Fraud losses could amount to up to R36 billion annually: Mothudi

The often-quoted R22 to R28 billion lost annually to fraud, waste and abuse could actually be up to “a staggering” R36 billion, Board of Healthcare Funders* (HFMU) MD, Dr Katlego Mothudi, pronounced during his organisation’s recent Healthcare Forensic Management Unit (HFMU) Fraud, Waste and Abuse indaba.

These “funds”, he reminded his audience, would be enough to fund the current healthcare deficit of training approximately 97,000 healthcare workers and better still, could?fund the infrastructure backlog in the public sector.

The amount of R36 billion, he acknowledged, would depend on the methodology used for calculations.

“Looking at R28 million being lost on a yearly basis due to fraud, what is more disturbing is how this lost revenue could have been productively deployed. To put these losses into perspective,” Mothudi added, “they could have covered the compensation fund claims five times over, financed the road accident fund claims nine times over, and build a 1,200-bed capacity hospital on a yearly basis.

“We have a big health workforce deficit in South Africa, and experts state that for us to be on par with the healthcare needs of the country by 2025,” he noted, “we need about 97,000 healthcare workers. Now for us to train and employ these healthcare workers, we need about R40 billion.

“In essence, it would take us a little over one year to address this challenge with the revenue we are losing through fraud,” said Mothudi.

Discussing the HFMU portal at the indaba, Charlton Murove, Head of Research at the BHF, said that the biggest category of fraud reported was the submission of false claims – the biggest contributor to FWA:?“In 2021, a total of 255 providers were identified under the false claims’ investigation category, and 13 schemes had exposure to the provider, with a total of over 209,000 fake consultations.”

Murove said that reporting cases on the portal created a trail which provides investigators with insights on potential trends.

“If we fail to fully utilise the portal,” he added, “we risk losing crucial background information, particularly when conducting investigations. Consequently, other healthcare funders who might be faced with similar cases will not have access to crucial information. The full utilisation of the portal prevents duplication of efforts.”

*The BHF was one of the key stakeholders who participated in the successful conclusion of the second output of the Council for Medical Schemes (CMS)-initiated Fraud Waste and Abuse (FWA) Programme, reached in the same week with stakeholder adoption of the Industry Codes of Good Practice (CoGP) and FWA Tribunal rules. (ref?Med Brief Africa?https://medbriefafrica.co.za/cms-finalises-fwa-tribunal-rules-industry-codes-of-good-practice/)