Private healthcare professionals knuckle down on the scourge of fraud, waste, and abuse

The opportunity costs of fraud, waste, and abuse (FWA) in the private healthcare industry could run into a staggering R36 billion, which is enough to fund the current healthcare deficit of training approximately 97,000 healthcare workers. Moreover, this could fund the infrastructure backlog in the public sector.?

Dr Katlego Mothudi, managing director of the Board of Healthcare Funders (BHF), made these observations at the opening address of the 2022 Healthcare Forensic Management Unit (HFMU) Fraud, Waste and Abuse Indaba, which was recently hosted by the HFMU.

Dr Mothudi said that the often-quoted cost of FWA, which is reported to cost the industry between R22 and R28 billion each year according to the Council of Medical Schemes (CMS), could pale in comparison with the actual impact of the FWA.

“It could be as high as R36 billion, depending 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, they could have funded the training of about 97,000 healthcare workers, covered the compensation fund claims five times over, financed the road accident fund claims nine times over, and built 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 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 Dr Mothudi.

“We can all make a difference in the fight against FWA. It starts with doing as little as submitting data, sharing information, and contributing to this collaborative effort of fighting for the welfare of our healthcare,” Dr Mothudi said.

The Indaba was hosted on the backdrop of the International Fraud Awareness Week?(13–19 November 2022),?which encourages business leaders and employees to proactively take steps to minimise the impact of fraud by promoting anti-fraud awareness and education.?

Speaking about the HFMU portal, Charlton Murove, Head of Research at the BHF, noted that the portal was established as part of a solution to address fraud, waste, and abuse in healthcare.?Since its inception, the portal has recorded encouraging success and has managed to identify and clamp down on incidents of malfeasance.

“The biggest category of fraud reported on the portal is the submission of false claims,?which is 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,” said Murove.

He said that reporting cases on the portal has several benefits, as it creates a trail and provides investigators with insights on potential trends.

He urged that healthcare funders must fully utilise the portal to support efforts aimed at clamping down on fraud, waste, and abuse. “If we fail to fully utilise the portal, 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 reduction of big losses requires a lot of work, the use of tools at our disposal, and broader efforts to share information. If we don't share enough information, and if we don't share what we find in our own environment, we just make it even more difficult for the next person to identify patterns of fraud, waste, and abuse. Medical schemes need to look at the impact created by these threats in conjunction with information sharing rather than just the risks they pose in isolation. It is this rationale that underpins the portal's existence,” Murove said.

He adds: “We need to emphasise the idea of collaborating, as the cost of not collaborating is too high. Our bigger problem is the blind spot of information that we cannot see. Not having clear sight of this important information makes it difficult to formulate a strategy. It is a waste of resources if people work in silos, especially when they are trying to address the same industry problem. It is time to do things differently.”?

Jacob Chirwa, Project Lead for the Zambian NHI Project:?National Health Insurance Management Authority (NHIMA), shared a case study on FWA in Zambia. He recalled that when the NHIMA?registered principal members, there was the risk of dependents interchangeably using each other’s identity to access medical services, particularly those who were under the age of 16 as they did not qualify to have an identity document.

“The introduction of the biometric system provided a solution to bridge this gap and safeguard the system from abuse. The biometric system identified and verified dependents biometrically before they could access healthcare,” said Chirwa.

He noted that in Zambia, the promulgation of legislation that required a process of registering the members and implementing monitoring mechanisms to oversee unnecessary diagnostics, rational and appropriate prescriptions, as well as the referral practices, went a long way towards curbing FWA. There are laws that also state that the members will not provide us with false or fraudulent statements, and also against making claims in respect of prescriptions that the person has not received. Legislators ensured that these laws were given teeth and transgressors were severely punished.?

“What has really helped to drive this agenda is the fact that there is legislation that requires the members to comply, and that is mandatory. The fact that it is mandatory has given it enforcement powers,” said Chirwa.

In addition, he said that the Zambian healthcare authorities also established an anonymous hotline that people can use to report any suspicious activities. He adds that the hotline has been supplemented through an extensive education drive and deployment of smart technology solutions to detect and curb FWA.

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