Medical aid fraud and abuse is costing the sector up to R28bn every year, with some companies saying up to 15% of claims include an element of fraud and abuse, notes MedicalBrief.
In the past year, Medscheme has recovered more than R155m on behalf of the 11 schemes it administers, and reduced billing behaviour over the past two years by more than R3bn.
“That’s just the fraud we were able to identify and prove … the tip of the iceberg,” said Gerda Strydom, general manager at Medscheme Forensics, in a Daily Maverick report.
Medscheme is one of the largest medical aids in the country and responsible for the administration of 11 schemes, including Bonitas, Polmed and Fedhealth, and also provides forensic services to other schemes it does not administer.
The Council for Medical Schemes (CMS) says the sector loses R22bn to R28bn a year in South Africa alone due to fraud, waste and abuse (FWA).
“That’s a conservative estimate because the exact number is hard to quantify. Some companies say anything from 5% to 15% of healthcare claims could include an element of fraud, waste and abuse,” Strydom said.
She added that the fraud triangle – pressure, opportunity and rationalisation – leads to conditions that increase the likelihood of fraud being committed, often by both healthcare providers and medical scheme members.
Types of financial abuse
Strydom said that abuse would include medically unjustifiable claims where a healthcare provider might carry out a valid scan of your leg or appendix, but it’s not justifiable, and there was no good reason to carry out the scan.
However, some “fraudulent” claims arise simply from error. For example, duplicate claims could occur due to system errors or miscommunication between the doctor and the secretary or the billing agency.
“We (Medscheme) pay 40 000 healthcare providers on a monthly basis and accept more than 10 000 claims per day across all 11 schemes, so the volumes are massive.
“Claims are assessed and paid through a set of system rules. Healthcare providers who become familiar with the system rules can take advantage of that to push claims through,” said Strydom.
Greater opportunity
The opportunity for fraud in healthcare was greater than, for example, in the car insurance industry, she pointed out. Before a car insurance claim is paid, an assessor looks at your car, takes photos and assesses the damage. There is proof the car was damaged.
“But that is difficult in the healthcare environment. Healthcare professionals need to be paid before they provide a service, even in the case of hospitalisation or emergency care. So medical schemes must trust medical professionals to be honest, and that submitted claims are valid.
“It is only when trends are identified that we start to investigate by calling for patient files and reviewing doctor behaviour,” she said.
In a recent example uncovered by Medscheme Forensics, a dentist needed to extract two teeth and put in two dental bridges. The member’s limit only allowed for one bridge for that year and a second bridge would have to be paid out-of-pocket.
“In this case, the dentist did two bridges and then told the member he would claim for one bridge in the current benefit year and the second bridge in the next benefit year. The rationalisation is that you could be doing the two bridges over two years, but you are doing the work in one go and spreading the claim.”
See more from MedicaBrief archives:
Medical schemes’ anti-fraud tactics queried at CMS inquiry
Blockchain ‘has potential to curb fraud’ in medical schemes
GEMS to claw back over R100m ‘defrauded’ by private doctors and hospitals
HPCSA disciplinaries from August to November 2022