Tag: healthcare fraud waste and abuse

Categories : Ethics and Law Medical IndustryTags :

The Impact of Fraud, Waste, and Abuse on Medical Scheme Members and Strategies for Industry Reform

On By ModernMedia
Photo by Jp Valery on Unsplash

South Africa’s medical schemes industry is taking a strong, zero-tolerance stance against fraud, waste, and abuse – practices that are undermining the healthcare system. Fraudulent claims, unnecessary procedures, and mismanagement of resources are costing billions of rand, inflating healthcare costs, and putting additional financial strain on members. Instead of supporting essential treatments and care, these resources are being misused and misallocated, writes Dr Katlego Mothudi, Managing Director at the Board of Healthcare Funders (BHF).

At the recent BHF Healthcare Collab Hub, industry leaders highlighted the need for immediate reforms to curb these harmful practices and safeguard the future of medical schemes. As healthcare costs continue to rise, tackling fraud (deliberate deception), waste (inefficient use of resources), and abuse (excessive or improper use of services) is essential for ensuring that medical schemes remain affordable and sustainable. Without swift action, members may face higher premiums, with fewer resources available for the critical care they depend on.

Fraud, waste, and abuse (FWA) in the healthcare sector is not just a regulatory issue or an administrative headache, but a direct assault on the wellbeing of medical scheme members. Every fraudulent claim, and every misuse of resources, drains the pool of funds that are meant to ensure that individuals have access to necessary healthcare services. For millions of members, the repercussions of unchecked FWA include increased premiums, reduced benefits, and the potential for schemes to become financially unsustainable. It is a burden borne by all members, regardless of whether they have directly engaged with healthcare services or not.

The healthcare industry, specifically medical schemes and their administrators, has a significant responsibility to address this problem head-on. Their duty extends beyond managing funds – they are custodians of a system designed to protect individuals’ access to essential healthcare services. 

If these schemes fail to adequately combat FWA, the entire medical scheme ecosystem becomes compromised, undermining trust in healthcare funding and leaving members exposed to higher costs and decreased quality of care.

The ripple effect of FWA

The scale of FWA in the medical schemes sector is staggering. According to industry reports, billions of rands are lost annually to fraudulent activities. Whether through inflated billing, unnecessary procedures, or outright false claims, these actions take funds directly from the pockets of members. Medical schemes are forced to increase premiums to cover these losses, meaning that honest, hardworking individuals are paying more for their healthcare – not because of rising medical costs, but because of the unethical behaviour of a few.

Moreover, the administrative costs associated with managing and investigating FWA claims are significant. These costs divert funds that could otherwise be used to enhance member benefits or improve healthcare services. 

The long-term impact is even more worrying. If left unchecked, FWA can destabilise the entire medical scheme system. Ultimately, it is the members who suffer the most, facing financial uncertainty and diminished healthcare support when they need it most.

What the industry can do: Curbing FWA

The healthcare industry has both the tools and the responsibility to take decisive action against FWA. Key stakeholders, including medical schemes, administrators, and regulatory bodies, must collaborate to develop comprehensive strategies that can curtail the losses associated with these unethical practices. Here are some key strategies:

1. Enhanced use of technology and data analytics

The industry is already moving towards the use of automated systems and data analytics to detect unusual patterns and potential fraud. However, the systems need continuous improvement to keep up with the evolving tactics of fraudsters. Schemes should invest in advanced algorithms and artificial intelligence (AI) tools that can analyse claims in real-time, flagging high-risk transactions before they are paid. Machine learning models, for instance, could identify patterns that suggest fraudulent behaviour, such as repeated claims for the same procedure or suspiciously high billing from certain providers.

This not only helps in early detection but also ensures that members who follow the rules aren’t unfairly penalised. It is essential, however, that these systems remain transparent to avoid unintended biases or discriminatory practices.

2. Collaboration across the healthcare ecosystem

The fight against FWA cannot be won by medical schemes alone. There needs to be greater collaboration between schemes, healthcare providers, and regulatory bodies. Sharing data across schemes and industries can help to identify serial offenders who hop between schemes, committing fraud on a wide scale.

Additionally, healthcare providers themselves play a critical role. They should be incentivised to report fraudulent activities or billing irregularities they observe within their network. Schemes can establish anonymous reporting systems and offer rewards for whistleblowers who help to uncover fraud. By creating a network of accountability, the industry can make it more difficult for fraudsters to operate with impunity.

3. Member education and engagement

Members are the first line of defence against fraud. If they are empowered with the right information, they can help to identify fraudulent or abusive practices. Medical schemes should launch educational campaigns that inform members about how to scrutinise their healthcare bills and understand their benefits better.

Simple actions such as checking that all billed procedures were performed or verifying service dates can catch many fraudulent claims early. Members who understand the importance of vigilance are less likely to be unwittingly complicit in fraud and can help schemes prevent abuse of the system.

4. Improved consequent management 

Strong consequent management is one sure way of deterring this fraudulent behaviour. The Health Professions Council should impose appropriate penalties on healthcare professionals found guilty. Schemes should not hesitate to take legal action against individuals or providers who commit fraud. 

Stronger penalties, including prison sentences and significant fines, can serve as a deterrent.

Moreover, schemes must ensure that once a provider or member has been found guilty of fraud, they are blacklisted across all schemes. Allowing repeat offenders to continue exploiting the system is a failure that impacts all members.

At the heart of any medical scheme is the promise to its members that they will be provided with financial protection when they need healthcare. Fraud, waste, and abuse erode this promise, making it harder for schemes to deliver on their commitments. To safeguard the integrity of the system and ensure that members receive the care they deserve, the healthcare industry must step up its efforts to curb these damaging practices.

By embracing technology, fostering collaboration, educating members, and enforcing strict penalties, the industry can make significant strides in reducing FWA. In doing so, they will not only protect their financial stability but also uphold the trust and confidence that members place in them. This, above all, is the most important goal.

Categories : Expert Opinion Medical IndustryTags :

From Bottlenecks to Breakthroughs: BHF Report Charts the Course for Southern Africa’s Healthcare Future

On By ModernMedia
Photo by Hush Naidoo on Unsplash

By adopting bold, transformative strategies, the healthcare industry can overcome critical challenges and foster innovative collaborations to create a more equitable and sustainable healthcare future for southern Africa, writes Dr Katlego Mothudi, Managing Director at the Board of Healthcare Funders (BHF).

Committed to promoting collaboration and creating actionable insights within southern Africa’s healthcare ecosystem, BHF’s recently published report highlights significant trends, obstacles and breakthrough solutions from key figures in the healthcare sector, and charts the course for a robust, inclusive healthcare future. 

By interviewing industry leaders – including funders, hospitals, clinicians, and the pharmaceutical sector – the report presents a strategic path forward that promises to revolutionise the region’s healthcare landscape. As southern Africa grapples with rising healthcare costs, a growing burden of non-communicable diseases (NCDs), and economic instability, this report charts the course for a robust, inclusive healthcare future.

The evolving landscape of southern African healthcare

Healthcare organisations in southern Africa are navigating a complex landscape filled with escalating challenges and promising opportunities. The rapid increase in the burden of non-communicable diseases (NCDs) and economic volatility is driving a critical shift toward more sustainable healthcare models while increasing healthcare costs and reducing affordability. 

Concurrently, there is a renewed commitment to achieving health equity, with concerted efforts to ensure healthcare is universally accessible. Universal Health Coverage (UHC) is in various stages of rollout across the region, reflecting varying national priorities and capabilities. In South Africa, the proposed National Health Insurance (NHI), despite its controversies, is being closely watched for its potential impact on other countries if implemented pragmatically.

In the private sector, the health insurance market shows notable growth. This is in contrast to stagnation relating to traditional medical schemes. These schemes face slow or no membership growth and rising utilisation rates, pushing a gradual shift towards value-based care with strategies to strengthen contracting arrangements, control expenditure and improve health outcomes. 

High levels of fraud, waste and abuse persist, particularly in southern Africa, where economic conditions have severely limited the growth of private health insurance or medical scheme coverage, highlighting the critical need for innovative healthcare financing solutions.

Additionally, the post-COVID acceleration of digital healthcare is gradually reshaping service delivery. Significant investments in artificial intelligence and predictive analytics are set to strengthen health risk management, boost patient care and enhance operational efficiency. 

This era of digital transformation is marked by collaborations with local and global tech innovators and a strategic internal focus on tech integration to overhaul legacy systems and traditional practices. This complex tapestry of trends indicates a critical juncture for the region’s healthcare, laden with challenges, yet rich with opportunities for pioneering change.

Bottlenecks and barriers

Southern Africa’s healthcare systems face significant barriers to sustainability, including inefficient and politicised regulatory environments, inadequate workforce training, economic instability and the growing corporatisation of healthcare, all of which hinder innovation, affordability and access while threatening both public trust and the quality of care.

Reactive responses to emerging challenges

In response to the bottlenecks and challenges facing the sector, healthcare organisations across southern Africa are collaborating with government and business coalitions, such as Business for South Africa, to address fiscal risks and policy uncertainties, and promote private sector participation, regulatory harmonisation and advanced technologies. 

They are prioritising integrated healthcare models focused on primary care and value-based approaches, investing in digital innovations such as telemedicine, electronic health records and AI to improve efficiency and outcomes. Efforts to optimise resource allocation and care quality through digitalisation and process reengineering are also underway. 

While these actions address immediate challenges, longer-term systemic solutions are necessary to achieve UHC and future-proof their markets.

Proactive systemic responses

To create a sustainable and equitable healthcare environment in southern Africa, long-term strategic solutions are essential, and aimed at broadening healthcare access, enhancing system efficiency and ensuring financial sustainability. 

To achieve UHC, access through a multi-payer system that guarantees quality, affordable healthcare for all is instrumental. Implementing UHC principles will promote preventative care, care coordination, and effective management of chronic diseases. Additionally, advancing public-private partnerships (PPPs) can significantly enhance access and care quality, with proactive private sector engagement helping to overcome existing barriers and drive progress.

To improve policy and regulation, it is crucial to enhance the oversight and effectiveness of regulatory institutions while fostering regional inclusivity across the Southern African Development Community (SADC) for better knowledge sharing. 

In South Africa, aligning the NHI with a multi-funder framework will integrate private funders and recognise employers’ roles in system sustainability. Updating benefits to reflect current health needs and economic conditions will make healthcare more affordable and less hospital-centric. Introducing Low-Cost Benefit Options (LCBOs) within medical schemes will broaden access, while strengthening competition and optimising private sector performance, will enhance care quality. Additionally, establishing a risk equalisation fund and mandating medical scheme membership is key to stabilising the insurance market and lowering costs.

To advance healthcare, investments in infrastructure and technology are essential, especially in underserved areas, to ensure equitable access. Strengthening healthcare training and updating practice guidelines will improve care quality and expand capabilities, while better workforce planning and collaboration between academia and healthcare providers will align training with industry needs. Additionally, leveraging digital health initiatives, such as telemedicine and electronic health records, will enhance service reach and efficiency.

Furthermore, incorporating Environmental, Social, and Governance (ESG) principles is crucial for promoting resilience and establishing southern African healthcare systems as leaders in sustainable practices. Adopting ESG standards will enhance the sustainability and governance of these healthcare systems.

These strategies are designed not only to address immediate healthcare challenges, but also to establish a robust foundation for a future where high quality healthcare is universally accessible in southern Africa. By implementing these solutions, the region can bridge the current gaps and pave the way for a resilient healthcare system.

Through collaborative efforts, strategic reforms, and innovative solutions, southern Africa’s healthcare sector is not only meeting current needs but also preparing for future demands that are defined by innovation, equity and sustainability. 

Categories : COVID Ethics and LawTags :

COVID PPE Supplier Must Face the Music, Court Rules

On By ModernMedia

Pro Secure fails in bid to stop Special Investigating Unit going after it to recover millions of rands

Photo by J Castellon on Unsplash

A company accused of unlawfully benefiting from a multi-million rand contract to supply personal protective equipment (PPE) during the Covid pandemic, has failed in a bid to quash a summons issued against it by the Special Investigating Unit to recover the money.

Pro Secure raised several objections to the formulation of the case against it in the papers. But Special Tribunal Judge Kate Pillay has dismissed the company’s objections and ordered the company to pay the costs.

The SIU investigation uncovered irregularities in the Limpopo Department of Health’s appointment of service providers including Pro Secure, Clinipro and Ndia Business Trading, which resulted in about R182-million irregular and wasteful expenditure. The SIU initiated action against Pro Secure, alleging the company had made “secret profits”, and also instituted civil proceedings against the former head of health in the province, Dr Thokozani Florence Mhlongo.

In October 2022, the SIU secured an order from the Special Tribunal, effectively freezing Mhlongo’s pension fund until the outcome of the civil action against her. Mhlongo resigned in June that year while facing disciplinary charges.

In its application to the Tribunal, Pro Secure challenged the SIU’s legal standing, the fact that the Limpopo health department was not a party to the SIU action. Pro Secure also claimed that there was no allegation that its bid for the contract was not lawful.

Judge Pillay found there was no substance to any of the company’s arguments.

She said the particulars of claim in the civil action set out how Pro Secure had received a payment “significantly exceeding their initial bid”.

She said that according to the SIU, the request for quotation sent by the department was for 5000 automated hand sanitisers. Pro Secure had submitted a quote for 5000 white electronic hand disinfectant dispensers and for 5000 liquid sanitisers, the total amount being just over R7-million. Ultimately, the company had delivered 30 000 dispenser holders at R420 per unit and 900 000 litres of hand sanitiser at R170 a litre and had been paid almost R162-million.

In a statement, SIU spokesperson Kaizer Kganyago said: “This ruling supports the SIU’s stance on the irregular procurement of PPE by the Limpopo Department of Health during the pandemic.”

Republished from GroundUp under a Creative Commons Attribution-NoDerivatives 4.0 International License.

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Categories : Ethics and LawTags :

Collaboration Needed to Reduce Billions Lost Annually in Healthcare Fraud, Waste and Abuse

On By ModernMedia
Photo by Jp Valery on Unsplash

In an age where healthcare integrity is of the utmost importance, a coalition of industry pioneers and technological trailblazers must lead the charge in driving transformation to combat fraud, waste and abuse (FWA) in the healthcare sector.

As a focal point of discussion on day two of the 2024 BHF Annual Conference, Vusi Makanda, HFMU Deputy Chairperson, and Manager of Fraud Management at Bonitas, set the stage for an interactive discussion on these healthcare issues. 

“Collaboration is paramount in addressing the challenges of healthcare FWA, evidenced by the erosion of trust and substantial financial losses highlighting the call for collective action,” says Makanda.  

Dr Hleli Nhlapo, MD of the medical schemes division at Dental Information Systems (DENIS), echoed Makanda’s sentiments. To this end, Nhlapo set the scene on the current state of FWA in the healthcare industry, suggesting that it exerts unnecessary pressure on resources while undermining trust between stakeholders. 

“Perpetrators are employing increasingly sophisticated tactics, leveraging technology and syndicates to orchestrate large-scale schemes, while regulatory delays and prosecutorial challenges hinder effective resolution,” says Nhlapo. “Despite this, collaboration among healthcare funders has emerged as a crucial solution, with recent initiatives indicating a promising shift towards industry-wide cooperation in addressing these complex challenges.”

Following Nhlapo’s address, Roxane Ferreira, Head of Department at the Association of Certified Fraud Examiners (ACFE), alluded to several global trends in FWA that are plaguing the global industry.

The impact of these is extensive and has led to concerning financial situations for healthcare systems around the world. So much so that Ferreira’s insights suggest that in the United States, it is estimated that as much as $68 billion is lost every year on the back of FWA. 

“In South Africa, the problem is not much better, with between R8 billion and R13 billion being lost annually to this. With between 15-35% of all claims submitted regarded as being fraudulent or abusive, the plight is adding approximately R22 billion to the cost of private healthcare,” adds Ferreira.  

Healthcare fraud is perpetrated by a variety of actors within the system, ranging from medical scheme staff to service providers and even syndicates. These perpetrators exploit vulnerabilities at different points in the healthcare process, whether through falsifying claims, overbilling or engaging in other deceptive practices.

Moreover, medical scheme members themselves, as well as patients, may also be complicit in fraudulent activities, while brokers and manufacturers can also play a role in facilitating these plans. 

Ferreira highlighted the multifaceted approach employed in identifying healthcare fraud, citing that 70% of cases stem from tip-offs or received information, while the remaining 30% are uncovered through data mining, audits and investigations.

“Healthcare fraud encompasses various deceptive practices,” suggests Ferreira. “ Some of the most common ones include merchandising, where pharmacies sell non-healthcare merchandise, but claim for a healthcare service; false claims by claiming for services rendered; ATM scams where doctors submit false claims and provide cash to patients; card farming where members lend their membership cards to non-members; code gaming that involves doctors manipulating billing rules to increase revenue; and lastly, the hospital cash plan fraud that entails doctors and members colluding to arrange unnecessary hospital admissions.”

In response to the escalating challenges of healthcare fraud, Ferreira adds that the sector is increasingly turning to innovative solutions, with the integration of Artificial Intelligence (AI) emerging as a pivotal strategy.

“AI technology offers the capability to analyse large volumes of data rapidly and accurately, enabling the identification of suspicious patterns and behaviours,” she says. “By leveraging AI algorithms, healthcare providers can proactively identify questionable activities, thereby safeguarding resources and maintaining the integrity of healthcare systems”

Using these advanced algorithms, AI can swiftly identify irregularities, such as sudden spikes in billed procedures and visit rates. Furthermore, it can compare billing practices, verify purchases, compare the geographical location of a patient against the practice, and treatments billed for the same or similar treatment by other practices.

In the fight against healthcare FWA, collaboration and technological innovation are emerging as critical pillars. By harnessing advancements such as AI, healthcare systems can effectively detect and prevent fraudulent activities, thus safeguarding resources, upholding the integrity of patient care and rebuilding trust.