KZN residents most likely to use hospital cash-back plans for fraud

2014-08-26 12:27

KwaZulu-Natal can add an unwelcome feather to its cap: its residents are leading the charge when it comes to defrauding medical aid schemes.

The Discovery Group’s head of forensic services Marius Smit today presented data at the Board of Healthcare Funders’ conference in Durban outlining the problem of hospital cash-back plan fraud.

These plans are sold by insurance companies to provide beneficiaries with a lump sum if they are hospitalised. This helps patients whose medical schemes don’t fully cover time in hospital.

But, Smit said, some people are colluding with doctors and hospitals to be admitted for long periods – when they’re not even sick.

Then they submit claims to insurance companies and are paid between R3 000 and R5 000 for each day spent in hospital.

Smit said this kind of fraud was particularly rife in KwaZulu-Natal but was starting to rise in Gauteng and Limpopo.

The statistics he presented showed that, on average, those Discovery members who have cash-back hospital plans are admitted to hospital five times more than those who don’t.

Their hospital stay is also 40% to 60% longer than those who don’t have it.

Smit said they had been aware of the problem for a while, and had now identified “high risk” members, hospitals and doctors. He refused to reveal names, but said some members had already been expelled from the scheme.

“But no criminal charges were brought against them because it is difficult to get evidence.”

Discovery has also introduced a form in some “high risk hospitals” that patients must fill in to disclose whether they have a hospital cash-back plan or not.

Peter Kerford, the head of forensic investigations at MMI Holdings Ltd, said the insurance industry wasn’t just sitting back and letting fraudsters play havoc with medical schemes.

“We are tracking claims and have flagging systems in place to pick up the high risk players. We also have cancellation clauses in our contracts but it is not easy to cancel a contract when a person has proof that he or she was admitted in hospital,” he explained.

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