Tuesday, 25 June, 2024
HomeA FocusMedical schemes deny ‘racist’ algorithm claim

Medical schemes deny ‘racist’ algorithm claim

Medical schemes this week came out fighting against allegations of racial discrimination, rejecting concerns by the Council for Medical Schemes (CMS) about possible bias in the algorithms they use to detect fraud.

But, notes MedicalBrief, black doctors insist that there is intentional racial profiling in the industry and told a virtual hearing into an independent panel’s interim findings that black doctors were more likely to be investigated for fraud, waste and abuse, that they were being used as 'scapegoats'.

News24 reports that the schemes deny their bots even know a person’s race, saying they only pick up suspicious trends, and should not be blamed for trying to prevent abuse of members’ funds and root out fraud, according to the lawyers of medical aid representative body, the Board of Health Funders of Southern Africa (BHF).

Defending its members against the Section 59 Investigating Panel Commission, which in 2021 suggested there might be unfair racial discrimination against black medical providers, the BHF’s lawyer, Advocate Bruce Leech, said trustees faced onerous requirements under the Medical Schemes Act to preserve medical aid assets, a fact completely ignored by the panel’s interim report, he added.

The independent panel, commissioned by the CMS, this week held hearings into its 2021 investigation which found evidence showing that Discovery, Medscheme and the Government Employees Medical Scheme (GEMS) were more likely to find black service providers guilty of fraud, waste and abuse.

But the body representing black and Indian medical practitioners says they are used as scapegoats to prop up medical schemes' reserves, a second News24 report says.

The Solutionist Thinkers Group, which represents 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 in a twist of events, the Solutionist Thinkers Group is further pointing fingers at the CMS, too, saying that the regulator has played a big part in perpetuating an unjust narrative that undermines trust and confidence in black participants in the private healthcare system.

The chairperson of the Solutionist Thinking Group, Nomaefese Gatsheni, told the independent panel on Tuesday that the CMS had ignored its requests to meet and decide the way forward since the publication of the 2021 interim report.

She said it had been "business as usual", and criticised the relationship between the CMS and schemes. Gatsheni believes rather than seeing an improvement, some of the fingered medical aids are becoming "worse" in terms of requesting "unfair audits" on black practitioners.

"The Solutionist Thinking Group strongly believe there is intentional racial profiling of black healthcare providers by the schemes such as Discovery, Medscheme, and GEMS. The purpose behind this profiling was to hinder the growth and expansion of black healthcare practices," she said.

Gatsheni takes issue with the fact that the CMS did not meet with the Solutionist Thinking 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 regular had not adequately probed fraud, waste and abuse of the system by the medical schemes and their administrators.

Gantsheni said: "We refuse to be used as scapegoats for mismanagement of schemes' funds by the schemes and their administrators. We are aware that money extorted from us is used to secure schemes' reserves."

Gatsheni went on to allege 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, have led to some of its members taking their lives.

She said some schemes have pulled back on those clawbacks and "unfair audits" since the 2021 interim report, but alleged that Medscheme had "moved from better to worse".

Medscheme said all 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 that 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. She said Discovery Health is "on and off". But while she still considers it "brutal", it no longer audits as many Solutionist Thinkers Group members as it used to.

The panel surveyed cases between 2012 and 2019 and flagged a “substantial difference” in fraud, waste and abuse outcomes between black and non-black practitioners.

But it did not find evidence of “deliberate unfair treatment”, saying, rather, that the evidence suggested unfair discrimination was the outcome of medical schemes’ processes.

Despite the accused medical schemes protesting that the interim report contained numerous factual inaccuracies and other irregularities, the panel’s hearing this week did not accept new factual submissions. It would accept only legal submissions on procedural irregularities of the Section 59 investigation process.

Still, the schemes told the panel they believed R22bn to R28b of the R160bn in claims paid out by local medical schemes during the period under the panel’s review question should not have been paid out.


Leech said that to process claims within a reasonable time while preventing possible fraud and abuse, medical schemes automate their processes and rely on algorithms to raise any flags.

“They cannot … employ thousands of people to manually go through each of the thousands of claims received on a daily basis,” he said.

But the industry now also amalgamates data so that these algorithms can better track suspicious practices by looking at providers’' behaviour across different medical schemes.

He added that the algorithms only look at medical service providers’ practice codes. Those codes are non-identifiers, as they don’t know who the provider is, where they are based, or what their race is.

He said if the panel alleges that automating the claims and fraud prevention processes leads to unfair discrimination of black service providers, they should suggest to the industry what the alternative should be. But the BHF believes that there is no realistic option.

“There is a gap in the report – an interpretation of Section 59 on a very limited basis.”

But panel chairperson Advocate Tembeka Ngkukayitobi said they extensively explored the role schemes must play to protect their members, and believed there were biases in the algorithms.

Discovery Health said it went back to study its algorithms and asked additional external experts to review them.

Medscheme, which administers Bonitas, Fedhealth and many others, said the panel’s investigation was incomplete and based on incorrect facts.

However, one of BHF’s members, Polmed – administered by Medscheme – said that because some administrators source their algorithms from overseas providers, there needs to be a critical review of the input values that go into them so that they will be aligned with SA’s demographic variations and the cost of providing healthcare in outlying underserviced rural areas.


News24 article – Medical schemes reject claim that 'racist' algorithm flags more black doctors for fraud (Restricted access)

News24 Black doctors used as 'scapegoats' to prop up medical schemes' reserves, says representative body

See more from MedicalBrief archives:


Medical schemes’ racial profiling inquiry report delayed


Inquiry finds schemes discriminated against black healthcare providers


Discovery: R568m recovered but billions still lost to medical aid fraud


Report into claims of racial profiling by medical schemes ‘indefinitely delayed’




MedicalBrief — our free weekly e-newsletter

We'd appreciate as much information as possible, however only an email address is required.