Medical aid schemes and the Board of Healthcare Funders have rejected damning findings from a long-awaited inquiry into racial discrimination and profiling against black practitioners, but health professionals groups say it confirms the experiences of many black practitioners, notes MedicalBrief.
The long-awaited Section 59 inquiry conluded that black practitioners faced a disproportionately higher likelihood of investigation and sanction.
Discovery, the Government Employees Medical Scheme (GEMS) and Medscheme were found to have acted unfairly and in a “racially discriminatory manner towards black healthcare providers”, reports Business Day.
The independent investigative panel had been appointed by the Council for Medical Schemes (CMS) in 2019 to probe allegations that black healthcare providers were being treated unfairly by medical schemes based on race.
The National Health Care Professionals Association (NHCPA) and Solutionist Thinkers had accused them of bias and discrimination, saying their claims were being withheld based on their race and ethnicity.
According to the CMS, the inquiry thus focused on two issues: whether there was racial discrimination against black healthcare providers; and procedural fairness in the treatment of those black healthcare providers.
Chaired by Advocate Tembeka Ngcukaitobi, and also comprising Advocate Adila Hassim and Advocate Kerry Williams, the panel developed a tool to measure the performance of medical schemes’ fraud, waste and abuse systems, and to look at discriminatory outcomes or unequal treatment for providers.
It found the systems by the schemes to detect and punish fraud were both procedurally unfair and resulted in discriminatory outcomes.
Statistical analysis of risk ratios over several years showed that black practitioners faced a far higher chance of being investigated than their white counterparts, said Ngcukaitobi, who clarified that “black” was used as a generic term encompassing coloured, Indian and black African individuals.
Regarding GEMS, Ngcukaitobi said that in 2014, black dental therapists experienced risk ratios of “between 2.7 and 3.7; in other words, were generally three times – 300% – more likely than non-black dental therapists to be guilty of fraud, waste and abuse (FWA)… so more likely to be investigated and found guilty of FWA”.
For Discovery, black psychiatrists experienced risk ratios of “between 3.44 and 3.77; … were generally approximately three and a half times, or 350%, more likely than non-black psychiatrists to be guilty of FWA”.
And in 2018, black anaesthetists contracted by Medscheme were more than six times (650%) likelier to be found guilty of FWA than non-black anaesthetists.
Ngcukaitobi said the factual evidence was clear, and that “all of the explanations and expert reports given to us by the schemes were not sufficient… to displace the findings that, on the facts, the risk ratios show racial discrimination against black service providers”.
The inquiry also found that FWA processes used to audit and claw back funds from practitioners violated rights to fair treatment.
Ngcukaitobi said the legislation governing these processes, the Medical Schemes Act, lacked clear rules, and schemes imposed their own systems without proper oversight or accountability.
Proposals from the panel included:
• Legal amendments: Overhaul Section 59(3) of the Medical Schemes to include clear procedural safeguards.
• Independent tribunal: Establish a dedicated mechanism to support fraud-accused healthcare providers so they are not left to defend themselves against the powerful schemes.
• Transparency of algorithms: Schemes must disclose the software and artificial intelligence programs used in detecting suspect claims. At present, neither the Health department nor the CMS has any insight into how these systems work or whether they entrench bias. If this cannot be achieved voluntarily, legislative changes must compel disclosure.
• Annual racial monitoring: Yearly assessments by schemes of the racial profile of providers investigated for fraud; publication of the data, broken down by discipline, so discriminatory patterns don’t go undetected for years.
Bullied
According to the allegations, schemes were intimidated and bullied providers through the implementation of their FWA systems, including by refusing to reimburse providers directly, reports Daily Maverick.
“The schemes’ FWA systems all used software or algorithms designed to flag providers suspected of engaging in FWA,” the report found.
“These systems also all used other investigative techniques – staff would receive the details of providers flagged as engaging in suspicious FWA behaviour and thereafter would engage with these providers, often requesting additional information to test if they were correctly flagged. None of the Schemes relied entirely on their software or algorithms to determine if a provider were guilty of FWA.”
After the panel had released an interim report in 2021, with findings of unfair discrimination on the basis of race, various stakeholders – including medical schemes – had the opportunity to make further submissions to the panel in 2021 and 2023, it said.
“In the interim report, we had found … that the FWA procedures for the recovery of money were unfair and violated the rights … of individual practitioners. The schemes should make changes to how they claw back monies they claim practitioners owe them,” said Ngcukaitobi.
“We’ve received further submissions, but remain unpersuaded that our interim findings were incorrect. Accordingly, we confirm the findings and recommendations in the interim report that the procedures followed by medical schemes, when they claw back money allegedly owed by practitioners or where they investigate instances of fraud, waste and abuse, are unfair.”
Health Aaron Motsoaledi said the National Department of Health would study the investigation panel’s findings before issuing an official statement, reports the Cape Times.
“Every South African should be ashamed (that we are) fighting any form of discrimination 30 years after democracy… We feel very bad…and won’t leave any stone unturned.”
The SA Medical Association (SAMA) said the findings “confirm what many healthcare providers, especially black doctors, have endured for years” – unfair targeting and procedural injustices by certain schemes under the guise of fraud detection.
“SAMA has zero tolerance for any form of racial discrimination. Our members have a right to fair treatment, regardless of their race, and patients deserve a health system built on equity and accountability,” said Dr Mvuyisi Mzukwa, chairperson of SAMA.
“At the same time, we acknowledge the importance of tackling fraud in the healthcare system, but this must be done lawfully, transparently and with due process. The panel confirms that this balance has not been achieved.”
The SA Medical and Dental Practitioners (SAMDP) Association also welcomed the report, calling it a “watershed moment” for the profession and country.
“For too long, black healthcare providers have suffered in silence under discriminatory practices that have no place in a democratic society,” SAMDP chair Dr Phashe Magagane said.
“We will not rest until every practitioner is treated with fairness and respect, and every patient receives equitable care.”
“The report confirms what many in our profession have long experienced: systemic and unfair racial discrimination against black healthcare providers by some of SA’s leading medical schemes.”
The SAMDP said the effect of those practices was harming practitioners’ livelihoods and eroding trust in the healthcare system.
SAMDP has called for the Council for Medical Schemes, the Department of Fealth, and medical schemes to swiftly implement the report’s recommendations with clear timelines, take transparent action to end discriminatory practices, collaborate with affected practitioners to shape reforms and establish ongoing monitoring and public reporting to track progress.
BHF rejects findings
However, the BHF said it rejected the panel’s findings, and that while it still needed to study the final report, it was disappointed the panel had upheld the findings made in the interim report released in 2021.
“We believe these are demonstrably and fundamentally flawed and, if allowed to stand, will open the door for runaway fraud and corruption in the healthcare sector,” it said.
Fraudulent claims, over-servicing, abuse of benefits and improper billing practices cost South Africa’s medical schemes about R30bn each year, it added.
“These losses directly impact the contributions and benefits of 9.7m scheme members, most of whom come from historically disadvantaged communities. FWA inflates healthcare costs, reduces member benefits, and drives up premiums, placing disproportionate financial strain on working-class families,” said Dr Katlego Mothudi, managing director of the BHF.
The final report “continues to be underpinned by serious methodological and interpretive flaws, all of which we raised after the release of the interim report in 2021”.
The issues the BHF raised with the panel’s methodology included:
Unscientific methods to assign race, using surnames to categorise providers; failing to account for exposure bias, which occurs when a group is more likely to be involved in a process or activity simply because of greater contact or interaction; and
confusing correlation with causation, by assuming discrimination without “rigorously considering other relevant variables such as provider billing patterns, patient load, or socioeconomic contexts”.
The BHF described the investigation as relying on “unscientific methods” and failing to account for “exposure bias”, which occurs when a group is more likely to be involved in a process or activity simply because of greater contact or interaction.
“For example, one of the large schemes investigated, which is a member of the BHF, serves a member base that is 91% black, which logically results in a higher rate of member interactions with black providers. The result is that black providers appear more frequently in fraud investigations conducted by this scheme, not because of bias, but because it serves a disproportionately large share of scheme members,” Mothudi said.
The investigation, he added, “assumes discrimination without rigorously considering other relevant variables such as provider billing patterns, patient load, or socio-economic contexts”.
According to the BHF, both the board and its members had undertaken “significant reforms to strengthen fairness, transparency and accountability”, including a comprehensive review of fraud, waste and abuse protocols.
“The BHF remains committed to working collaboratively with the CMS, regulators and the healthcare community to strengthen South Africa’s healthcare funding system. While we reject the findings of the section 59 investigation as flawed, we remain steadfast in our pursuit of a healthcare system grounded in integrity, justice and sustainability.”
‘Undermine’ anti-fraud efforts’
CEO of Discovery, Rob Whelan, said the report, if acted upon, risks severely undermining the ability of medical schemes to combat fraud and protect member funds from abuse. He told News24 the scheme strongly disagrees with the investigation findings and is “deeply concerned that the panel’s conclusions are based on flawed methodology, unscientific assumptions, and misinterpretation of complex data”.
“This will ultimately have a direct impact on medical scheme sustainability and result in higher healthcare costs and increased medical scheme contributions for members,” he said, adding that the report “draws numerous conclusions that are not supported by credible evidence”.
“We are currently reviewing it in full and considering our options, including a formal review of the findings.
“No evidence has been presented to support allegations that Discovery Health has 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 medical schemes were legally sound and showed no explicit evidence of racial bias.”
Whelan said the panel found that claims against healthcare providers by schemes administered by Discovery Health “were shown to have legitimate grounds for investigation, with no evidence of racial profiling”.
Since 2019, Discovery Health has undertaken multiple independent reviews of its fraud, waste, and abuse investigation processes.
“None found any evidence of explicit or implicit bias. The results of these reviews – with 14 formal submissions and comprehensive supporting data and analysis – were shared transparently with the panel,” he added.
“The panel’s report relies almost entirely on a flawed and overly simplistic statistical analysis by a single expert. The panel appears to have largely disregarded input from a range of eminent local and international independent experts, including the London School of Economics and South Africa’s former Statistician-General – that the statistical analysis relied on by the panel is unsound and does not support the conclusions drawn.”
Fairness
GEMS principal officer Dr Stanley Moloabi told the Cape Times GEMS is reviewing the report and considering its implications.
“As a responsible and accountable healthcare funder, the Scheme has always supported efforts to ensure fairness and transparency in the industry. We have cooperated extensively and consistently with the Section 59 Investigation panel.”
Medscheme had not responded at the time of publication.
See more from MedicalBrief archives:
5 years on, no report on medical schemes’ racial bias inquiry
Medical schemes’ racial profiling inquiry report delayed
Discovery issues rebuttal of inquiry finding of racial discrimination
Inquiry finds schemes discriminated against black healthcare providers