The shocking truth about medical aid fraud in South Africa

The prevalence of healthcare fraud involving collusion between medical aid members and healthcare providers is increasing, according to the Bonitas Medical Fund.

Estimates by the Healthcare Forensic Management Unit (HFMU) of the Board of Healthcare Funders of Southern Africa (BHF), find that at least 7% of all medical aid claims in South Africa are fraudulent and the figure could be as high as 15%.

That adds between R192 and R410 per month to every principal member’s medical aid contributions.

In terms of monetary value, healthcare fraud is one of the leading crimes in South Africa. According to Dr Bobby Ramasia, Bonitas’ principal executive officer, it is also the most complex form of financial fraud to detect, monitor and prevent.

This is because healthcare fraud occurs at all levels along the healthcare delivery chain and involves employees, administrators, medical scheme members, providers of service as well as healthcare services providers.

“Fraud wastage and abuse of medical aid benefits is a serious challenge that seriously hampers efforts to solve one of the biggest challenges facing our country – providing affordable, quality healthcare to all South Africans. This makes an integrated approach to fraud essential,” Ramasia said on Monday.

It is estimated that medical aids lose between R9 billion and R19 billion every year due to fraud, abuse and waste. Bonitas has been able to restrict losses due to fraud to about 3% of turnover, yet it is still costing the scheme more than R260 million per year.

According to Ramasia, fraud in the industry is becoming more prevalent and sophisticated. That is why the methods used to combat it must keep pace too.

That is why Ramasia sees a new partnership with Helios IT Solutions and international analytics software company FICO as putting the scheme “at the forefront of the industry’s fight against fraud, wastage and abuse”. He estimates the new partnership could bring about potential savings of 8.7% of claims paid.

The FICO solution identifies actual and potential fraud and abuse by monitoring irregular claiming patterns that can lead to early detection and action. “Once fraud is detected, the case is investigated by our forensic specialists and the appropriate action is taken,” said Ramasia.

He added that, at the same time, it is of the utmost importance that investigations maintain a high standard of ethics while adhering to the legal protocols and processes agreed to by the industry.

“Bonitas supports the view that a collective approach to altering behaviour of those who act fraudulently or inappropriately will have the greatest impact,” explained Ramasia.

“If perpetrators know that it is more likely that there will be consequences to their actions, they are less likely to commit fraud, wastage and abuse.”


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The shocking truth about medical aid fraud in South Africa