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Medical scheme fraud

The Board of Healthcare Funders of Southern Africa (BHF) estimates that medical schemes lose R22 billion a year to fraud. During the BHF annual conference, actuaries estimated that medical fraud made up as much as 15 percent of medical schemes' expenditure a year. The Health Monitor Company, which probed fraud in the medical industry, found one neurologist in KwaZulu-Natal whose admissions were emergencies 98 percent of the time. The neurologist happened to charge 300 percent of schemes' tariffs and, as emergency admissions fall under prescribed minimum benefits (PMBs), medical schemes could not say no.

A dietician was seeing each beneficiary 50 to 70 times a month. Another doctor was billing for 56 hours a day, every day. How did the medical schemes not smell fraud from a mile away? The Health Monitor Company chief executive Christoff Raath, who investigated the fraud together with Barry Childs of Lighthouse Actuarial Consulting, explained that it was difficult to pick up fraudulent claims if the doctor claimed from different medical schemes.

Raath said the only way fraud could be detected in this case was if those schemes collaborated in verifying claims or if they belonged to the same administrator. Administrator Medscheme found that some doctors were abusing the coding system, using certain codes in every case, whether they were applicable or not. Simon Dreyer, a healthcare actuary at Medscheme, said the scheme had implemented a system of provider profiling to combat fraud. When the administrator identified a provider that constantly charged much more than its peers, it would investigate the provider further. As a result, Medscheme had reclaimed R2.4 million from one orthopaedic surgeon. The actuaries said the other problem was that the Health Professions Council of SA appeared to be acting very slowly against members who were investigated or proven to be committing fraud.

Business Watch: Business Report, 20 August 2013