Healthcare – Healthcare fraud, waste and abuse (FWA) continue to drain the healthcare industry's resources, ultimately imposing undue costs on the health citizens who are the users of health services.
The Board of Healthcare Funders (BHF), the biggest representative body of the healthcare funding industry in Southern Africa, will host the Healthcare Forensic Management Unit (HFMU) Fraud, Waste, and Abuse Indaba on 23 November 2022 to address the challenges of fraud, waste, and abuse in a post-COVID-19 context.
The HFMU Fraud, Waste and Abuse Indaba will be hosted against the backdrop of International Fraud Awareness (13–19 November 2022); a global effort aimed at minimising the impact of fraud by promoting anti-fraud awareness and education. This is done by encouraging everyone to be a fraud fighter and educating citizens about the effects of fraud on the economy, communities, and people.
The Council of Medical Schemes (CMS) estimates that healthcare fraud costs the South African healthcare industry between R22 billion and 28 billion each year. As an industry umbrella body that is cognisant of the debilitating impact FWA has on the industry, the BHF has developed tools that consists of a secure online portal which enables stakeholders, including health citizens, to anonymously upload and report suspicious activities by either a health practitioner, a service provider, or a scheme member. The anti-fraud tools also include a hotline number, namely 080 847 4368, that whistle blowers can call to anonymously report suspected incidents of FWA.
In the US, healthcare fraud is estimated to cost the country about $68 billion a year, which is about 3% of its $2.26 trillion healthcare budget according to estimates from the National Health Care Anti-Fraud Association, an organisation that monitors healthcare fraud.
It is estimated that on average, companies lose about 5% of their annual revenue due to fraud each year.
Dr Katlego Mothudi, Managing Director of the BHF, says FWA represents the unholy trinity that drains the limited resources available in healthcare and leads to hikes in medical scheme contributions, thus rendering healthcare more expensive and inaccessible.
“Fraud, waste and abuse is the scourge that continues to plague the private healthcare industry and overall health system at large. We need to debunk the myth that FWA is a victimless crime – the victims who are paying the ultimate price for the prevalence of such malfeasance are the beneficiaries who not only have to put up with exorbitant increases in contributions but are also deprived of other value added services. The unabated prevalence of FWA threatens to cripple this industry, which is forced to absorb increases in the costs of medical supplies and services,” says Dr Mothudi.
Dr Mothudi says delegates at the Indaba will explore innovative ways to counter FWA so that medical schemes can provide quality, cost-effective, and affordable healthcare.
The upcoming HFMU FWA Indaba will consist of a panel discussion on critical legislation addressing FWA, and presentations on various topics including, among others, healthcare fraud trends to watch in Southern Africa and strengthening leadership and governance to address FWA. The session will also discuss legislation around FWA in the context of South Africa’s National Health Insurance (NHI), with case studies from countries in the region.
Among other discussion topics, the session will feature real life stories that showcase the impact of fraud and corruption and insights from the Special Investigation Unit (SIU) on Tackling endemic levels of fraud and corruption in South Africa.
Speaking about the upcoming Indaba, Dr Odwa Mazwai, Managing Director of Universal Care, notes that though the industry has agreed that governance and judicious leadership are indispensable in preventing FWA, integrating prevention, detection and response tools and capabilities into the healthcare systems is crucial.
“This means that our systems need to be equipped with an early warning system that prevents malfeasance from taking place, that alerts us when these misdemeanours are taking place, and provides a quick response,” says Dr Mazwai.
He concedes that FWA would be difficult to manage in the current context where different schemes utilise disparate legacy systems that don’t talk to each other, share information, or lack capabilities to detect fraud.
“This has created the opportunity for these crimes to take place and to fester. In addition, those who commit FWA are emboldened to continue because the industry does not impose harsh and severe punishment to those implicated. When people think that they can get away with a crime because of lack of consequence management, there is nothing that can dissuade them from committing crime,” says Dr Mazwai, adding that members have the civic responsibility to report fraud by checking their statements regularly and reporting any anomalies.
Dr Hleli Nhlapo, Managing Director for Dental Information Systems (DENIS) and HFMU Chairperson, points out that FWA has grown in sophistication to become part of organised crime that is driven by syndicates.
“Overall, there has been a big shift towards more organised fraud, such as identity theft, where fraudsters use the identities of other providers to submit claims. This was not only on isolated identities, but those of doctors either dead or overseas or across provinces, being used to submit significant volumes of false claims. Some cases have also included theft of members’ identities,” says Dr Nhlapo.
He notes that although the impact of FWA on the industry is less than the R22 billion impact estimated by the Council for Medical Schemes (CMS), due to a reduction in consultations and utilisation during the COVID-19 pandemic, FWA is evolving in different forms.
“Over the past 18 months we have seen new patterns of fraud and abuse emerging in healthcare. On the provider side, HFMU research revealed differing trends in the misdemeanours identified. During the pre-COVID-19 period, from January 2018 to March 2020, general practitioners, pharmacies, and psychologists topped the list, only to be overtaken during COVID-19 (April 2020 to June 2021) by the discipline of speech therapy and audiology, with dieticians not far behind.
“The HFMU discovered that audiologists’ rise in the reported fraud case charts, starting pre-COVID-19, was partly due to provider claims for expensive hearing aids which were charged at up to five times more than the cost of actual devices that patients were being given or where claims were wholly fictitious. Statistics revealed by the HMFU indicate that false claims – submitting a claim without rendering a service – still heads the list of fraudulent activities, averaging 72% of the total cases investigated since 2019,” says Dr Nhlapo.
He says that if losses incurred through fraud, waste and abuse could be curtailed, it could translate to as much as a 10% reduction in members’ monthly contributions and will also provide the schemes with the leeway to introduce enhancements in their benefits.