Medscheme welcomes probe into allegations of racial profiling in medical aid schemes

South Africa’s largest health risk management services provider Medscheme has welcomed an investigation into allegations of racial profiling against black and Indian private medical practitioners.

In a statement on Sunday, the second largest medical aid administrator said the probe, launched by the regulator of medical aids schemes, the Council on Medical Schemes (CMS), would help debunk the allegations that black and Indian practitioners were being “harassed, exploited, and their claims withheld because of their race and ethnic background”.

“We welcome the investigation. For us, this is an opportunity to prove that we do not profile providers based on race. We rely on whistle-blowers and our own predictive analytics system, which relies solely on the practice number of a healthcare provider. We do not keep race demographics of medical practitioners,” Medscheme chief executive officer Anthony Pedersen said.

The CMS review followed allegations made by members of the National Health Care Professionals Association (NHCPA) who alleged they had been unfairly treated and their claims withheld by medical aid schemes based on the colour of their skin and ethnicity.

Last Thursday, Medscheme attended a meeting convened by CMS. Other attendees included the NHCPA, Discovery, Sizwe Medical Scheme, Medshield, GEMS, South African Medical Association (SAMA), Health Funders’ Association (HFA), Board of Healthcare Funders (BHF), and Health Professions Council of South Africa (HPCSA).

The officials from all the organisations agreed to the scope and timelines of an investigation that the CMS would lead.

“The NHPCA has previously brought a High Court application against Medscheme and other schemes, including CMS, requesting the court to declare its forensic methods as unlawful. The court dismissed their case and questioned how this organisation is constituted.

“A medical scheme has a fiduciary duty to protect the funds of their members and they cannot be required to continue honouring claims when the validity is in question, a medical scheme does not require a court judgment to recover overpaid funds, specifically because the claims have already been paid in good faith,” Pedersen said.

“We pay claims in good faith. We reserve the right to retrospectively review payments based on anomalous patterns. We pay over 80 percent of claims within hours, with no recourse, as they are confirmed to be legitimate,” he said.

On allegations of bullying tactics, Medscheme, a subsidiary of AfroCentric Group, categorically refuted that any such tactics were used in their forensic investigation process. Information was requested where it was needed and a provider was given the opportunity to respond.

“When we do invite providers for interviews, we encourage them to have legal representation. We do not use hidden spy cameras or fake membership cards to entrap a suspect under investigation.

“One way to verify that valid services were indeed rendered, is to ask a practitioner to provide information as proof that he or she actually treated the member. We are not interested in the confidential notes of a practitioner. This right to access such records is protected by law, including the National Health Act and various other rules governing medical schemes and healthcare practitioners,” Pedersen said.

He dismissed the excuse of patient confidentiality when doctors were asked to back their claims. When a claim was submitted the doctor submitted codes detailing the diagnosis. Motivation for pre-authorisation contained very detailed clinical information about the surgery and/or treatment required by the member.

“We know when the member is in hospital, or what chronic medication they require, or what their specific managed care program is. By law, we are expected to pay claims within 30 days. This is done in almost 100 percent of the claims submitted. Medscheme only withholds payment pending finalisation of the audit and we try to finalise all cases within 30 days.

“Only if there is a delay on the cooperation by the healthcare provider can payment to their practice be delayed further than that. Only three percent of providers have been investigated in 2018,” Pedersen said.

According to the Board of Healthcare Funders, at least 10 to 15 percent of all medical aid claims were fraudulent, abusive, or wasteful in nature, a substantial expense in a R150 billion industry. The total fraud costs in the South African private healthcare system was estimated at about R22 billion a year.

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