The Council for Medical Schemes (CMS) has called for an “objective and trusted authority” to conduct a “comprehensive, unhindered, and speedy” investigation into allegations of billing fraud at some Mediclinic hospitals.
Last week, a person who claims to be a former Mediclinic employee alleged that six Mediclinic hospitals in Gauteng and the Western Cape have been manipulating patients’ bills to save the hospital group money.
The six hospitals are Mediclinic Cape Gate, Mediclinic Kloof, Mediclinic Morningside, Mediclinic Panorama, Mediclinic Vergelegen, and Wits Donald Gordon Medical Centre.
The allegations were contained in an email sent to more than 50 principal officers of some of South Africa’s largest medical schemes, as well as News24 and Mediclinic’s management.
The medical bills that hospitals send to medical schemes for payment include an ICD-10 code, which identifies the procedure or medication. It was alleged that some Mediclinic staff manipulate the codes to benefit the group financially.
News24’s report on the allegations provided an example of how this was done: “The whistleblower alleges that when a patient died in a hospital emergency room, sometimes Mediclinic case managers were expected to change their accounts to reflect an ICU death instead. This is because of the fixed fees associated with emergency room deaths, which are lower than ICU-related fees.”
Mediclinic has appointed Steven Powell, the head of law firm ENSafrica’s forensics practice, to lead an independent investigation into the allegations. The investigation will also look into claims that employees were victimised for speaking out against the alleged practices.
Mediclinic said it views the accusations in a serious light but is confident Powell’s investigation will confirm its billing processes are accurate and ethical.
“However, should the external experts find any accusations true, Mediclinic will not hesitate to act decisively and appropriately to the findings,” it said.
In his email last week announcing the appointment of the independent investigation, Mediclinic’s chief executive, Greg van Wyk, invited the whistleblower to engage directly with Powell, to shed more light on the allegations.
On Monday, the whistleblower sent an email to Powell – copied to medical schemes and the media – alleging the fraud involves a range of personnel, including reception, the billing department, case managers, confirmation clerks, credit controllers, and patient administration managers. The email details how to trace the paper trail which people should be interviewed and questioned.
‘Members will run out of funds’
The CMS said it was “deeply concerned and disturbed” by the allegations of billing and other fraudulent activities. The CMS, however, has not received a formal complaint relating to the allegations.
The Registrar of Medical Scheme, Dr Sipho Kabane, said the regulator’s concern stems from “the real possibility” that the MediClinic hospitals may have acquired scheme members’ funds through fraudulent means.
“The consequences of these fraudulent transactions would have led to scheme members suffering premature exhaustion of their funds, leading to unnecessary out-of-pocket and catastrophic health expenditures” he said.
According to CMS 2022 medical scheme industry report, medical scheme members paid close to over R32 billion in out-of-pocket payments.
Business Day quoted Dr Ryan Noach, the chief executive of Discovery Health, as saying the Kabane’s statement about members being at risk of running out of funds was incorrect in the case of members of Discovery Health Medical Scheme (DHMS). Noach said DHMS does not impose limits on claims for hospital admissions.
Discovery Health, the biggest medical scheme administrator in South Africa, has initiated its own investigation into the allegations.
“We’re in touch with top leadership at Mediclinic and assured of their efforts to establish the truth. There is good faith in the 30-year contractual relationship, and we will do all [that is] needed to guarantee schemes and members of the fidelity of their funds and claims,” Business Day quoted Noach as saying.
Medscheme and Momentum Health Services are also conducting their own investigations.
The CMS said the investigation into the allegations should not only aim to obtain the names of the responsible parties but should also ensure that the funds involved are quantified and returned to their rightful owners, the scheme members.
It said the allegations underscored the CMS’s focus on combating fraud, waste, and abuse, and the need to ensure that all stakeholders in the healthcare value chain work together.
The regulator said medical scheme members should report any suspicious activity or lodge a complaint by phoning 086 673 2466 or emailing complaints@medicalschemes.co.za.
