Medical scheme fraud hurts everyone

Medical scheme fraud is a growing problem in the South African healthcare system. Fraud negatively affects medical schemes, their employees and their members, leading to increased member contributions and financial losses. Rampant dishonesty can place an entire medical scheme and its members at risk if it is allowed to continue unregulated.

Fraud involves a range of dishonest activities committed by members, healthcare service providers, employees and other stakeholders of the Scheme, and it presents itself in a myriad of ways.   

A particular type of fraud - which members may view as a petty offence but the Scheme takes extremely seriously - involves members who do not disclose information about an illness or condition and are therefore falsely accepted onto the Scheme. Acceptance of applicants who are ineligible (or at a greater risk than normal), because of false or concealed information, has a very negative effect on medical schemes. This is because contributions are based on the applicants' being in average good health and employed in non-hazardous environments. 

An example of this would be a member, Sipho (not his real name), who registers his mother as a beneficiary. However, Sipho disregards mentioning on the application form that his mother has a heart condition and is scheduled for an operation in three months.  The mother is accepted onto GEMS and three months later she is admitted into hospital for her procedure. Soon after the procedure is performed, Sipho swiftly removes his mother as a beneficiary from the Scheme. Such adverse behaviour is an abuse of benefits and constitutes medical scheme fraud. Furthermore, innocent members ultimately suffer as it results in higher contributions for all members and the Scheme not being able to meet its reserves.  Reserves are important for keeping a medical scheme sustainable as it provides further security that the Scheme will be able to cover claims from members and service providers.

GEMS therefore follows a zero tolerance approach to medical scheme fraud. The GEMS Fraud Forum investigates all allegations of fraud thoroughly and effectively. Members found guilty of fraud face a number of dire consequences. These include the termination of their GEMS membership, being reported to their employer and thereby having their subsidy cancelled, having the losses incurred by the Scheme recovered through a civil or criminal process and facing a criminal case. And if this fraudulent behaviour continues among members, the Scheme will be forced to introduce restrictive measures, such as waiting periods and underwriting for members.

We all have a responsibility to report fraud and protect the Scheme. The Scheme has a confidential toll-free 24-hour call centre where you can anonymously report all instances of fraud. To report fraudulent activities, please call 0800 21 22 02 or post the details to Fraud Services Manager, KPMG Hotpost BNT371, PO Box 14671, Sinoville, 0129.

Protect your benefits and your Scheme by joining the fight against fraud!