Practitioners and Discovery at odds over its clawback of ‘irregular’ claims
Discovery Health has come under fire from medical practitioners for unethically “clawing back” claims it had approved and paid, well past even the threeyear common-law prescription period.
A medical aid fund must, in accordance with the Medical Schemes Act (MSA), query or dispute a claim within 30 days from the date of lodging with both the fund member and the healthcare provider. The latter then has 60 days to respond and rectify the claim. If the scheme does not notify either party within 30 days that a claim is erroneous, or fails to allow correction and resubmission, the onus is on the scheme to prove the error.
This is a statutory time limit that extinguishes the right to, at a later stage, revisit the issue afresh, contest and claim back payment. Discovery has exceeded these time limits, by far. Some treatments were preauthorised, so accepted and paid after the procedure, whereas others were authorised and paid only once the procedure was performed.
Now, in order to enforce its clawbacks, the scheme is withholding payment due to practitioners for the accounts of new patients until practitioners accept liability and settle the “old” (disputed) debt.
Discovery does not deny that it enforces clawbacks, claiming it is legally entitled to do so to protect the scheme’s income.
But practitioners allege it is threatening them with disbarment and/or criminal prosecution, and that they are coerced into signing acknowledgments of debt for which no evidence exists.
Under the MSA, a practitioner registered with the Health Professions Council of SA (HPCSA) may only be punished under the Health Professions Act. It obliges the Council for Medical Schemes (CMS) to report unprofessional conduct by practitioners to the HPCSA as the statutory body that has jurisdiction over its registered practitioners.
Medical schemes cannot discipline, fine or prosecute health practitioners.
Clawbacks are an unethical practice of retrieving money already paid out to practitioners without allowing them access to patient records for which the amounts that were paid out are being reclaimed.
Practitioners are also denied the right to have disputed cases heard by way of a peer-review process.
In a guidance to members in February 2018, the Professional Board for Physiotherapy, Podiatry and Biokinetics expressed concern that “certain” schemes were behaving unethically towards registered practitioners.
It said schemes may only deduct such amounts if there has been proven theft, fraud, negligence or misconduct, and if “an accused person should be found guilty of such offences by a court of law”.
Practitioners say they are accused of fraud and theft, based on an algorithm’s flagging, given days within which to respond, and forced to sign admissions of guilt and pay for what appears to be “billing errors” after using incorrect codes. These codes are used to protect patient confidentiality.
Practitioners may also not disclose all clinical notes without the patient’s informed consent. Yet the fund insists this information must be sent to it. It is relying on Section 15 of the National Health Act, which permits a healthcare provider to disclose patients’ personal information to others, as is necessary “for any legitimate purpose” – but this is a breach of the Protection of Personal Information Act.
The SA Society of Physiotherapy, in a February 2021 guidance, noted practitioners have an ethical obligation to protect patient confidentiality. Informed consent must be given, either in writing or verbally, and, although patients sign contracts with their medical schemes, those do not override a practitioner’s statutory and ethical duties towards patients.
An association of practitioners plans to bring a giant charge with the CMS and institute court action against Discovery if it does not stop the clawbacks.
Professor Birgit Kuschke, a contract and insurance law specialist, says on the facts Discovery is “threatening and terrorising” practitioners to sign acknowledgments for unsubstantiated and prescribed debt. “In many cases, these were pre-authorisations – surgeons do the work, get paid and are then told by the fund they shouldn’t have, so the fund is withholding other payments due.”
Some practices now force Discovery patients to pay cash to avoid the clawback.
“Upon presenting the receipt to the medical aid, the scheme rejects the patient’s claim and alleges it has already paid the practice directly, which it has not, and that the practice is double billing or misappropriating the patient’s payment. They deduct from patients’ benefits but don’t pay practitioners. It is unconscionable conduct.”
Responding, Discovery Health says: “Clawbacks aim to recover payments made from medical scheme funds [that belong to members] that have been paid inappropriately and therefore constitute unjust enrichment on the part of the practitioner.”
Kuschke says Discovery must first prove unjustified enrichment. If a treatment is pre-authorised, there is an agreement on the payment and this cannot lead to an enrichment claim in law.
Citing a lack of administrative capacity, Discovery said it processes about 275,000 claims daily: “The vast majority of claims are made appropriately with the requisite information to facilitate payment within a few days. Due to operational capacity limitations of schemes and administrators to verify the enormous volumes of claims and in particular to check these for fraud the schemes are forced to accept the vast majority of claims at face value.
“It would not be fair to the majority of members and practitioners who claim in an ethical way, to delay claim payments until each claim has gone through extensive checks… The risk of paying fraudulent or irregular claims … must be balanced by the right of a scheme to subsequently check for such irregularities and to allow a scheme to set off any such payments against future claims, to recover these monies for the scheme and its members. The full benefit of all recoveries vests with the medical scheme members since if these irregular payments were not recovered the medical scheme contributions would need to be higher to cover these additional costs.”
Asked whether individual patients, many of whom pay for treatments from their medical savings accounts, are reimbursed, Discovery said “[Fraud, Waste and Abuse] recoveries are paid directly to the medical scheme; this is a direct saving for members”.
Discovery said, as a not-for-profit entity, which holds members’ funds, it needs to be able to reimburse its members or practitioners when they have incurred medical costs or performed medical services.
And yet settlements of debt are reflected as credits on the bottom line of the company, benefiting its shareholders.
Discovery claimed the processes it uses in the identification, investigation and recovery of funds are fair and compliant with the applicable legislation.
“The interim report of the Section 59 Investigation has also upheld Discovery Health’s interpretation of Section 59 and the legality of all the processes followed.”
That investigation, instituted by the CMS, examined black practitioners’ allegations of unfair treatment, including clawbacks. In January 2021, the interim report was released. The panel is working on a final report. A CMS spokesperson said: “In the interim, providers who have complaints against medical schemes may lodge a complaint through our complaints process and these will be dealt with in terms of the current legislation while the report is being finalised.”
But, in terms of the investigation, negligence and fraud must be proven before setting off any amounts.