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Medscheme reveals millions in fraudulent claims

Medscheme reveals millions in fraudulent claims


Medscheme, South Africa’s largest manager of medical schemes, has recovered over R107-milllion claimed fraudulently and through waste or abuse and more than R300 million in reduced claims through forensic interventions.

“Using the company’s robust data analytics system, Medscheme was able to identify claims that fell outside the average patterns. Investigations into these claims confirmed fraud and abuse,” said Anthony Pedersen, Chief Executive Officer of Medscheme, a subsidiary of AfroCentric Group.

Pedersen has urged customers to take interest and thoroughly examine their statements as well as understand what service their medical schemes were being charged for.

“We received more than 1500 calls from whistle-blowers, alerting us of potential fraudulent, wasteful or abusive conduct committed against medical aid funds. This is important as ultimately the customer pays for the fraud, waste and abuse or any increasing costs through high annual increases of the premiums,” said Pedersen.

“It is a pity that as long as a medical scheme continues to pay, patients never ask whether the physiotherapist or dietician at the hospital was actually a necessary expense to incur or if the pharmacist has dispensed the generic but claimed for the more expensive original, or if your medical scheme also paid for that pathology account you keep getting in the mail,” he said.

Fraud, waste and abuse are defined as intentional deception or misrepresentation that a person knows to be false or does not believe to be true, misreporting data to increase payments, paying kickbacks to providers for referring patients for specific services or to certain entities, or stealing providers' or patients’ identities.

“The difficulty with healthcare is that unlike other insurance can be verified after payment has been made, other insurance sectors often have assessors to check prior to payment,” said Pedersen.

Medscheme administers both open and closed medical schemes for. The company’s data analytical capabilities enable them to not only provide strong end to end health administration and managed care but also to deal with fraud. The software detects irregular claims and ensuring only valid healthcare claims are paid to healthcare providers and facilities. With 13 forensic clients and over 1.8 million lives on a single analytical platform, Medscheme enjoys strong insight into the claiming patterns and behaviour of any healthcare provider, pharmacy or hospital in the country.

According to the Board of Healthcare Funders, it is estimated that at least 10 – 15% of all claims are fraudulent, abusive or wasteful in nature, a substantial expense in a R150 billion industry.

Pedersen has urged members of medical aid schemes to help ensure that they do not become victims of medical aid fraud, waste and abuse by:

  • Treating the medical aid number like a credit card. Never give it out over the phone unless you initiated the call. If the card is lost or stolen, report it immediately to the scheme;
  • Not to accept free medical services or equipment in exchange for a medical aid number. Unscrupulous companies or individuals could use this number to bill medical for services or products you did not receive;
  • Review medical aid statements closely and keep a watch out for services paid for but never receive and
  • If one suspects fraud, report it immediately.

“Healthcare fraud, waste and abuse are victimless crimes. Every person who pays for healthcare benefits, every business that pays higher insurance costs to cover their employees, and everyone who pays medical aid, is a victim,” said Pedersen.

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