Healthcare industry needs collaboration to curb fraud waste and abuse

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Healthcare Forensic Management Unit (HFMU) has started collaborating with other fraud combating institutions, Dr Katlego Mothudi, Board of Healthcare Funders (BHF) managing director said. He believes there is a need for synergy between the healthcare sector, law enforcement agencies, the legal fraternity, and prosecutorial agencies,

“The work that we do focuses on some of the elements on fighting fraud and money recoveries. We want also to extend that to successful prosecutions of the fraudsters. At the moment, there is a formalisation in the process of a relationship with the Special Investigations Unit (SIU). We have drafted a memorandum of understanding which will be signed off in the next few weeks,” Mothudi said.

The problem faced by the industry now is that it is thinking on fraud, waste and corruption is too small. Preventing fraud in the healthcare sector will make healthcare affordable and will also bring long-term benefits to the sector.

Win-win

“Our expertise in the private sector on fighting fraud gathered over time could help in making sure that we also protect the funds that will be deployed in the National Health Insurance vehicle in collaboration with those resources that are currently in the state. So, it is a win-win situation,” Mothudi added.

Council of Medical Schemes (CMS) Senior Health Economist, Nondumiso Khumalo, said when looking at the impact and threats fraud poses to healthcare the industry needs to adopt a holistic picture that includes suppliers, manufacturers, providers and consumers.

“Impact is felt at a financial level when administrators incur costs. The quality of healthcare is affected because of the deviation of costs," he said.

According to CMS in 2017 the proportion of claims attributed to fraud, waste and abuse amounted to R30.15bn. From a global perspective, the exposure rate to corporate fraud has risen by 28% since 2007 from an industry average of 8%. In South Africa, estimates range from 3 to 15% of claims.

Khumalo added that as a cost driver in medical schemes fraud contributes to the costs barrier to entry and has left the membership stagnated at 8.8-million lives.