In the media

Medscheme recovers millions in healthcare fraud, waste

19 March 2018

Anthony Pedersen

JOHANNESBURG - Medscheme, South Africa’s largest manager of medical schemes, has recovered over R107 milllion claimed fraudulently and through waste or abuse and more than R300 million in reduced claims through forensic interventions, the company said on Sunday.

“Using the company’s robust data analytics system, Medscheme was able to identify claims that fell outside the average patterns. Investigations into these claims confirmed fraud and abuse,” said Anthony Pedersen, CEO of Medscheme, a subsidiary of AfroCentric Group.

Pedersen urged customers to take an interest in, and thoroughly examine their statements as well as understand what service their medical schemes were being charged for.

“We received more than 1500 calls from whistle-blowers alerting us of potential fraudulent, wasteful, or abusive conduct committed against medical aid funds. This is important, as ultimately the customer pays for the fraud, waste, and abuse or any increasing costs through high annual increases of the premiums,” Pedersen said.

“It is a pity that as long as a medical scheme continues to pay, patients never ask whether the physiotherapist or dietician at the hospital was actually a necessary expense to incur or if the pharmacist has dispensed the generic but claimed for the more expensive original, or if your medical scheme also paid for that pathology account you keep getting in the mail,” he said.

Fraud, waste, and abuse were defined as intentional deception or misrepresentation that a person knew to be false or did not believe to be true, misreporting data to increase payments, paying kickbacks to providers for referring patients for specific services or to certain entities, or stealing providers' or patients’ identities.

Medscheme administered both open and closed medical schemes. The company’s data analytical capabilities enabled it to not only provide strong end to end health administration and managed care, but also to deal with fraud. The software detected irregular claims and ensured only valid healthcare claims were paid to healthcare providers and facilities.

With 13 forensic clients and over 1.8 million lives on a single analytical platform, Medscheme enjoyed strong insight into the claiming patterns and behaviour of any healthcare provider, pharmacy, or hospital in the country, Pedersen said.

According to the Board of Healthcare Funders, it was estimated that at least 10 to 15 percent of all claims were fraudulent, abusive, or wasteful in nature, a substantial expense in a R150 billion industry.

Pedersen urged members of medical aid schemes to help ensure that they did not become victims of medical aid fraud, waste and abuse by:

–	Treating the medical aid number like a credit card. Never give it out over the phone unless you initiated the call. If the card is lost or stolen, report it immediately to the scheme;
–	Not to accept free medical services or equipment in exchange for a medical aid number. Unscrupulous companies or individuals could use this number to bill for services or products you did not receive;
–	Review medical aid statements closely and keep a watch for services paid for but never received; and
–	If one suspects fraud, report it immediately.

“Every person who pays for healthcare benefits, every business that pays higher insurance costs to cover their employees, and everyone who pays medical aid is a victim,” Pedersen said.