The Council for Medical Schemes (CMS) is consulting lawyers on how to proceed against the three medical aids named in the Section 59 “racial profiling” investigation – after the July publication of a report saying some black, coloured and Indian medical professionals had their right to procedural fairness violated.
The report had focused on Discovery, the Government Employment Medical Scheme (GEMS) and MedScheme, all of whom, as well as the Board of Healthcare Funders, strongly opposed the findings, calling the investigation fundamentally flawed, reports BusinessTech.
Health Minister Aaron Motsoaledi said the CMS was in the process of procuring a firm of attorneys to develop a “comprehensive legal opinion” to advise on appropriate actions.
This would help the CMS to “determine how to act against those identified in the final report, and identify mechanisms to legally protect those negatively affected by the discriminatory practices uncovered”, he said, adding that the opinion would also consider the application of section 67(1)(o) of the Medical Schemes Act, which empowers him to make regulations providing for penalties in cases of contravention of section 59 of the Act.
“The CMS may benchmark proposed penalties against those applied by other regulatory bodies, such as the Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA), to strengthen deterrence and prevent future instances of such conduct,” he said.
While the National Department of Health and the Minister have yet to step into the process, Motsoaledi said a platform would be established so a “multi-disciplinary stakeholder committee” (still to be set up) can engage on Fraud, Waste, and Abuse mechanisms used by medical schemes.
He also wants more regulations and amendments “to provide stronger oversight and enforcement powers over schemes engaging in discriminatory conduct”.
The following measures are being explored:
• Establishing a collaborative structure between the CMS and the Health Professions Council of South Africa (HPCSA), with a focus on addressing Fraud, Waste and Abuse;
• Requiring CMS to issue more regular guidance on issues arising from the FWA investigation and sanctioning processes;
• CMS should provide procedural certainty for medical schemes in exercising their powers … the remedies available to parties who feel aggrieved, and the penalties in the event of a breach of the MSA;
• Developing … an urgent mechanism to assist providers in engaging the schemes once providers are accused of FWA-related conduct;
• Introducing transparency mechanisms to regulate the use of software, algorithms, and artificial intelligence systems employed by schemes to monitor submitted claims;
• Developing urgent regulations for the establishment of the tribunal and mediator services to restore power imbalance between service providers and medical schemes;
• Development and implementation of an urgent mechanism to ensure schemes are accountable to a public body for the systems they use; and
• Proposing urgent amendments to section 59(3) of the MSA to strengthen its regulatory detail.
Meanwhile, a group of black and Indian doctors has accused medical schemes of using them as “scapegoats” to prop up their reserves and “issuing even more audits now”, and also slammed the CMS for ignoring its requests for a meeting, reports News24.
The Solutionist Thinkers Group, representing the 260 black and Indian healthcare practitioners, said in its legal submissions to the virtual hearings on the Section 59 investigation that it “strongly believes there is intentional racial profiling” in the industry, and that the regulator assisted in perpetuating a narrative that undermines trust and confidence in black participants in the private healthcare system.
The chairperson of the Solutionist Thinking Group, Nomaefese Gatsheni, said the CMS had ignored its requests to meet and decide the way forward since the publication of the 2021 interim report, and that rather than seeing an improvement, some of the medical aids were becoming “worse” in terms of requesting “unfair audits” on black practitioners.
“The Solutionist Thinking Group believes there is intentional racial profiling of black healthcare providers by … Discovery, Medscheme and GEMS. The purpose was to hinder the growth and expansion of black healthcare practices,” she alleged.
Gatsheni highlighted the fact that the CMS did not have a meeting with the group after the 2021 report, but then allegedly held a seminar about fraud, waste and abuse in the medical schemes industry, inviting the accused schemes.
She alleged that the focus of that summit was to point fingers at black medical providers for committing fraud, and claimed the regulator had not adequately probed FWA of the system by the schemes and their administrators.
“We refuse to be used as scapegoats for mismanagement of schemes’ funds by the schemes and their administrators….”
She said that due to clawbacks of funds that schemes claim doctors gained fraudulently – or by abusing the system when they offered expensive treatment instead of economically proven alternatives – some of its members had taken their lives.
While some schemes have pulled back on those clawbacks and “unfair audits” since the report, she said Medscheme had “moved from better to worse”.
“Healthcare practitioners continue to face demands for information dating back beyond 90 days, requiring audits spanning up to two or three years.”
In a statement sent to News24, Medscheme said all of its investigations are initiated based on a prediction for irregular billing, and have no racial bias in any manner or form.
“We categorically reject all claims suggesting Mescheme performs any racial profiling when auditing healthcare claims. It is our further assertion that the Medscheme datasets contain no racial information or indicators,” wrote the administrator.
Gatsheni said GEMS has stopped conducting “unfair audits” since that 2021 report, but that Discovery Health is “on and off”.
Meanwhile, Health Portfolio Committee chairperson Sibongiseni Dhlomo said the committee has made recommendations relating to the report’s findings.
“One was to establish an early warning system within medical schemes to alert healthcare providers to … issues arising under Section 59 of the Act. This would safeguard honest practitioners from unwarranted scrutiny, while enabling timely corrective actions to mitigate financial losses.”
The committee would consult with legal advisers about possible legislative amendments to improve transparency and accountability. “It also stressed the need for a comprehensive strategy to address the backlog of complaints with the CMS,” he said.
BusinessTech – Government coming after big medical aids in South Africa
See more from MedicalBrief archives:
Medical schemes’ algorithms under scrunity after racial profiling findings
Top medical aid schemes guilty of racial bias, inquiry finds
Discovery issues rebuttal of inquiry finding of racial discrimination