Discovery Health, South Africa’s largest private medical schemes administrator, has published a letter to members in which it says there was no racial discrimination in its fraud, waste and billing abuse (FWA) processes, reports BusinessLIVE. The letter said a minority of health practitioners act dishonestly and their racial demographics are coincidental.
The company was responding to findings of an investigation into racial profiling commissioned by the industry regulator, the Council for Medical Schemes.
An interim report released last week claimed the Government Employees Medical Scheme, South Africa’s biggest medical scheme for public servants, and the two biggest medical scheme administrators, Discovery Health and Medscheme, were 1.4 times more likely to conclude that black healthcare practitioners had committed fraud, waste or abuse than their white counterparts.
Discovery Health said that because the report had not been shared with the company before it was published online, it has had insufficient time to examine it. “We will comment further on the report within the six weeks set out for medical schemes to do so,” it said.
The panel found unfair racial discrimination in forensic investigations into FWA by the medical scheme industry.
Discovery Health said this was based on the fact that there was a higher percentage of black, Indian and coloured healthcare professionals among those who, after the detailed forensic investigations, were found to have breached industry rules in their billing processes.
It said that while results were more likely to find black and Indian health professionals guilty, the investigation algorithms and processes for detecting fraud and investigations and hearings were found by the panel not to be racially biased. It welcomed this finding.
Discovery Health letter
We are writing to you today as Discovery Health and Discovery Health Medical Scheme about the release of an Interim Report by the Section 59 Investigation Panel on Tuesday 19 January 2021. A media conference was also held on the same day to announce the report’s findings.
We want to give you a bit of background on the issue and tell you more about the report.
The panel made the full 320-page Interim Report available to the Council for Medical Schemes (CMS) and the Steering Committee last Friday (15 January). Unfortunately, they did not share the report with us (Discovery Health and Discovery Health Medical Scheme) before it was published online.
This means that we have not yet had enough time to examine the contents of the report.
Now that the report is open to the public, we will study the findings and recommendations in detail. We will comment further on the report within the six weeks set out for medical schemes to do so.
Summary of the investigation panel’s findings
The panel has concluded that there has been unfair racial discrimination in forensic investigations into fraud, waste and billing abuse (FWA) by the medical scheme industry.
They based this on the fact that there is a higher percentage of Black African, Indian and Coloured healthcare professionals amongst those who (following detailed forensic investigations) were found to have breached industry rules in their billing processes.
The panel reached this conclusion even though there was no specific evidence of even a single case where they found the method or approach used to identify and investigate the FWA, to be inappropriate.
Also, the panel has been clear in recognising that there is no evidence of deliberate, explicit racial bias in the methods and algorithms the medical schemes and their administrators used to identify and investigate FWA.
Unfortunately, the panel disregarded the expert analytical and legal evidence that Discovery Health submitted in response to each of the specific complaints against the 19 medical schemes under its administration, including Discovery Health Medical Scheme. This evidence shows clearly and factually that our processes to fight FWA are fair, independent and not discriminatory in nature.
We are, however, pleased that the panel supports our strong view that our forensic processes are robust and independent. Yet, we feel that the conclusion of racial bias based on the racial distribution in the outcomes must be examined further.
Background to the Section 59 investigation
In May 2019, groups of Black African, Indian and Coloured healthcare professionals made allegations of racial bias and discrimination against the entire South African medical scheme and medical scheme administration industry. These allegations referred to how the industry manages investigations into fraud, waste and billing abuse (FWA).
Dr Aaron Motsoaledi, who was then the Minister of Health, instructed the Council for Medical Schemes (CMS) to investigate these allegations. The CMS convened the Section 59 Investigation Panel (independent of CMS) as an advisory panel to the CMS and the Minister of Health.
The panel started its investigation and arranged hearings. Discovery Health made submissions on behalf of medical schemes under its administration (including, but not limited to, Discovery Health Medical Scheme) and along with other industry role players, submitted extensive evidence, analysis and information at these hearings in response to the allegations.
Why do we take investigations into fraud, waste and abuse so seriously?
It is very important to point out that only a small number of healthcare professionals have been investigated for fraud, waste and billing abuse (FWA) practices and needed to pay money back to medical schemes. The vast majority of healthcare professionals focus completely on delivering excellent care, showing a committed and honest work ethic.
Corruption and FWA seriously harm efforts to make medical insurance affordable for medical scheme members. In the end, FWA also holds medical schemes back from extending lower-cost options to a broader representative group of South Africans. We cannot tolerate this abuse of members’ money, which not-for-profit medical schemes hold on behalf of members.
In fact, at the 2019 FWA Summit, the Council for Medical Schemes (CMS) stated that FWA claims may account for up to 15% of all claims that medical schemes in South Africa pay out. This means that as much as R22bn to R28bn of medical scheme members’ funds – hard-earned money paid towards their medical scheme membership – may be lost to fraudulent claims each year. Sadly, the total amount actually lost to FWA yearly could be much more than this.
Discovery Health’s own detailed calculations show that fraud, waste and billing abuse against its 19 medical scheme clients, make up at least 3% to 7.5% of the claim amounts every year. Looking at Discovery Health Medical Scheme alone, this means that the scheme members lose between R700m and R1.7bn of their combined money, to FWA every year.
The extent of these losses is apparent. Between 2012 and 2018, Discovery Health saved members of medical schemes under its administration, over R7.8bn in recovered funds, as a result of fraud and forensics activities, with a halo impact, that is, relating to subsequent behaviour change by healthcare professionals, of R6.3 billion. In 2018 alone, Discovery Health recovered just over R500m on behalf of Discovery Health Medical Scheme. All FWA recovered funds are paid back directly to medical schemes, restoring and protecting member contributions.
Acting in accordance with our legal (fiduciary) duty
Medical schemes have a duty to make sure that members’ money is treated with due care and to make sure that they only pay valid medical claims. If we fail to achieve this, it is not only a breach of the scheme’s commitment to you (our members), but it also leads to increases in your scheme contributions, and it can make schemes unaffordable.
Discovery Health is the leading administrator and managed care provider in the market. It is, therefore, our mandate and duty to examine the accuracy and legality of claims from the schemes within the law, exercising fairness throughout. We have done very well in this responsibility and led the industry by developing:
Sophisticated forensic algorithms. (An algorithm is a process or a set of rules that must be followed in calculations or other problem-solving tasks).
Methodologies (a system of carrying out processes).
Processes (a series of steps).
Discovery Health and Discovery Health Medical Scheme respect the recommendations of the panel.
We support the panel’s recommendation of greater oversight by the CMS and the Health Professions Council of South Africa (HPCSA) to make sure that corruption and FWA are rooted out of our society.
We also support the panel’s recommendation that the HPCSA expedite hearings in relation to practitioners charged with FWA.
We welcome the panel’s important finding that Section 59 of the Medical Schemes Act does not need to be changed. Section 59 is the section which underpins medical schemes’ ability to recover money paid out inappropriately. The panel has confirmed that our FWA processes are necessary and justifiable and aligns with the independent legal opinions, audits and reviews that we have frequently ordered for our own forensic processes.
We also welcome the panel’s recommendations of actions that could be taken to strengthen FWA processes. It is necessary to guarantee fairness, objectivity and transparency in these processes. We now regularly make sure that an independent observer takes part at all healthcare provider hearings, to guarantee fairness.
Our unwavering commitment to promote and support a diverse healthcare profession
We have always been committed to promoting a diverse healthcare profession in our country – one that reflects our demographic profile – as this is important to a sustainable and fair healthcare sector. We are not only committed to transformation in the healthcare sector but also very aware of the complex challenges healthcare professionals face.
We want to remind you of our all-inclusive approach to feeding sustainability of the healthcare sector. We do this by giving widespread support to healthcare practices through:
Our healthcare provider relations team
The Discovery Foundation and
The Discovery Fund.
Discovery has also contributed significantly to the training of healthcare specialists, to building up healthcare in rural areas and to ongoing, leading clinical research. We assure you that our support to local healthcare professionals is unwavering.
We take the interim report's findings very seriously.
We strongly support both transformation of the healthcare sector and driving continuous improvement to increase the rigour and fairness of every forensic process.
We strongly maintain that there is no racial discrimination in our fraud, waste and billing abuse processes whatsoever. We also respect the panel’s process and recommendations and will work hard within the healthcare system to make sure that outcomes are satisfactory, balanced and representative in future.
Aligned to our values of being a force for social good and embracing diversity, we are determined to contribute to strengthening the social drivers and other socio-economic factors in the healthcare system. In the panel’s own description, these contribute to the disproportionate outcomes reported on.
We stay committed to working constructively with the CMS to address the challenges healthcare providers face whilst encouraging and facilitating ethical conduct. We are also completely devoted to constructively taking part in the country’s broader dialogue and pathway to full transformation.
Black health-care practitioners who have been blocked by Discovery, Medscheme and the Government Employees Medical Scheme from providing a service to their clients and receiving payments want to be unblocked with immediate effect, says a Sunday Tribune report.
Mandisa Sikhosana, executive director and founder of Qualisure Laboratory Services based in Pinetown and the provincial leader of the National Healthcare Practitioner’s Association (NHCPA) said before there is talk of relief, medical schemes should release monies owed and unlawfully taken from professionals.
“There are many people who are on the brink of losing their assets. To salvage those situations, they should be allowed to see patients and receive payments,” she said.
Dr Mvuyisi Mzukwa, vice-chairperson of the South African Medical Association, said the findings were unacceptable, shocking and disturbing, and that they require immediate attention by the implicated schemes.
[link url="https://www.businesslive.co.za/bd/national/health/2021-01-24-discovery-denies-unfairly-targeting-black-health-practitioners/"]Full BusinessLIVE report (Open access)[/link]
[link url="https://www.pressreader.com/south-africa/sunday-tribune-south-africa/20210124/281509343847466"]Full Sunday Tribune report (Restricted access)[/link]
See MedicalBrief archives:
[link url="https://www.medicalbrief.co.za/archives/inquiry-finds-schemes-discriminated-against-black-healthcare-providers/"]Inquiry finds schemes discriminated against black healthcare providers[/link]
[link url="https://www.medicalbrief.co.za/archives/discovery-rebuttal-of-racial-bias-in-fraud-investigations/"]Discovery rebuttal of racial bias in fraud investigations[/link]
[link url="https://www.medicalbrief.co.za/archives/discovery-rejects-flawed-race-bias-findings/"]Discovery rejects ‘flawed’ race bias findings[/link]
[link url="https://www.medicalbrief.co.za/archives/widespread-and-consistent-racial-bias-by-top-medical-schemes/"]‘Widespread and consistent’ racial bias by top medical schemes[/link]