By Lehlohonolo Lehana.
The section 59 panel’s final report, handed to Minister of Health Aaron Motsoaledi on Monday, found that between 2012 and 2019 there was evidence that the Fraud, Waste and Abuse (FWA) systems used by medical schemes against black healthcare providers in South Africa.
The report found that Discovery, the Government Employees Medical Scheme (Gems) and Medscheme acted unfairly and in a racially discriminatory manner towards black healthcare providers.
The investigative panel, commissioned by the Council for Medical Schemes (CMS) and chaired by advocate Tembeka Ngcukaitobi, began looking into the matter in 2019 after healthcare providers, represented by two associations, made public allegations about their treatment by medical schemes and administrators.
Motsoaledi, made the report public after receiving the report on the findings of the inquiry conducted by the Section 59 Investigation Panel.
“We were not a court of law… We did not have to make legal findings applying the Promotion of Equality and Prevention of Unfair Discrimination Act or applying section 9 of the Constitution, but what we did have the power to do was to make findings of fact, and that… simply leads to one conclusion. The evidence of the risk ratios before us showed racial discrimination against black service providers by the [medical] schemes, “said Ngcukaitobi at a press briefing marking the handover of the report on Monday.
According to the CMS, the inquiry focused on two issues: Whether there was racial discrimination by medical schemes against black healthcare providers; and procedural fairness in the treatment of black healthcare service providers.
The panel developed a tool to measure the performance of medical schemes’ fraud, waste and abuse systems, looking at discriminatory outcomes or unequal treatment for healthcare providers.
“This risk ratio is basically a tool that we developed to work out the likelihood that a black practitioner would be subjected to an investigation, a finding and a penalty, versus a white practitioner,” said Ngcukaitobi, adding that the panel looked at risk ratios across different medical disciplines and years, between 2012 and 2019.
The findings included: In 2014, black dental therapists under the GEMS medical scheme were about three times more likely to be investigated and found guilty of fraud, waste and abuse than white dental therapists; In 2017, black psychiatrists under Discovery were about 3.5 times more likely to be investigated and found guilty of fraud, waste and abuse than white psychiatrists; and In 2018, black anaesthetists under Medscheme were about 6.5 times more likely to be investigated and found guilty of fraud, waste and abuse than white anaesthetists.
Ngcukaitobi said there was scope to improve the methodology used by the panel to determine the probable risk ratios for different years and disciplines.
The panel has proposed several reforms to improve transparency and fairness:
- Early Warning System: Schemes must notify practitioners immediately if there is any suspicion of misconduct, giving them a chance to respond before punitive action is taken.
- Clawback Review: The current three-year retrospective clawback period must be reviewed to avoid unjust financial burdens on practitioners.
- Legal Support Mechanisms: A neutral tribunal or legal aid structure should be established to support practitioners during FWA investigations.
- Algorithm Transparency: Schemes must disclose the AI and software used to detect FWA to a regulatory body like the Council for Medical Schemes (CMS) to ensure accountability and fairness.
Ngcukaitobi also emphasised the need for annual racial risk ratio audits by schemes to monitor and correct potential discriminatory trends before they become entrenched.
The Board of Healthcare Funders (BHF), a nonprofit company representing medical schemes and administrators, released a statement rejecting the panel’s findings on Monday.
“We still need to study the final report. However, we are disappointed that the section 59 inquiry panel has confirmed that it has upheld the findings made in the interim report released in 2021. We believe these findings are demonstrably and fundamentally flawed and, if allowed to stand, will open the door for runaway fraud and corruption in the healthcare sector,” it said.
The board said fraudulent claims, overservicing, abuse of benefits and improper billing practices cost South Africa’s medical schemes about R30-billion each year.
“Based on comments made by the section 59 inquiry panel in today’s media briefing, the BHF believes that the final report continues to be underpinned by serious methodological and interpretive flaws, all of which we raised following the release of the interim report in 2021, “it said.