involvement of trekkers or tourists as well,” he said.
Insurance premiums have jumped more than eight times in the last few years because the rescue scams have become so rampant. The investigation report stated that annually 1,500 rescues are conducted by helicopters, up from 100 to 200 a few years back.
The government’s committee said in its report that there have been widespread complaints of dishonest companies serving adulterated food to make tourists sick so that they can be evacuated by helicopter, and they can receive commissions from helicopter companies and hospitals and clinics.
On the other hand, trekkers with minor illnesses, particularly when they hike and have symptoms of altitude sickness, are pressured into costly helicopter evacuations, Rajendra Bajgain, managing director of Gurkha Encounters, a travel and trekking company, told EFE.
“There are many unscrupulous operators. They offer you a very cheap package of $500 to trek to the Everest region,” said Bajgain.
“But in reality, it’s bait. The package can cost you 10 times more,” he said. When you start trekking, it’s obvious you are exposed to high altitudes, and you can feel and behave unusually. The guide tells you that you’ve got altitude sickness. To help prevent altitude sickness, a good guide will advise you to ascend.
“The opportunist guide, however, will suggest you call a rescue helicopter and you are admitted at the hospital shortly,” said Bajgai. “The guides, brokers, travel and trekking agencies and hospitals all profit at the expense of insurers.”
Anil Manandhar, corporate manager of Shree Airlines, Nepal’s largest helicopter company, said normally charges for rescue from the Everest region is $10,000 to $12,000 per person. If the rescue mission is at the Camp I and Camp II of Mt Everest, it costs around $15,000 per person. In the same area, if the group rescue is conducted, which is risky and difficult, it can cost up to $40,000.
“In our case, we will not agree to anything that we feel is unethical. So, we are not much involved in rescue that comes through agents,” he said. “Obviously, there are frauds, and to reduce it, the insurers should eliminate middlemen or agents.”