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Crime and Fraud
Sunday, February 1, 2004
Schemes on schemes

Administrators and medical aid schemes have clubbed together to launch a new ‘fraud busting’ service called Forensic Management Unit (FMU). It is being run by Metropolitan Health Group (MHG), Old Mutual, Discovery, Medihelp and other schemes in collaboration with the Board of Healthcare Funders (BHF).

They reckon fraud accounts for 20% of the more than R40 billion annual private healthcare bill, and is escalating.
Esther van der Merwe, Manager of Forensic Services at MHG says, “The situation has become so bad that we have decided to share information” in a bid to close the noose around those who continue to siphon funds out of the health industry, despite huge resources being spent on combating fraud.
Pharmacists, doctors, brokers and even the employees of some healthcare schemes are all being accused of defrauding the industry of up to R12 billion of annual healthcare. 
In 2001 MHG says it recouped nearly R10m, excluding hospital savings, on behalf of 21 client schemes. In the year to April 2002, hi-tech analysis of data gleaned from behavioural patterns amongst members and service providers enabled its team to retrieve a further R4,7m. Its parent company New Africa Capital, saved a further R1,4m between September 2002 and June 2003 in hospital costs through its Qualsa Health Risk Management Specialists..
It says its process of detecting fraud and irregularities, and making recoveries sometimes involve civil action, reversal of claims or upfront rejections, and some cases are reported to the appropriate regulatory bodies, including the SAPS. “But,” explains Roy Rensburg, manager of Qualsa’s Clinical Forensics Division, “it is difficult to put a finger on the extent of savings because there is also what we refer to as the ‘halo’ effect.
“Just like people are unlikely to jump red robots if they know there is a camera in place, our initiatives have a similar effect. Members and service providers who might have had the intention of being creative with their accounting, tend to back off when they have to deal with our investigators who consistently execute our fraud policy.”
Aside from the submission of fictitious claims, abuse also occurs through the deliberate over-servicing or over-dispensing of medicines. The industry is also seeing manipulation of benefits by the misrepresentation of the nature of the services, or where the claim dates are fraudulently changed and resubmitted in the new benefit year.
Mr Rensburg notes that where risk-sharing arrangements are in place as opposed to the fee-for-service arrangement, under servicing of the patient can also occur.
He says that fraud is facilitated by ineffective risk management programmes or controls, and poor business ethics. “We used to see some pilfering but not the extent to which we see it now. This is why we are all working together under the BHF banner to try and eradicate the scourge of fraud.

Copyright © Insurance Times and Investments® Vol:17.1 1st February, 2004
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