By Junior Biola
Last year, fraud and abuse of medical aids resulted in a loss of R22 billion for medical scheme funds according to The Board of Healthcare Funders – a loss which could be avoided with the implementation of fraud mitigation services.
Medical aid fraud is certainly nothing new: for years, medical schemes have railed against members collaborating with medical practitioners – from doctors to pharmacists – for personal gain. There are the members who convince practitioners to admit them to hospital, for example, and pocket the monies received from their hospital cash back plans; the pharmacists who bill their customers for ‘medicine’, when their baskets are in fact filled with non-medicinal items; or even the practitioners who bill patients for treatments which never take place.
Since the advent of the Covid pandemic, such activities have escalated. In fact, it is no longer rogue pharmacists or practitioners taking advantage of medical aids; the industry is now affected by dishonest members and criminals using stolen cards to deplete medical savings accounts or take advantage of benefits.
The results are catastrophic for an industry which is frequently accused of charging members exorbitant fees. In truth, players are under siege from the steeply rising costs of healthcare, and while they are doing their best to limit the impact on members, this is no easy task when those very members are, in effect, stealing from the scheme through fraudulent claims.
The impacts are far-reaching for all stakeholders. Medical funds have no choice but to raise the price of contributions – after all, they need to maintain a steady pool of funds in order to be able to pay out claims, and if members are dipping into that pool for illicit reasons, it needs to be replenished. Naturally, this affects members severely, especially as many are already challenged by the rising cost of living. On the other side of the equation, practitioners also take a hit: when the pool of medical funds decreases, a less profitable practice is inevitable.
The prevalence of fraud is understandable when you consider that few controls are in place to prevent it. Think of the average consumer entering a retail chain pharmacy, for example: they may be asked to present their loyalty card, and while this may be considered a form of identification, the reality is that it is rather ineffective as a verification tool. The absence of an identification photo means that the purchaser could well be someone besides the patient for whom the script was written; nor is there anything to stop them from adding over-the-counter items to purchase and claiming them from their savings.
The good news? Fraud mitigation is both effective, and simple to implement. Establishing a ‘safety net’ of identity and biometric recognition makes it possible for medical schemes to ensure that members claim only for medicines and treatments they have been prescribed, while also protecting against scripts that have been falsified.
The result? A healthier medical aid industry – for the benefit of all.
Junior Biola is CEO of Johannesburg-based fintech company, Bitventure, a provider of state-of-the-art real-time automated verification and payment solutions. www.bitventure.co.za
