Discovery Health saves half a billion with fraud detection

Half a billion rand: that is what Discovery Health administrators claim it has saved Discovery Medical Aid — and other medical aids — by uncovering fraud and recovering ill-spent money.

However, Discovery Health said there was probably a few more billion rand wasted through fraud each year that is never uncovered. The R568m recovered was up from R405m in 2016‚ the administrators said on Friday.

The main offence in 2017 was members and health workers submitting claims for services that had not been offered‚ or pharmacies and members claiming for medicines and medical devices that were never supplied.

A Discovery Health statement said: "Pharmacies would supply members of medical schemes with non-claimable items such as baby formula‚ nappies‚ cosmetics and shoes, yet submit claims for prescription medicines. Sometimes pharmacies or doctors dispense generic medicines‚ yet claim for higher cost original medicines."

In 2016‚ the administrator uncovered that a particular pharmacy was found to have dispensed multiple high-cost items to individual families during the year.

For example, one family claimed 19 thermometer units‚ while another family claimed 14. These cost approximately R3,200 each. One family claimed four swivel bath chairs‚ costing approximately R2,000 each; two of these were claimed on the same day‚ with another two within a day of one another. Yet another family claimed for 11 nebulisers.

Another type of common fraud was when doctors‚ dentists‚ therapists or pharmacies gave services to someone who doesn’t belong to the medical aid by using an actual member’s medical aid details.

Hospital cash-back policies are also a main driver of fraud. These insurance schemes often pay R3,000 or R5,000 to a person for each day they spend in hospital to cover loss of earnings or supplement their medical aids. To make money‚ dodgy doctors admit "patients" who are not sick to hospital.

The "patients" claim from medical aids‚ who then pay for the unnecessary hospital stay‚ and then the "patient" and doctor make money from this cash-back payment.

Discovery Health CEO Dr Jonathan Broomberg said: "Although we have secured large recoveries as a result of our fraud avoidance efforts‚ we believe this is only part of the story, and fraud and billing abuse most likely costs medical aid schemes several billion rand per year. These precious funds could be used to pay for the critical healthcare needs of our medical aid members."

The Discovery Health press statement emphasised that most doctors are honest. "The vast majority of healthcare providers are honest‚ hard-working‚ highly ethical people who deliver diligent care to their patients."

It specifically points out that pediatricians and ophthalmologists are the specialists least likely to commit fraud‚ according to its data. Discovery Health finds GPs and pharmacists‚ of which there are a higher number‚ are the most likely to commit fraud.

Broomberg said catching fraudsters deterred others from similar crime.

"We also estimate that the ‘halo’ effect of these fraud-control activities‚ in which health professionals and others contemplating fraud desist from fraud in reaction to visible policing by Discovery Health‚ has prevented additional fraud to the value of approximately R3bn over the past 24 months‚" he said.

Discovery Health uses a specialised team of more than 100 analysts and professional investigators to uncover fraud. It uses its own forensic software system that relies on sophisticated algorithms to analyse claims data and identify any unusual claim patterns.