Health Minister Aaron Motsoaledi is pushing for more transparency around the software, algorithms and AI programs used by medical schemes to monitor claims from health providers and members following damning findings of racial profiling by major schemes.
The inquiry panel had found black providers were more likely to be found guilty of fraud, waste and abuse (FWA) by Discovery, GEMS and Medscheme, and that the healthcare professionals also faced procedural unfairness in how FWA claims were processed.
The FWA process is intended to allow medical schemes to recover funds lost due to irregular billing and incorrect claims by healthcare professionals.
The industry estimated it lost between R22bn and R25bn annually to such misrepresentations.
On Friday, briefing the Portfolio Committee on Health about the investigation, Motsoaledi said it was unknown whether the algorithms had changed between 2019 – when the interim report was issued – and 2025.
“What the panel has studied or inquired on was between 2012 and 2019. So, if the schemes – after receiving the interim report – did change and started doing things differently, we’ll soon find out.”
In his presentation, Motsoaledi added some recommendations, specifically regarding software discrepancies.
“There must be complete transparency on the algorithms and the artificial intelligence programs schemes use to monitor claims made by providers and members alike.
“If the schemes persist with the argument that they will not allow this because it will undermine the detection of FWA, then the Minister of Health and the CMS must introduce a mechanism making it possible.”
Medical aid schemes ought to be accountable to the public for the systems they used, he added.
Discrimination
The report is the result of an inquiry launched in 2019 after public allegations by the National Health Care Professionals Association and Solutionist Thinkers that medical schemes and administrators were discriminating against black healthcare professionals and that their claims were being withheld based on race and ethnicity.
At the time, the Council for Medical Schemes (CMS) was directed to establish an independent investigation panel – the Section 59 Inquiry – to probe the allegations.
Presenting the report to Motsoaledi, panel chairperson Advocate Tembeka Ngcukaitobi said the the document confirmed interim findings from 2021, revealing both procedural and substantive or systemic unfairness.
To establish any substantive unfairness, the panel had developed a risk ratio to map out in which years and in which disciplines there were more investigations and guilty findings against black healthcare providers.
Ngcukaitobi advocated for a review of the payback procedure used by medical schemes, saying the panel had heard evidence of healthcare practitioners being notified only after three years of a claim, while some had been forced to close down their practices as a result.
On review
In an editorial, BusinessLIVE writes that if the medical schemes believe the methodology used by the Section 59 inquiry panel was flawed, they must take the report and findings on review.
Meanwhile, the findings must stand, casting a stigma on the credibility of the country’s major medical schemes while their existence is threatened by the government’s plan to introduce National Health Insurance (NHI).
Valuable as the panel’s findings are, however, said the editorial, Motsoaledi is completely off the mark in painting the entire private sector with the same brush to promote the virtues of NHI. In his budget vote speech recently, he had accused the findings of the panel of being “an indictment of our healthcare financing system”.
The panel found that statistical analysis of risk ratios over several years showed black practitioners faced a disproportionately higher likelihood of investigation and sanction than their white counterparts – the risk ratio referring to the likelihood a black practitioner (coloured, Indian and African) would be subject to an investigation, finding and penalty for fraud, waste and abuse compared with a white practitioner.
The risk ratios for the different medical professionals showed they were more than 300% likely to be found guilty, a figure even higher for black anaesthetists (650%).
‘Unsound’
The Board of Healthcare Funders (BHF), Health Funders Association and Discovery slammed the methodology used by the panel, describing it as “flawed” and scientifically unsound.
Discovery Health also strongly disagreed with the findings and urged the CMS to carefully review the panel’s conclusions to prevent harm to medical scheme members and the long-term viability of medical schemes.
Discovery Health CEO Dr Ron Whelan said the conclusions are “based on flawed methodology, unscientific assumptions, and misinterpretation of complex data”, and it was reviewing the report in full and considering it options, including a formal review of the findings – which drew numerous conclusions “not supported by credible evidence”.
“No evidence has been presented to support the allegations that (we have) investigated or sanctioned any healthcare professional in a biased or unjustified manner. In fact, the panel’s own interim report in 2021 confirmed that the processes used by schemes were legally sound and showed no explicit evidence of racial bias.
“Furthermore, all complaints submitted to the Section 59 Panel by healthcare providers against schemes administered by Discovery Health were shown to have legitimate grounds for investigation, with no evidence of racial profiling.”
GEMS said over the past three years, since the release of the interim Section 59 panel investigations, it had “taken comprehensive steps to strengthen its FWA management framework to eliminate any potential for disparate outcomes”.
It said after the interim report made several recommendations, it had already begun to implement policies which “largely reflect reforms”, reports the Cape Times.
GEMS principal officer Dr Stanley Moloabi said: “It is reassuring that the panel has found no evidence that GEMS acted with racist intent. This distinction is critical – structural outcomes must not be confused with deliberate discrimination.”
Legal action
The CMS has raised the prospect of legal action against the schemes, with head of legal affairs John Letsoalo saying advice would be sought on whether an approach could be made to the Equality Court or whether a class action should be instituted by those negatively affected by the schemes’ racially discriminatory practices.
He told Business Day that the findings “are quite distasteful”.
“We take racial discrimination, especially in private healthcare, very seriously.”
Some medical practitioners had lost income because of the actions of medical schemes, and investigations into the allegations could take years, with medical practitioners slapped with crippling deductions as the schemes took action to recoup their money.
This often forced many of them out of practice.
The Health Minister said there needed to be an early warning system that alerted the practitioner about wrongdoing, and that a weakness in section 59 of the Medical Schemes Act was that it did not specify what steps a medical scheme had to take when investigating fraud, wastage or abuse.
The different medical schemes had come up with their own methods.
“We will have to look into this,” he said, adding that the NHI would also be examined to see if it had to be amended.
Action
Apologies are necessary, but are not enough and material redress and structural consequences should be the next steps against medical schemes that racially profile black healthcare professionals, according to healthcare workers’ union, Health & Other Services Personnel Trade Union of South Africa (Hospersa), which condemned the announcement of the findings.
Hospersa spokesperson Lindelwa Mdlalose told the Sunday Tribune that the report confirmed the suspicions and personal experiences of many black healthcare professionals.
The union has called for remuneration and class action litigation against the schemes found to have applied racial profiling, and for them to issue formal public apologies.
It also sought a restitution framework, overseen by the CMS, designed to review and remedy individual cases fairly, efficiently, and urgently.
The union said the report “must serve as a turning point”, and as a call to action.
ActionSA’s Kgosi Letlape said he would lay criminal charges against several medical aid providers.
Panel recommendations
The inquiry panel has recommended amendments to the Medical Schemes Act to include clear procedural safeguards, including that schemes disclose the software and AI programs on which they rely to detect suspect claims to assess whether they entrench bias.
It also recommended schemes conduct yearly assessments of the racial profile of providers investigated for fraud and publish the data broken down by discipline, so discriminatory patterns don’t go undetected for years.
Business LIVE article – EDITORIAL: Medical schemes need to prove credibility
Business DAY PressReader article – Profiling action mooted
See more from MedicalBrief archives:
Medical schemes’ racial profiling inquiry report delayed
Report into claims of racial profiling by medical schemes ‘indefinitely delayed’
Top medical aid schemes guilty of racial bias, inquiry finds