Red Alert: Non-declaration of medical conditions

Medical schemes have implemented systems to detect non-disclosure and brokers will do well to advise their clients according to prevent the severe consequences that mayfollow.

Medical schemes require that new applicants fully disclose their current medical conditions and any medical consultations in the past twelve months. From this information schemes can then exclude each condition from benefit for a period of up to twelve months.

This is purely to protect current members from new comers who may claim and leave the scheme before they have made substantial contributions to the common fund.

Schemes one step ahead

New applicants often think the best solution is to withhold any information regarding their current medical conditions so that they could benefit immediately from the scheme’s fund. Applicants may even receive such unwise advice from their brokers who are so eager to sign up members in order to receive commission.

Medical schemes employ various mechanisms to detect cases of possible and actual non-declaration. There are a couple of smart IT solutions that assist schemes in alerting the fraud and forensic unit of suspected cases.

Severe consequences

Not declaring one’s medical condition also adversely impacts on the opportunity of receiving appropriate advice on the most suitable option to choose. In addition, members who do not declare medical conditions often find themselves having to pay huge hospital bills which the scheme may decline to settle should non-disclosure be established.

In addition, it is far better for clients to start off with an honest relationship - one never knows at which stage a client may desperately need the scheme’s lenience in a serious case where he/she may have run out of benefits.

The penalties for confirmed cases of non-declaration may include termination of membership, sometimes following several months of contribution payment. Members found guilty of such transgressions may also be posted onto a fraud database open to all subscribed schemes. This may make it difficult for an offender to ever be allowed onto any medical scheme again. The scheme may also flag such a member on the system to always require additional collateral information from previous doctors before an authorisation is granted. This may negatively impact the intention to deliver a hassle-free service to such a member.

Non-declaration is fraud

Applicants intending to defraud medical schemes by claiming for conditions that they have not declared are running a huge personal risk. The current IT solutions are well ahead of such offenders.

Brokers should spare no effort in explaining the possibly dire consequences of non-declaration of medical conditions to their clients, to avoid being caught up in the middle of a cancelled policy or, worse, a claim repudiation when the client needs it most.