Simnikiwe Hlatshaneni
Premium Journalist
3 minute read
1 Mar 2019
6:00 am

How you pay for medical aid scams and fraud

Simnikiwe Hlatshaneni

Due to a staggering number of illegal activities, 'medical aid schemes would soon be rendered unaffordable to most private healthcare consumers'.

Health care costs.

Up to 25% of the money you pay for your medical aid is lost through fraud, corruption and abuse, costing the sector over R22 billion a year.

This was according to Katlego Mothudi, managing director the Board of Healthcare Funders of SA (BHF), who spoke to The Citizen during the Council for Medical Schemes’ Fraud, Waste and Abuse Summit yesterday.

This trend meant that medical aid schemes would soon be rendered unaffordable to most private healthcare consumers, Mothudi said.

“Potential saving on contributions, if we eliminate fraud, would be between 5% and 25%,” he said. “We have observed increasing incidents where medical aid members buy cheaper plans to afford membership, or limit or reduce the number of beneficiaries.”

According to the Council for Medical Schemes, the loss incurred by the industry to illicit activity was between R22 billion and R28 billion a year.

Fraud included intentional deception, false statements, or false representation resulting in unauthorised benefit or payment, for which no entitlement would otherwise exist.

Abuse referred to practices inconsistent with sound fiscal, business, or medical practices, resulting in unnecessary cost to a medical scheme, or in reimbursement for services that are not medically necessary.

An example of this was members “stocking up” on medication towards the end of the year to use up benefits for the year.

Waste referred to the extra costs incurred with overuse of healthcare services and incorrect billing.

According to Dr Sipho Kabane, acting chief executive and registrar of the Council for Medical Schemes, the intended outcome of the summit was for industry players to sign a charter as a pledge to combat fraud, waste and abuse in the private healthcare sector.

The council also aims to see the establishment of standards for the industry to effectively deal with fraudulent activities, sanctions for convicted fraudsters, as well as the establishment of a structure dedicated to combating this scourge.

Among those at the summit were the head of the Special Investigative Unit (SIU) Andy Mothibi, who last year established an anticorruption forum, which conducted a vulnerability assessment for the sector.

Speaking during the summit, Mothibi referred to a recent case where an Eastern Cape lawyer was arrested for making six fraudulent claims, totalling close to R90 million.

Last year, audiologist and speech therapist Wandile Theophilus Mashego was sentenced to five years in prison, suspended for five years, after being convicted on 259 counts of medical aid fraud and one count of contravening Section 66 of the Medical Schemes Act.

The case was brought by Bonitas Medical Fund after it was discovered Mashego had been submitting fraudulent claims on behalf of members between 2014 and 2015.

He had allegedly worked with an accomplice who provided him with details of the fund’s members, whom he billed fraudulently for services he never rendered.

Mashego pleaded guilty under Section 105A of the Criminal Procedure Act 77 of 1951 and was given a suspended prison sentence for the counts of fraud. He agreed to refund Bonitas R506 000, perform 16 hours a month of community service and subject himself to house arrest for a period of 36 months.

At the time of his sentencing, Bonitas told that schemes such as his cost the company around R190 million.

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