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Medical schemes regulator calls for clarity on how and when medical schemes can withold or refuse payments

31 July 2019 Council for Medical Schemes (CMS)

The Council for Medical Schemes (CMS) has called for clarity on how and when medical schemes can withhold payments to medical practitioners when suspecting fraud and abuse of funds.

Giving evidence at the Section 59 Investigation Panel into allegations of racial profiling against black and Indian private medical practitioners, CMS Chief Executive and Registrar, Dr Sipho Kabane, said some sections of the Medical Schemes Act presented challenges on how to handle suspicions of fraud, waste and abuse of medical scheme funds. 

“These sections state that the scheme will, at its discretion and based on justifiable reason, reject all claims in respect of services obtained from a provider where it can be shown on probable cause that such provider has placed the scheme or other schemes at risk,” Dr Kabane told the Section 59 Investigation Panel chaired by Advocate Tembeka Ngcukaitobi. 

The investigation, commissioned by the CMS,  follow allegations made by medical practitioners who claimed that they had been unfairly treated and their claims withheld by medical schemes based on the colour of their skin and ethnicity. 

 “What concerns us about this section relates to the power it affords the scheme to stop paying claims to a provider on the basis of probable cause without being found guilty in a court of law. The scheme furthermore implements this decision without approaching the provider and giving them the opportunity to provide justification for its claims submitted to the scheme,” said Dr Kabane.

Until Friday this week, the Section 59 Investigation Panel, is hearing submissions from regulatory bodies and organisations representing medical practitioners. 

 “We appreciate that this investigative panel has been set up to look into these serious allegations of racial profiling, blacklisting, bullying and coercion. We are hopeful that the investigation will get to the bottom of these allegations. 

“We share the view that Section 59 read with Regulations 5 & 6, as it is currently articulated presents challenges for all stakeholders, including the CMS and needs to be urgently amended. Some of the challenges include:

  • Lack of clarity on acceptable practice around fraud detection; lack of clarity on when and how claim related audits should be conducted;
  • Lack of clarity on what service providers should do for a guaranteed exclusive payment;
  • Lack of clarity on the legality and conditions for blocking of payments and blacklisting of service providers;
  • Lack of clarity on the legality, conditions and terms for claw backs and
  • Lack of clarity on engagement between schemes, administrators in dealing with suspected fraudulent claims.

“We will welcome the recommendations that will give direction to the stakeholders including CMS on how to deal with the challenges that we have articulated,” said Dr Kabane. 

The public hearings are being held at CMS’ offices in Centurion.  Advocate Ngcukaitobi is supported advocates, Adila Hassim and Kerry Williams. 

This phase of public hearings will be continue until Friday. Thereafter medical schemes , medical scheme administrators  will give their oral evidence until the end of September. The preliminary report will be delivered by the Investigating Panel on 1 November 2019, and open for comment until 30 November 2019.

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