Efforts to curb fraud, waste and abuse of medical aids necessary to keep costs low

Do medical schemes and administrators employ racial profiling, bullying and rogue tactics against Black and Indian doctors? Definitely not.

What is the impact of fraud, waste and abuse on the medical aid sector? At least 10 to 15% of all medical aid claims are fraudulent, abusive or wasteful in nature, about R22-billion last year alone.

So why has the past week been characterised by accusations that medical schemes and administrators were bullying the medical providers and patients. Medical schemes and administrators are obliged by law to safeguard the funds of the members against abuse and any funds recovered in this regard help to keep annual increases of medical aid under control.

Funds recovered help keep members’ fees low and deviant providers are in the minority

Medscheme recovered R147-million from the approximately R45-billion paid in claims. This is roughly 0.3% of total claims paid. The true savings are therefore from the change of claiming behaviour on the part of medical providers post forensic intervention which is over R11-billion. These are claims that would have been paid and would have required a higher contribution increase from members and reduced benefits.

In 2018, Medscheme investigated 1 101 cases, of which 830 had forensic findings. This represents only 3% of the approximately 24 500 healthcare service providers (19 000 medical professionals, 4 950 pharmacies and 550 facilities) we pay monthly. All other providers were paid without audit;

Out of the 830 forensic matters, we lodged 94 complaints with the Health Professions Council of South Africa (HPCSA) for fraudulent or unethical conduct, which we encourage the HPCSA to investigate as a matter of urgency.

In 2018, payment of less than 0.3% practices were held back subject to resolution of suspected fraud, waste and abuse and of these 830 forensic interventions, only 21 complaints (2.5% of all the cases) have been formally logged with the Council of Medical Schemes (CMS).

These stats are an indication that a very tiny minority is impacted by our audits, and that the claims of bullying are without basis. However, the company encourages any organisation or individual to lodge complaints with the industry regulator or pursue legal processes.

Context of fraud waste and abuse

Every minute somewhere someone is involved in the abuse and waste of health care services or is committing fraud against the medical aid sector.

When someone goes to the doctor for a headache, stomach cramps, a sceptic wound, and a doctor performs blood tests, could this be considered medical aid abuse, waste or fraud?

To make matters worse, what if the doctor bills for services not rendered, use incorrect codes for services, usually at a higher tariff, waive deductibles and or co-payments, bill for a non-covered service as a covered one and unnecessarily or falsely prescribe drugs.

How about “phantom billing”, misrepresenting services such as performing a tummy tuck and billing it as a hernia operation or an appendectomy.

There is also “upcoding” — that is billing for a more expensive service than the actual one provided.

Other examples of fraud, abuse and waste include health providers admitting patients to hospitals, when it is not clinically necessary, in order to access in-hospital medical aid benefits; health providers admitting healthy patients to hospitals to enable patients to claim for the Hospital Cash Back Plan insurance policies; claims are submitted on items such as hearing aids and frames for glasses, when the patient does not need the item or even when the patient is not aware of the claim; healthcare providers using multiple practice numbers and then submitting duplicate claims for the same service.

Fraud, abuse and waste of health services and funds is unethical and illegal. It is a waste of the financial resources of the health care sector, costing it more than R22-billion a year according to the Board of Healthcare Funders (BHF) and Council for Medical Schemes.

The BHF has previously indicated that some medical aid members are making money by selling their cards to patients outside doctors’ offices, one of the more common types of fraud.

The organisation has said medical aid contributions amounted to over R100-billion a year, and between 8% and 12% was lost to fraudulent activities.

There is also collusion between medical aid members, patients, pharmacies and doctors who committed the crime in exchange for money or other “gifts”. In some cases, pharmacists allowed card holders to embark on unrestricted shopping.

It is unethical and illegal when a doctor knowingly bills for a procedure that was not provided. The major distinctions between fraud, abuse and waste is being able to prove intent. Whilst one fraud is criminal, waste and abuse is either negligence or opportunistic.

Why are medical schemes easy targets for fraudsters? Because unlike other forms of insurance, medical aids pay up front and in good faith when a claim is submitted. This is to ensure members can have immediate access to healthcare treatment when they need it most.

We then check retrospectively that claims and payments made were correct, in line with the treatment provided and the scheme rules.

Amongst others, we have technology software to do trends on various elements of the claims, including: Treatment regimes, average duration of treatments and average numbers as well as average claims (per area of specialty). Our predictive analysis tool assesses all our claims nationally and we then look where there are significant outliers. Those would be the claims that are investigated to ensure that they are valid.

It is a pity that some doctors have accused us of being insensitive when we investigate mainly wastage and abuse, as fraud requires that intent is proven. However at Medscheme we are only focused on what was the doctor entitled to be paid, irrespective of whether he intended to over-charge the medical scheme or not.

Delays occur when a service provider refuses to allow us to validate the claims and we withhold payment. Instances where we have determined abuse, then we request the doctor to pay back the funds not due to them and where there is clear fraud — we report them to authorities.

Ultimately, the wastage and abuse of medical aid funds comes back to the patient through increased medical aid contributions.

For example, through our predictive tool, we have over the past 18 months saved R200-million which historically would have been incorrectly paid out or not recovered. These savings assist the schemes to improve member benefits and the quality of care that the member can access.

When funds are wasted or abused, there will either be the less benefits or higher annual contributions.

Corruption is a silent killer for the health sector. According to Transparency International, a global civil society organization leading the fight against corruption, common corrupt practices in health care sector include worker absenteeism; theft of medical supplies; bribery in medical service delivery; fraud and embezzlement of medicines, medical devices, and health care funds; improper marketing relations; weak regulatory procedures; opaque and improperly designed procurement procedures; and diversion of supplies in the distribution system for private gains.

It is a pity that despite the staggering costs of fraud the discussion of insurance fraud has always centred on defining the problem rather than on finding solutions. We need viable approaches for uncovering and recovering fraudulent claims.

Indeed, the perpetrators of health care fraud continue to find new ways to siphon money from the health care sector which ultimately impacts the premiums we all pay for cover.

Here are some ways to protect yourself from health care fraud and help keep health care costs down for everyone:

  • Read and understand medical aid agreement so that you know what and who is covered and what is not covered by your benefits.
  • When visiting a doctor, ask questions about the services you receive. Are they necessary? Are they a luxury?
  • Protect your medical aid card. Keep it away from thieves. It represents your benefits.
  • Scrutinise your doctor’s receipts and medical bills. Understand each item listed on your bill to confirm that services were actually performed.
  • If you have co-payments, always ask for a receipt and check it before you leave the provider’s office for accuracy. Save it as your proof of payment should a question arise at a later time. Question any charges that exceed your co-payment.
  • And finally, always notify your healthcare provider if you suspect abuse, waste and fraud or any suspicious activity.
  • Everyone must co-operate both medically and financially at all levels of medical treatment to ensure an honest, reliable and successful medical care.

    Anthony Pedersen is chief executive of Medscheme, a subsidiary of AfroCentric Group of companies, which provide health administration and health risk management solutions to the healthcare funding industry

    Subscribe to the M&G for R2 a month

    These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

    The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

    And for this weekend only, you can become a subscriber by paying just R2 a month for your first three months.

    Anthony Pedersen
    Guest Author

    Related stories

    Zuma maintains his true colours at Zondo commission

    The former president’s escapades at the commission of inquiry into state capture are a far cry from Nelson Mandela’s response when summonsed to testify in the high court

    DA leader bought wife a car with ‘corruption’ earnings

    Senior Ekurhuleni councillor Shabangu purchased a Ford SUV from an alleged R1.2-million kickback

    ANC: ‘We’re operating under conditions of anarchy’

    In its latest policy documents, the ANC is self-critical and wants ‘consequence management’, yet it’s letting its members off the hook again

    Zondo tightens his grip with criminal complaint against Zuma

    The state capture commission’s star witness now faces a criminal complaint and another summons

    Peacemaking criminology as ubuntu: A reply to Thuli Madonsela

    If the rich and powerful are afforded amnesty, then so too must the poor who are often pushed into lives of crime

    Zondo dismisses Zuma’s recusal application

    The summons to compel the former president to appear before the state capture commission stands, says legal head

    Subscribers only

    ANC: ‘We’re operating under conditions of anarchy’

    In its latest policy documents, the ANC is self-critical and wants ‘consequence management’, yet it’s letting its members off the hook again

    Q&A Sessions: ‘I think I was born way before my...

    The chief executive of the Estate Agency Affairs Board and the deputy chair of the SABC board, shares her take on retrenchments at the public broadcaster and reveals why she hates horror movies

    More top stories

    Zuma maintains his true colours at Zondo commission

    The former president’s escapades at the commission of inquiry into state capture are a far cry from Nelson Mandela’s response when summonsed to testify in the high court

    Gordhan tells Zondo how Moyane wanted to advance the objectives...

    The public enterprises minister is being cross-examined by Tom Moyane’s lawyers at the state capture inquiry, as both men seek to defend their reputations

    Burundian refugees in Tanzania face increasing danger

    Human Rights Watch has documented cases of Burundian refugees being tortured and forcibly returned by Tanzanian authorities

    Exclusive: Top-secret testimonies implicate Rwanda’s president in war crimes

    Explosive witness testimony from the International Criminal Tribunal for Rwanda implicates Paul Kagame and the RPF in mass killings before, during and after the 1994 genocide.

    press releases

    Loading latest Press Releases…