Picture: 123RF/LANGSTRUP
Picture: 123RF/LANGSTRUP

Medical scheme administrators are overstepping the mark in their fraud investigations into healthcare professionals, straying into the terrain of regulatory authorities and claiming back money they have not proved they are entitled to, according to consultancy firm Elsabé Klinck & Associates.

“In the name of curbing fraud, they have overstepped their mandates. They are making pronouncements on what equipment a practice should have, what a practitioner can and cannot do, and there are clawbacks that happen without losses being proven” said the firm’s founder Elsabé Klinck, shortly after making a presentation to the Council for Medical Schemes (CMS) inquiry into allegations that medical schemes unfairly target black, Indian and coloured healthcare professionals for forensic investigations.

Fraud is a major concern for the medical schemes industry, which consistently says it is a significant driver of escalating monthly premiums. The CMS, which regulates the sector, said in February that fraud, abuse and waste cost the industry between R22bn and R28bn a year.

Klinck said there are different views on the application of section 59 (3) of the Medical Schemes Act, which gives medical schemes the power to recover money paid to a practitioner who is not entitled to such funds, and to recover losses that have been sustained due to theft, fraud or other misconduct. Klinck said many medical scheme administrators claw back funds in cases of suspected fraud without substantive evidence, but in her firm’s view there has to be proof of fraud before money is reclaimed. The principles of administrative justice and the principles relating to the law of evidence must be applied, she said.

Klinck said she hopes the inquiry will make recommendations on how to resolve this issue, and other key aspects of how forensic investigations into allegedly fraudulent healthcare practitioners are conducted.

She echoed previous submissions that raised concerns about the coding system used for billing patients, saying it is open to misinterpretation.

Earlier this week, the panel heard from the SA Private Practitioners’ Forum (SAPPF), which represents specialists. It said it has numerous concerns about the methods used by medical schemes to flag potentially crooked doctors among its membership base, but said it had no reason to believe there is a racial dimension to it.

The Independent Community Pharmacy Association (ICPA) deputy chair Kgabo Komape told the panel that medical schemes impose an onerous administrative burden and unreasonable deadlines on the pharmacies they suspect of fraud, as they typically ask for three years of invoices to be supplied within 10 days.

Medical scheme administrators also bully pharmacies into signing acknowledgements of debt, he said. When pressed to provide evidence for this claim, he said pharmacists did not want to come forward because there was such shame attached to acknowledging alleged wrongdoing.