Medical aid fraud costing millions

Payouts for services and medicine not delivered are on the rise

MEDICAL aid fraud is on the rise, with millions being paid out for services, medicines and medical services that are not provided, and losses potentially passed on to members.

The Board of Healthcare Funders of Southern Africa (BHS) said fraud in respect of private medical aid schemes was a concern.

BHF managing director Dr Katlego Mothudi said: “This is an industry challenge, and it is a cause for concern. It is as a result of this acknowledgement that most schemes have implemented fraud management strategies which involve deployment of forensic resources and systems to tackle this scourge.”

Discovery Health, the largest medical aid scheme in the country with a membership of more than 2.7 million, recovered R568 million in fraud savings last year. Discovery Health chief executive Dr Jonathan Broomberg said the most common offences were claims submitted for services not rendered or medicines and medical devices that were never supplied.

Broomberg said the volume of cases reported to the forensic unit continued unabated. The top offenders by region were Gauteng, with 2 595 claims, KwaZulu-Natal (916) and the Western Cape (773).

“Discovery Health data shows that general practitioners and pharmacies are among the top offenders, while paediatricians and ophthalmologists had the lowest number of cases reported in 2017,” said Broomberg. The medical aid scheme has deployed a specialised team of analysts, investigators and a proprietary forensic software system to analyse claims data and identify any unusual claim patterns.

Bonitas Medical Fund, the thirdlargest medical aid scheme with over 600 000 members, said there were far more incidences of waste and abuse than of fraud, and they were more easily quantifiable as they were usually clear contraventions of tariff codes or rules.

Bonitas chief operating officer Kenneth Marion said it was estimated that 15% of claims in the health-care industry contained an element of fraud, waste and abuse (FWA). “For a scheme of Bonitas’s size, this translates to a loss of R190m. To address this, we implemented initiatives against FWA, including hospital and pharmacy claim analytics.

“The result was the identification of FWA of R129.8m, with R31.2m recovered in 2017. The scheme further benefited from R75m in potential savings,” he said. One of the culprits nabbed through Bonitas’s efforts is Wandile Theophilus Mashego, an audiologist and speech therapist practising in Pretoria

who was convicted of 259 counts of medical aid fraud and a charge of contravening section 66 of the Medical Schemes Act.

Mashego was handed a five-year suspended sentence.

“We identified a sharp spike in his claims and some members contacted the scheme complaining about claims submitted on their accounts without their knowledge and no service having been rendered to them,” said Marion.

Fedhealth principal officer Jeremy Yatt said that since 2016 they had recovered and saved over R16.6m. Over the same period, its administrator identified R612.7m worth of irregular claiming and achieved recoveries and savings in excess of R200m.

“No one knows the true extent of supplier-induced demand, or of over-servicing and over-charging, as the statutory and ethical rules that should be governing such behaviour are non-existent. There are currently no uniform tariffs or guidelines that address what providers may or may not charge, so every case needs to be adjudicated and dealt with on its own merits. On a fee-for-service basis, the financial risk will always lie with the scheme,” said Yatt.

Yatt said Fedhealth’s administrator processed over six million claims monthly and all claims were paid in good faith, based on the trust and integrity of the healthcare service provider.