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Combating healthcare fraud

01 October 2007 Chris van Rensburg, TransUnion

Every year between R4 billion and R10 billion is lost as a result of member and medical practitioner fraud, an unrecoverable expense that has a disastrous impact on the country, the economy, many organisations and every consumer.

South Africa’s growing healthcare bill could be slashed considerably if the reduction of fraud is successfully achieved," says TransUnion Healthcare and Insurance Executive, Chris van Rensburg.

Investigations have revealed that healthcare fraud is being perpetrated by both members and service providers, which is contributing to the increases in medical scheme contributions.

Case studies

Fraud is perpetrated in many ways in the industry. One common example involves practices providing medical aid members with sunglasses on a regular basis and submitting claims to medical schemes for prescription spectacles.

Pharmacies also participate in fraudulent activities, for example, supplying medical scheme members with non-claimable items and then submitting claims for claimable items.

In one case, a dentist performed teeth whitening under the pretence of supplying the member with a bite plate for grinding problems. Teeth whitening is a cosmetic treatment, but the claim was submitted for a justified dentistry procedure.

Dual membership across medical aid schemes also provides an opportunity for fraud. Individuals are not allowed to have dual medical aid cover, as this results in a member undergoing a medical procedure and submitting a claim to both medical aid schemes.

Industry initiative

In an effort to address the situation, a much needed industry initiative has been created under the auspices of the Board of Healthcare Funders and is managed by TransUnion. The initiative enables all industry players, stakeholders and governing bodies to proactively curb the threat of potential fraud in a data sharing initiative known as the Medical Schemes Forensic Database.

The Medical Schemes Forensic Database allows members to pool their information to achieve a collaborative account and 360 degree view of potential fraud. The pooling of information facilitates better forensic efforts and the reduction of investigative costs, in an attempt to eradicate the growing threat of potential fraud and improved risk management.

Wide-ranging benefits

The benefits for members of the Medical Schemes Forensic Database include the streamlining of decision making, improved claims processing, the identification of industry trends, the minimisation of losses and the reduction of costs. Furthermore, the data-sharing initiative now enables members to identify claimants with dual membership and the ability to track membership histories across medical schemes.

Success

"The Medical Schemes Forensic Database is one of the industry initiatives that highlight the benefits of datasharing. The benefits to the industry are steadily increasing and the fight against fraud is becoming more successful,’ says van Rensburg. ‘Furthermore, there is a perception amongst perpetrators that the industry is becoming a risky target. There is now a stronger emphasis on investigation and the schemes are becoming more organised which makes it much harder for theft and syndicate crime to remain undetected."

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