Shady business impacts us all

What is medical aid fraud?

Medical aid fraud is an intentional deception or misrepresentation submitted to a medical scheme provider that could lead to unlawful or unauthorized medical or financial benefits. It’s most often committed by health care providers and medical aid members, but third parties such as brokers can also be implicated. There’s also a risk posed by identity theft and even specialized crime syndicates operating in the medical sector.

Medical service providers can defraud medical aids in a number of different ways, including:

  •  submitting duplicate claims,
  • billing for treatments a patient never received,
  • billing for more expensive services than those supplied by manipulating treatment codes,
  • billing for more expensive products, such as charging the cost of original medication when a patient received generic,
  • providing unnecessary treatments.

Medical aid members can defraud medical aids in a number of different ways, including:

  •  submitting falsified invoices,
  • allowing others to use their medical aid information and benefits (card farming),
  • conspiring with medical providers to submit fraudulent claims for monetary compensation,
  • faking ailments and doctor hopping,
  • non-disclosure of pre-existing conditions.

 How does it affect you?

When medical aid members, or medical service providers acting alone or in collusion, successfully submit fraudulent claims to a medical aid, it is ultimately the members of the medical aid who collectively carry the financial burden of increased contributions. Medical aids have to cover their expenses and mitigate the losses suffered, and they do so by increasing members’ monthly payments. Especially in developing countries the escalating costs of medical scheme contributions as a result of fraud can cause private healthcare to become unaffordable and inaccessible to a large portion of the general public.

Fraud, wastage, and abuse has a negative impact on a medical scheme’s benefit pool– the benefit pool of resources on which all the members belonging to the scheme rely on when requiring emergency and life-saving treatments. Individual members’ plans also have capped benefits, such as a yearly allowance for medicine claims or blood tests. Any fraudulent or unnecessary claims submitted, deplete benefits and lead to further costs for the member once medical aid benefits have run out.

It’s a knock-on effect that not only impacts patients, but most especially, up-and-coming medical scheme providers in developing nations who lose members that can no longer afford their premiums. With enough material losses a scheme’s bargaining powers are affected, as well as their solvency ratio and overall financial health, in turn placing the provision of their services in danger, and therefore the viability of the entire private healthcare sector of that economy.

Private healthcare is a privilege very few could afford without medical cover, and a healthy, functional industry is inextricably dependent on the existence of medical aids.

How can you help to address the problem?

  •  Protect your information. Medical aid membership details should be treated the same as any other sensitive personal information. Don’t allow anyone else to use your details and benefits as doing so amounts to a punishable criminal offence. Also be mindful when sharing your details in a public setting such as a doctor’s office or pharmacy.
  • Be suspicious of free services. If you are asked to supply your medical aid information when receiving something marketed as a free test or treatment, your medical aid might still be charged for the service provided, without your consent.
  • Always check your statements. Make sure the dates, practitioners, tests and treatments submitted to your medical aid match what you consented to and received.
  • Report any suspicious behavior to your medical aid.

 The implementation of artificial intelligence and advanced electronic analysis to recognize fraudulent claims patterns has made great strides in addressing medical aid fraud, but affording access to these systems and funding fraud investigations remains a challenge, especially in developing economies.

And, some instances of fraudulent or faulty billing can still only be detected through scrupulous human intervention.

With increased awareness, more members will query service providers regarding excessively high costs and billed services, which will go a long way in assisting schemes to reduce fraud, waste and abuse. Through greater understanding of the illegalities and penalties imposed on medical aid fraud, including financial liability, fines and imprisonment, as well as insight into the greater social impact, these behaviors are more likely to be deterred.

The active participation of all involved will ultimately help to make healthcare services more accessible and affordable, leading to a sustainable healthcare industry for all.

Change begins with individuals! News/CMSNews1of2018.pdf