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SUB CATEGORIES General  |  HIV |  Medical Schemes | 

Medical fraud costing schemes R22-billion each year

20 March 2013 Graham Anderson, Profmed
Graham Anderson, Principal Officer at Profmed

Graham Anderson, Principal Officer at Profmed

Fraud committed by those in the healthcare industry is reported to be costing medical schemes a massive R22billion a year – according to recent reports – with the result that scheme members are paying far more for their medical insurance than they should.

Graham Anderson, Principal Officer at Profmed, the medical scheme that caters exclusively for graduate professionals, says the extent of fraud was released at a conference hosted by the Board of Healthcare Funders (BHF) last week, is hugely concerning. “The medical scheme industry has been aware for years that fraud is taking place, and that it happens on a huge scale. However, these estimates, which were based on more than two years of medical scheme data, suggest that every medical scheme member is paying at least R2 500 per year towards fraud.”

According to Anderson, while many people assume that fraud is most common among consumers (i.e. the medical scheme members); the reality is that the majority of fraud is in fact committed by service providers. “Examples presented at the conference include doctors billing medical schemes for more than 100 appointments in a single day, or colluding with patients with the result that male patients claimed for hysterectomies, and some specialists billed medical schemes three times for the same procedure.”

“It is often easiest for those working within the industry to commit such crimes as they have access to all of the relevant information and understand the systems better. Accounts charged to medical schemes on the members’ behalf can easily be inflated without the member’s knowledge to include procedures that weren’t carried out, a higher price charged for equipment or medication that was used, or even charging for items that were not used,” Says Anderson.

Anderson says, very often, members don’t check the accounts charged to their medical scheme, firstly as it appears too complex to decipher and, secondly, the payment is being settled by the scheme itself. “However, the fact is that if a provider is fraudulently overcharging, this can have a severe impact on the level of benefits that a member has available for the rest of the year, potentially depleting their benefits far sooner than would otherwise occur,” he says.

Anderson says while medical costs and the terminology used may seem complex; it is actually no different from checking the statement at a garage after a car has been taken in for a service to ensure that what you are being charged for has actually taken place.

He says it is crucial that members check what is being claimed for from their scheme by the service provider and determine whether this matches up with the treatment they have received. “Ultimately, it is the members who are most affected by fraud in the industry as it results in an increase in costs with the end result being that all members are charged a higher premium.”

There are systems and processes in place to address this issue, including a monthly meeting held by the Board of Healthcare Funders (BHF) of the Fraud Management Unit, in which all BHF scheme members meet to discuss the problem and share information. This ensures that providers or members are not attempting to replicate fraudulent activities at multiple schemes.

The Competition Commission is also expected to begin an inquiry into the healthcare sector, to ascertain levels of pricing and possible corruption, following an amendment the promulgation of the Competition Amendment Act.

“The extent of fraud in the industry is significant and it is in the interests of all schemes, members and providers to work together to stamp out fraud in the medical scheme industry to ensure any increases in healthcare costs can be kept to a minimum,” concludes Anderson.

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