Annual Medical Aid Fraud could top R19.5 Billion

It is estimated that at least 7% of medical aid claims are fraudulent and the figure might be as high as 15%, according to Dr Hleli Nhlapo, deputy chair of the Healthcare Forensic Management Unit (HFMU) of the Board of Healthcare Funders of Southern Africa (BHF).

This places the estimates on the R130 Billion spent on medical aid per year at between R9.1 and R19.5 Billion of fraudulent claims per year.

Healthcare provider fraud, along with waste and abuse, has a dramatic impact on the already constrained resources of the medical schemes industry, Nhlapo cautioned at the 16th annual BHF conference.

“Approximately R130bn per year is spent in the private healthcare sector in South Africa. If 10% of claims are fraudulent, it means fraud costs us R13bn per year,” said Nhlapo.

He said every scheme is affected and called on the industry to work together “to combat this scourge”.

He added that the vast majority of healthcare service providers are honest, caring professionals with their patients’ best interests at heart.

“The few outliers – often operating in syndicates – do considerable harm, however, and operate under the radar by committing high-volume, low-value fraud, rather than low-volume, high-value fraud,” he said.

Examples

Using dental fraud as an example he cited the many shapes and forms fraudulent behaviour can take.

These include, among others, billing for services not provided, reporting higher levels of service than those delivered, submitting claims in one name when services were provided to someone else, billing for services not covered by making them appear to be covered services, and changing the date of service so that it falls within the patient’s benefit period.

“All schemes have arrangements in place for the prompt reporting of suspected fraud and 94.1% ensure that counter measures are discussed at board level and have a fraud policy in place, be it formal or informal,” said Nhlapo.

However, only 29% of schemes use estimates of losses to make informed judgements with regard to budgeting for counter-fraud measures and only 29% provide specialist training for their workforce dealing with fraud.

“Partnering with the HFMU will help all of us achieve our main objective, which is to eradicate the risk associated with fraud, waste and abuse via information sharing,” he said.

Fin24