Bogus health claims bleeding South Africa dry – R30 billion under investigation
An ongoing probe into fraudulent medico-legal claims has saved the state more than R3.1 billion so far—with eyes on the next steps for the Department of Health (DoH) and the Special Investigating Unit (SIU) as they take the matter further.
Over the weekend, Health Minister Aaron Motsoaledi and SIU head Andy Mothibi briefed the media on the preliminary findings of an SIU investigation into fraudulent medico-legal claims against the DoH across the country.
This is part of a nationwide effort to stop the escalation of dodgy practitioners milking the state and patients of billions of rand.
Over the past several years, Motsoaledi revealed that more than R100 billion in medico-legal claims had been made against provincial health departments, with more than R33.13 billion in claims under SIU investigation.
Motsoaledi explained that from around 2015, the health sector “experienced an explosion of medical practice litigation cases directed against health institutions.”
He said that this coincided with the time that the Road Accident Fund (RAF)—which was brought to its knees by unscrupulous claims—began strengthening its claims systems.
“In the aftermath, legal practitioners who used to litigate against RAF seem to have migrated en masse to the Healthcare Sector,” said Motsoaledi.
Simply, legal firms that have been milking the RAF have also been wreaking havoc in the department by lodging fraudulent medical neglect claims.
From there onwards, “very suspicious claims” against health departments began to pile up, with claims against the state amounting to tens of billions of rands.
The DoH roped in the SIU to investigate.
In 2017, the SIU started their work by targeting provinces with the highest share of claims – Gauteng and the Eastern Cape.
At that time, these two provinces saw health departments with contingent liabilities for medico-legal claims amounting to more than R37.1 billion.
This probe found extensive fraud by legal practitioners in these provinces, particularly to do with claims for children born with cerebral palsy.
For example, most of the medico-legal claims in the Eastern Cape were traced back to a law firm based in Johannesburg, where, from 2012 to 2017, they filed 44 claims worth R497 million against the Eastern Cape Department of Health, primarily for children allegedly born with cerebral palsy.
The firm’s pattern of demanding R15 million for each child raised suspicions of repetitive and possibly fraudulent behaviour.
“While it is recognised that cerebral palsy is a very debilitating and unfortunate occurrence to come from the healthcare system, it is a matter of very serious concern that it is abused by legal practitioners due to sheer greed,” said Motsoaledi.
“The level of abuse was such that the SIU found that some of the claims were made on behalf of patients without their knowledge,” he added.
This was not isolated. Examples of fraud ranged from litigating attorneys suing for one case in different courts (with vastly differing amounts) to elderly people who are taking care of their grandchildren tricked into signing a Power of Attorney to sue.
These escalating instances of fraud led to President Cyril Ramaphosa signing a proclamation in 2022 for the SIU to extend their investigation of medico-legal claims to all nine provinces.
Between 2015 and 2021, the SIU investigated 2,830 medical negligence claims worth R33.13 billion, according to Motsoaledi. Out of these, 360 cases were concluded.
So far, in the matters completed by the SIU, the sum of R3,104,684,800 has been saved for various Departments of Health, with the figure expected to rise.
“This is just the tip of the iceberg. These savings are going to increase dramatically as investigations continue,” said Motsoaledi.
Furthermore, several lawyers are facing possible prosecution by the National Prosecuting Agency for alleged fraud, theft, and misappropriation of funds, in addition to being reported to the Legal Practice Council for ethical violations.
“There is evidence of collusion between attorneys, touts, nurses and doctors in both the public and private healthcare [and] in some instances nurses stole the medical records and illegally handed them over to attorneys,” added the minister.
Lifeline
Motsoaledi has thrown a lifeline to those involved and announced a two-week amnesty period in which lawyers can withdraw fraudulent medical negligence claims without fear of prosecution.
“We wish to take this opportunity to make an offer to lawyers who might have knowingly submitted claims that are fraudulent, to withdraw them within two weeks and there will be no consequences,” said the health minister.
“Failure to withdraw within two weeks would mean that the offer will have lapsed and the SIU will strike,” he added.
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