In 2018, under pressure from travel assistance companies and other stakeholders, the Nepalese government promised action to curb the lucrative trade in fraudulent helicopter rescues.
Five years on, though, such fraudulent activity is still endemic in Nepal, according to assistance companies, insurers, and trekking and mountaineering operators.
“The current situation in Nepal is being monitored very closely by Allianz Partners,” said François-Xavier Duchateau, Group Chief Medical Officer at Allianz Partners. “Our business recently visited the region as part of our Medical Provider Assessment Programme, and despite the governmental recommendations proposed in 2018, the situation does not appear to have improved.”
In a previous ITIJ, we reported how bogus helicopter rescues became rife in Nepal when mountain tourism boomed following the end of the country’s long-running civil war in 2006. The rapid growth in mountain tourism made the rescue sector attractive to agents, middlemen and helicopter charter companies, some of which have been accused of exaggerating clients’ symptoms – or even simply falsifying them – to earn commissions of 10 to 15 per cent of the cost of a medevac flight.
Typical scams, allege industry experts, include guides insisting on helicopter evacuation to a hospital for treatment if a client develops even mild symptoms of altitude sickness, such as a headache, instead of simply descending on foot to a lower altitude. Guiding companies have also been accused of encouraging clients to begin their trek without properly acclimatising at lower altitude.
“In some cases, trekking companies create itineraries that climb too high, too fast, all but ensuring altitude sickness,” claimed Jwalant Gurung, Marketing and Operations Manager at Crystal Mountain Treks, a Nepalese trekking operator. “In others, they immediately demand that trekkers take a helicopter down at the slightest hint of headache or nausea, instead of simply descending and waiting, which is the normal procedure for mild cases of altitude sickness.”
“It’s not as bad as it was, but it has not completely gone away,” said Raj Gyawali, Director of trekking operator socialtours. “The government’s promises of action are restricted to what it can do in Kathmandu and create regulations. Managing it in the remote field is another issue. This is easier said than done, and will mean monitoring each rescue with measures such as medical checks, interviews and cross-checks. That will slow down rescue efforts,” he warned. “The biggest potential for a solution comes from assistance companies and insurers. Nepal needs a local insurance company that covers chopper insurance, which means reinsurers need to work with Nepali companies to create this mechanism. Having local partnerships on the ground – and not just handlers and agents – will ensure that each claim can go through better scrutiny, and over time, better institutional knowledge can create an environment where fraud can be reduced to almost zero.”
Typical scams, allege industry experts, include guides insisting on helicopter evacuation to a hospital for treatment if a client develops even mild symptoms of altitude sickness
Gyawali also suggests that the Helicopter Society of Nepal, founded in December 2018, needs to work towards establishing recognised best practice standards. He accepts, too, that the issue requires a multi-pronged approach from all stakeholders. “There is no quick fix, and blaming the government alone for inaction will not solve it. There are multiple players here, and all have to play the right part with a clear focus,” he said.
Investigations and ultimatums
Traveller Assist, an Irish medical and cost containment company which at the time conducted its own investigation into systematic rescue fraud in Nepal, estimated such fraudulent practices had cost insurers millions of dollars.
In 2013, an investigation by Ed Douglas, the then-Vice President of the British Mountaineering Council, found evidence of several abuses for profit: unnecessary evacuations, overcharging for rescues, double-charging for the same rescue, deliberately rescheduling fake rescue flights into trekking itineraries, and using ‘rescue’ flights to give clients a fast trip down from the mountain.
Six years later, an investigation by Traveller Assist, published in ITIJ issue 216, was picked up by international media including The Guardian and The New York Times. Traveller Assist had brokered an alliance with three insurance underwriters to issue the Nepalese government with an ultimatum: unless the government clamped down on rescue fraud, they would no longer write policies for travellers visiting Nepal.
The Nepalese government’s response was to fanfare its own extensive investigation, carried out in 2018, into 10 helicopter companies, more than 30 rescue and trekking agencies, and six hospitals. The government pledged to place all tourist rescue operations under the aegis of the Nepalese police force, with the creation of a central rescue coordination unit at Kathmandu’s Tribhuvan International Airport. The report also suggested that police-coordinated helicopter rescue operations should be put out to tender, with the police force reclaiming costs from insurers. At the time, Tourism Secretary Krishna Prasad Devkota said the new guidelines would be implemented from the beginning of the 2018 mountaineering season.
In 2018, Nepal’s government also announced a strict ban on ‘disseminating controversial messages or broadcasts without prior approval’, no doubt in an attempt to limit the kind of reputational damage to tourism caused by whistleblower reports of endemic insurance fraud.
Five years on – and at the close of the deadliest Everest climbing season in history, with 12 confirmed fatalities and five people missing, presumed dead – the investigating committee’s lengthy report has not been published in full. After the initial flurry of media interest, attention to the issue in mainstream media has dwindled to near zero. There is little evidence that any of the recommendations have been implemented.
Business booming for fraudsters
Covid-19 locked down all tourism to Nepal in 2020, but mountain tourism has since bounced back, with Nepal issuing a record 478 Everest climbing permits to foreigners in 2023. For insurance fraudsters, though, the tens of thousands of trekkers on somewhat less challenging lower-level itineraries (below 15,000 feet) offer the most tempting potential for the helicopter rescue scam.
In recent years, insurers and assistance companies have become warier and more proactive in their dealings with suppliers, including helicopter companies and hospitals. Fraudsters have in the past targeted insurers who paid up promptly and unquestioningly. As a result, insurers are now demanding fuller documentation. Most remain watchful and critical of a lack of organisation and proper regulation of Nepal’s helicopter companies.
“We continue to see numerous operators carry out helicopter evacuations who do not appear to operate to any common standards, so it is not always easy to establish the quality of service,” said Duchateau. “For example, helicopters do not appear to be equipped to the standards we expect, though the patients transported do not usually require in-flight medical intervention. In terms of billing, we always make sure to ask for all necessary documentation – for example, for engine start-up and shut-down times, to work out exact flying time, and also requesting flight manifests,” he added.
“We have had experiences in the past where providers have evacuated patients from two separate insurers at one time and still charged each insurer for the full cost of the journey. We therefore always question any unexpected names on the manifest,” he said. “We will continue to monitor the situation.”
Clearly, not all trekking guides are complicit in the fraudulent rescue business, but guides routinely err on the side of caution when summoning a helicopter evacuation for a client showing signs of altitude sickness.
Add a potentially hefty cash incentive in the form of a commission from the helicopter company and it’s easy to see why the business is still booming.
“The Nepal government made a big splash by announcing a blue ribbon committee to ‘investigate’ the problem, then declare the report is completed and detail some broad conclusions followed up by saying there will be new rules to prevent [it happening again] in the future,” said Alan Arnette, a veteran climber, Nepal expert and mountaineering coach.
“Nothing happens. This has been their pattern for the past 15 years,” he added.
“Multiple sources told me that helicopter rescues were a daily occurrence on Everest this year,” he said.
At least 10 helicopter companies continue to operate in Nepal – one, Simrik Air, was grounded in May 2023 after a fatal crash.
Arnette cited another well-informed source, Guy Cotter, Managing Director of expedition company Adventure Consultants, as estimating the ‘unprecedented’ number of flights between Everest Base Camp to Camp II at around 200.
Gurung agreed: “I believe fraudulent rescue is still prevalent. The Nepalese government did implement the centralised police rescue system, but it was discontinued after a while. It really didn’t do much to prevent fake rescues and it also added a bureaucratic layer that impeded genuine rescues.”
Most insurers now require that all evacuations be pre-approved, Gurung said. “This is time-consuming and can be dangerous in emergency situations.”
Too good to be true
Like other stakeholders in the trekking business, Gurung pointed the finger at companies that offer high-altitude treks at rock-bottom prices, in effect using such deals as loss leaders.
“Some trekking companies offer the Everest Base Camp trek, including domestic air fare, for as little as $1,400 and even under $1,000,” he said. As their model is mass trekkers, he explained, they can still turn a profit if they make a certain number of rescues for every hundred or so trekkers, although the trek itself is run at a loss.
In recent years, insurers and assistance companies have become warier and more proactive in their dealings with suppliers
Trekking clients should reconsider buying all-inclusive trekking packages offered for less than $1,500, Gurung advised.
“If your trip price seems too cheap be true, it probably is,” he said. “The trekking company will need to make that money back somehow, likely through such a scam. It’s important that trekkers help to shut down these scams.”
Efforts to put pressure on the Nepalese government to curb the fraudulent helicopter rescue business have so far been ineffective, or even counterproductive, with much publicity but apparently little action. In the absence of anything more than token action by the Nepalese authorities, then, the onus seems to be on insureds to resist temptingly cheap trekking packages – and on insurers and assistance companies to demand comprehensive documentation from helicopter companies.
Helicopter rescues from the rugged Himalayas are the stuff of high drama, so it’s not surprising that the issue attracts media attention from time to time. As always, insurers need to remain vigilant and beware of fraud in order to contain costs. Realistically, though, the numbers are relatively small.
Fewer than 200,000 people go trekking in Nepal annually, so even if rescue fraud remains an issue, in reality insurers probably lose far more each year for more mundane fraudulent claims for loss, theft, or routine overtreatment and overprescribing in mainstream mass tourism destinations.