The Council for Medical Schemes (CMS) is hosting its inaugural fraud, waste and abuse summit this week, raising the issue of how unethical and sometimes illegal claims place a major burden on the private healthcare sector in the country.<\/p>\n
According to the CMS, fraud, abuse and waste in private healthcare is costing the sector between R22 billion and R28 billion annually, with up to 25% of the all premiums paid by medical aid members funding these false claims.<\/p>\n
The group said that compared to other types of insurance, claims in the healthcare sector are much higher and far more frequent – with 90% of policy holders making claims in any given year, compared to 25% in other sectors.<\/p>\n
Healthcare insurance is also more complicated, it said, with over 67,000 diagnosis codes and 87,000 procedure codes that need to be navigated.<\/p>\n
This frequency and complexity opens up the whole system to abuse and waste – whether done intentionally or not.<\/p>\n
Fraud vs waste and abuse<\/strong><\/p>\n According to the CMS, not all cases of wasted spend in the private health industry are necessarily illegal or tied to fraud. A lot of the time, it comes down to misrepresentation.<\/p>\n “Misrepresentation is however not always intentional. It can often be attributed to an honest mistake due to the dense, complex billing and reimbursement system that healthcare providers need to understand,” the group said.<\/p>\n This can result from billing errors, inefficient diagnostic testing, negligent coding, improper training, administrative confusion, unintentional duplication of claims and a whole range of other causes.<\/p>\n The difference between fraud and abuse is therefore the intent behind the misrepresentation that lead to overpayment, the CMS said.<\/p>\n However, no matter how the the bad claims are defined, their impact remains the same.<\/p>\n “Significant losses are incurred by paying claims to which, on a balance of probabilities, a healthcare service provider, pharmacy or healthcare facility was not entitled,” it said.<\/p>\n Because waste and abuse is not criminal (and thus lacks any appropriate procedures) and is difficult to define, the CMS wants the private healthcare industry to adopt standardised definitions:<\/p>\n The CMS said that there are numerous factors that play a role in determining whether the misrepresentation is intentional or not – such as the nature of the billing irregularities; the frequency of the irregularities; the evidence available; the claiming history and the degree of deviation from peer norms.<\/p>\n “However, these factors do not impact the funder\u2019s right to receive repayment of overpaid claims to which a healthcare service provider was not entitled,” it said.<\/p>\n\n
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