The Nepali government says that a wave of fraudulent claims and unneeded evacuations has cost insurance companies millions of dollars this year alone.
KATHMANDU, Nepal — When Geoffrey Chang, an Australian trekker heading to Mount Everest Base Camp, woke up with chest pain, his Nepali guide pushed immediately for a medical evacuation, saying he had a serious case of acute mountain sickness.
But the next morning, Chang was feeling better, and his oxygen levels had come back to acceptable levels, he said. His travel companion, Michelle Tjondro, asked the guide if they could simply rest that day or walk down like others with similar symptoms.
That’s when the red flags started to pile up.
The guide pushed aside those suggestions, continuing to press for a costly helicopter evacuation. Afterward, at a hospital marketed to foreigners in Kathmandu, Nepal’s capital, Chang’s passport was confiscated for several days, he said, and as the bill rose, a doctor told him his symptoms would need to be exaggerated in order to have insurance pay for his stay.
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Chang and Tjondro, and the insurance company they booked with, now all believe they were the target of a scam that has corroded Nepal’s tourism industry and sucked huge sums of money from insurance companies.
The Nepalese government and trek insurance companies describe a wave of fraud in which Mount Everest trek operators, guides, helicopter evacuation companies and hospitals are conspiring to bilk insurance companies by encouraging unneeded evacuations and exaggerating medical symptoms and services. Officials said that as of June, they had flagged millions of dollars’ worth of potentially fraudulent insurance claims this year.
Guides earn handsome commissions from disreputable trekking operators by pushing for emergency evacuations in cases of mild acute mountain sickness and other illnesses, dissuading trekkers from contacting doctors or from trying less drastic measures. In some cases, they say, healthy trekkers have even agreed to a rescue in exchange for a free ride off the trail.
When bills are submitted, helicopter companies inflate prices for rescues and hospitals overcharge for services. Multiple insurance claims are submitted for a single helicopter ride if more than one trekker is on board.
Some trekking companies, which act as brokers and take a percentage of rescue fees from helicopter companies, make more money through evacuations than they do charging for hikes, officials said, pulling in thousands of dollars in kickbacks when a typical profit margin for each trekker might be just a few hundred dollars.
Nepal’s government announced a new monitoring program late last week to crack down on the fraud. Rabindra Adhikari, Nepal’s minister for tourism, said in an interview that new procedures had been set up for medical evacuations, and that helicopter companies, trekking operators and hospitals must now submit invoices for rescues to his office to ensure that they are “genuine.”
Nepali officials said they were also investigating claims that guides in some cases had purposely made clients sick to force an evacuation, reportedly through serving spoiled food or mixing large amounts of baking soda into meals.
Insurance companies have had enough, too. They have raised premiums, posted red-banded advisories on their websites warning trekkers of the scam, or sometimes threatened to end coverage entirely in the country.
Phil Sylvester, a spokesman for World Nomads, a popular insurance provider with clients around the globe, said the number of unnecessary rescues was rising. In one recent example, Sylvester said, a man was air-evacuated for an earache.
“I personally have seen 200 to 250 suspect evacuation cases in a year from a handful of insurers,” he said. “With each evacuation costing $6,000 to $10,000, that adds up.”
The problem has become extensive enough that World Nomads recently put together an internal blacklist of Nepali helicopter companies and hospitals that it suspects of fraud. Sylvester said claims involving a blacklisted company were not automatically rejected. Trekkers, he said, “have no control over who gets called on the phone.”
But in some cases, trekking operators were telling clients that they had received authorization from insurers when they had not, he said.
Dan Richards, the chief executive of Global Rescue, a company that organizes medical evacuations, said Nepal was an outlier in that so many actors colluded to defraud the consumer and insurance companies. He worries that the fraud will probably continue as long as insurance companies pay for the helicopter flights.
“Everybody in the chain is involved,” he said.
Nepal is a poor country, sandwiched between India and China, where every year thousands of visitors embark on multiday hikes to glimpse some of the world’s highest peaks.
Aware of the risks associated with traveling to high altitudes, many trekkers buy insurance for several hundred dollars, opting for plans that include helicopter rescues. To ensure proper acclimatization, they spend days hiking to places like Everest Base Camp, where the air is thin and trekkers often experience mild altitude sickness.
A few dozen trekking companies are thought to be central to the fraud.
In a common scenario, mountain guides exploit inexperienced trekkers by pressuring them to be helicoptered back to Kathmandu at the first minor signs of illness. They are dissuaded from exploring other options, like taking medicine that eases altitude sickness, going to clinics along the trek route, or simply descending a few thousand feet, which solves many cases.
Other versions of the deceit are more disturbing.
In 2016, Faina Gersh’s mountain flight back to Kathmandu was delayed by bad weather. Gersh, a trekker from California, was worried that she would miss her connecting flight to the U.S. The owner of her trekking company came up with an alternative.
“They suggested that we say I was sick, like with food poisoning or an illness, so then my insurance would cover a helicopter,” said Gersh, 42, who had finished a trek to Base Camp. “I was like, ‘No, I’m not going to commit insurance fraud.’ ”
In the case of Chang and Tjondro, the Australians whose guide had pushed an air evacuation in 2016 even though they were willing to walk down the mountain themselves, the insurance company they bought a policy from, World Nomads, said there were some clear irregularities.
Sylvester, the spokesman from World Nomads, said that their guide, without contacting the insurance company, had coordinated with the trekking company, Advanced Adventures, to send a helicopter from Flight Connection International, a company blacklisted by World Nomads, to pick up the trekkers in Lobuche, a small village about 16,000 feet above sea level and a day’s walk from Base Camp.
After arriving in Kathmandu, around 90 miles away, the two Australian trekkers were transported to Swacon International Hospital, a clinic for foreigners that is also on World Nomads’ blacklist, where Chang’s passport was taken, possibly “to prevent me from leaving too early,” he said.
In interviews, all three of those companies denied wrongdoing.
When he was discharged after three days, Mr. Chang said, he was given no receipt. The hospital told him “they would sort everything out,” he said.
Later, they found that a doctor’s report attached to Chang’s insurance claim, which The New York Times reviewed, included inaccuracies, the pair said, including that Chang’s symptoms had not improved even after descending, making a medical evacuation necessary. Tjondro reiterated that they had not even tried to descend by foot because their guide discouraged it.
The claim came to more than $10,000, which Sylvester, the spokesman from World Nomads, said the company had paid, though under new policies the claim would probably have been flagged.
Dr. Minalma Pandey, the medical director at Swacon who wrote the report, said that she was aware of the trekkers’ complaints, but insisted that nothing untoward had happened at the hospital. When pressed about Chang’s contention that a doctor had informed him that the hospital would need to exaggerate his symptoms, she said, simply, “How can we do that?”
Keshav Wagle, the managing director of Advanced Adventures, the trekking company the two used, said that he had stopped taking trekkers to the Swacon clinic.
But he angrily rejected Chang’s and Tjondro’s complaints, claiming that she and Chang had never paid for a trek with the company — though the receipt they received from the trekking company showed his signature.
Shyam Kandel, an official from Flight Connection International, rejected allegations that Flight Connection International was involved in any fraud, saying the company had “no role in dealing with insurance.”
“We just arrange helicopters when trekking companies request them,” he said.
In the Nepali government investigation that led to the new rules for trekking companies, the report accused both Flight Connection International and Swacon of producing fraudulent invoices and overcharging insurance companies.
Insurance companies are closely monitoring whether the government acts on those findings. But Rishi Ram Bhandari, the managing director of Satori Adventures and Expeditions, worries about the fraud’s lasting effect on tourism here, and about whether it will be stopped.
Protected by ringleaders with political connections, the ruse has ballooned in size, he said, slowly normalizing a practice that has jeopardized the tourism jobs of thousands of honest locals. He fears that it may be “killing the goose that lays the golden eggs.”
Last year, an older guide walked into Bhandari’s office looking for work. Bhandari said he was not hiring. The man pressed, emphasizing that hiring him would bring “lots of benefits.”
“If you send me as a guide for a group of 10 people, I will definitely provide you with two rescues,” the man told Bhandari. “I said, ‘Thank you for your proposal, but I’m not that type of businessman.’ ”