11 to 17 November is Fraud Awareness Week and one of the most pervasive types of fraud in South Africa is medical fraud. Last year, medical aids lost at least R15 – R20 billion of total private healthcare industry spend to fraud, with the Board of Healthcare Funders of Southern Africa (BHF) reporting about 10 to 15% of all claims as fraudulent, abusive or wasteful. Approximately 3 to 4% of the R160-billion medical industry is pure fraud. The instances of medical fraud can be reduced, but it will take fundamental shifts in a number of areas, including the way medical schemes are structured and the efficiency of state health care.
While the majority of South African healthcare practitioners are excellent and upstanding, it is a system that does lend itself to fraud. Unfortunately, the cost of fraud is passed on to clients as medical aids put contributions up by 9 to 11 percent each year to withstand escalating private healthcare costs (these increased by around 9% in 2018), with fraud contributing to this increase in expenses.
You certainly don’t have to look far to find examples of medical fraud. From dietitians charging for ‘consultations’ on the quality of hospital food and a doctor claiming to see over 80 patients (several of whom were dead) in a day, to nurse-administered dialysis treatments out of dodgy garages and pharmacies colluding with clients to submit false claims.
One of the reasons for this pervasiveness is that people are not sufficiently informed to query recommended treatments – and no one wants to take a risk with their health. A good example is the c-section. South Africa’s caesarean rate is 72% vs the 15% global rate. In private healthcare, cost isn’t usually taken as a factor when clinical decisions are made, and the worry is that the ethical responsibility may be blurred by financial incentives, such as the additional income a c-section brings to a gynae as opposed to a natural birth.
So how do we reduce this problem? Most critically, we need to change from a fee-for-service to a fee-for-value model, the latter meaning the healthcare provider will be remunerated based on the outcome of the treatment, regardless how many times the patient had to consult. The current fee-for-service model is quite contentious. As with all things, there are multiple nuances and discussions around it. Coming from a medical scheme perspective, we’ve seen how it can open the system to abuse, fraud and waste. At the moment, there are few regulations guiding what private practitioners charge. That’s one of the reasons why private healthcare has become so expensive.
Global fee arrangements are being investigated by medical schemes worldwide in an effort to constrain costs. This is effectively a ‘bundle’ fees model, where a healthcare provider receives a set sum to coordinate and distribute between all parties involved. The worry here is that an issue of underservicing may arise, with providers pocketing the profits. As with the fee-for-service model, a big issue is that a member may not be able to spot corruption, which is extremely disempowering. That’s where there’s a big education job to be done so the public becomes active watchdogs against corruption of any kind.
Additionally, to reduce medical fraud, state healthcare would need to reach global standards, in the process forcing competition in the private sector, which would bring costs down. Advancing tech – like wearables that monitor heartbeat, temperature, glucose and more – will also inevitably help streamline industry efficiencies and lower costs.
While structural changes will be necessary to significantly drop fraud rates, all members can play a role in reducing medical fraud by:
Getting second opinions before procedures
Questioning anything that seems suspicious
Not resorting to anything unlawful when you feel the ‘contribution pinch’
Seeing a GP before a specialist to ensure you get the right referral
Making sure you invest in preventative care and explore non-invasive options if appropriate
Trying not to view medical aid and severe illness cover as grudge purchases. Rather see them for the care they give you access to
Some more examples to help spread awareness of the kinds of fraud that happen:
We’re currently dealing with a specialist who operated on someone who was in a car accident. To claim, you need to submit a code. This practitioner submitted a code for the surgery and another code for stitching the patient up. Even though, one would assume the stitching would be part of the operation!
We commonly see fraud with time-based practitioners like psychologists, dietitians and physiotherapists. There have been cases where physios have wandered around hospitals offering people (who are not their patients) massages post-surgery and then claimed for these. Of course, as a sick person who has just been operated on, you’re not going to question it if an official-looking physio wants to work on your joints.
Pathology is another common one. If your doctor has asked you to get a specific blood test and the pathologist wants to perform a full set of blood tests, question this.
Prescribed Minimum Benefits (PMBs) are conditions/ treatments that medical schemes are required to cover by law. If you look at how many people prescribed PMBs 10 years ago, compared to now, it does indicate there may be fraud at work. For example, a stubbed toe might be classified as a broken foot.
Ophthalmology is another one. Hospital laser equipment has a set fee. But a specialist can charge up to 300% (for a PMB) or 100% (not a PMB) for the use of their own equipment.
Back problems are often prescribed surgery, even when preventative and non-invasive care can make big strides in alleviating the pain. There needs to be more of an emphasis on preventative care in general.
With diabetes growing in prevalence, dialysis is becoming common. Currently, you don’t need a licence to run a dialysis centre. So, we’ve seen people running them out of garages, using a tap, with a nurse administering treatment rather than clinical technologist. But the claim is still for the rate a clinical technologist would charge.
Sometimes members are in on it. For example, if a person is out of benefits and a doctor advises him or her to check into hospital to access treatment, even though he or she doesn’t need to be hospitalised or urgent care, then there’s an ethical decision to make.
Pharmacies can also collude with members. For example, we’ve seen pharmacies and clients both agree to tell the story that a humidifier (for example) was purchased. But the client never purchased any such thing, and then splits the claims pay-out with the pharmacist.
Medscheme is the medical aid administrator for Sanlam partnered schemes, Bonitas and Fedhealth. Martin Neethling, Head: Sanlam Healthcare Consultants, says, “Medical fraud, waste and abuse is a critical issue to be aware of. This kind of crime is becoming increasingly pervasive, with consequences for the private health sector and all medical scheme members. We all need to play a role in calling out corruption. This starts with being honest when divulging all details of one’s own medical – and family – history to an insurer when applying for cover and during the claims process.”
History of medical aids
The way medical aids are structured also contributes to fraud. Historically, there was a ‘you claim, we’ll pay’ kind of system, where medical schemes paid out most health-care claims in 30 days, with limited (or no) due diligence. Then 18 to 20 years ago, managed healthcare was introduced, with controls to determine whether medical procedures were clinically necessary. That’s when pre-authorisation came into effect. It’s also when schemes started specifying specific service providers and medicines to contain costs.
Just imagine for a moment, a world without medical aid. Imagine you had to pay for your appendectomy upfront, out your own pocket. Or the cost of a three-week stint in ICU, at approximately R15, 000 per day. Generally, people simply wouldn’t be able to afford it, so inevitably the cost of care would have to drop, and the model would need to change. Most of us would start getting multiple quotes and second opinions before agreeing to procedures.