Syndicates Taking Medical Schemes for Ride in South Africa

Crooked doctors and hospital admission clerks are at the centre of syndicates illegally benefiting from hospital cash plans, according to Discovery Health CEO Dr Jonathan Broomberg

Offered by companies such as Standard Bank, Old Mutual and Clientele Life, hospital cash plans can offer R5000 per day to patients that are hospitalised for more than a certain amount of days. Premiums can cost as little as R99 a month and are designed to help families cover the costs that come with serious illness, including loss of earnings. Patients usually also a medical aid to cover medical expenses..

Some cash-strapped families are colluding with syndicates that help them to admit a family member to hospital under false pretenses so that they can pocket an extra R10 000 to R15 000.

Read: Be SA's medical scheme champion

Meanwhile, medical schemes are left with a hospital bill that could be five times that, according to Broomberg, who says the country's largest medical scheme is cracking down on the practice.

What did Discovery health find out?

As part of a three-hospital survey, Discovery Health found that admission rates among their members with hospital cash plans were as much as 5.5% higher than members without such insurance. Hospital stays among cash plan members were also up to 60% longer, according to figures presented at a Discovery Health media summit held yesterday.

Discovery, insurance providers clamping down

" If we know you have a cash plan... we'll scrutinize more before we give an authorisation."

Discovery Health is already sharing information with several major hospital cash providers, which means the medical scheme knows which of its members also have the cash plans.

"We're trying to shut it off at the source," Broomberg said. "Now, if we know you have a cash plan, we are being more careful and we'll scrutinize more before we give an authorisation (for hospital admission)."

Broomberg says Discovery has only been able to prove fraud involving doctors and patients in a small number of cases thus far. However, the scheme has unearthed some outlandishly brazen cases including that of a 48-year-old woman who was admitted, on average, once about every five weeks for a urinary tract infection during the course of two years.

Read: Medical scheme dependants: who qualifies?

Cases of this kind of fraud seem to be concentrated geographically, he added and KwaZulu-Natal seems to be at the heart of the trend.

Face the consequences

But Broomberg warns that members found to be defrauding Discovery will have their membership terminated while doctors will be brought before the Health Professions Council of South Africa. Discovery will also recoup its costs from the hospital where the fraud took place, he added.

In 2013, Discovery Health recovered R300 million in fraudulent claims - or almost one percent of members' total annual contributions and Broomberg expects this figure to grow.

"We're finding that the more bodies we throw at this work, the more (money) we are getting back," said Broomberg, adding that he expects the scheme to save R500 million annually as the scheme's forensic unit exposes and cracks down on more fraud.

Read more:

The most common ways in which both members defraud medical schemes
Robbing the medical scheme
Scam threatens medical schemes

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