Press release by the Board of Healthcare Funders of Southern Africa in response to the HPCSA allegations of extortion by Medical Schemes

Fraud and wastage is an enormous problem for medical schemes and a conservative estimate is that as much as R7bn – R10bn of monies paid out annually by medical schemes are lost, due to fraud, abuse and over-servicing.

Fraud and abuse contributes significantly to the high cost of private healthcare and directly impacts on the pockets of the consumer. In terms of the Medical Schemes Act, medical schemes are legally obliged to act in the best interest of their members. This includes recouping monies that has been lost by members due to fraud, over-servicing and other wastage. There is clear legal precedence for medical schemes to recoup money owing to their members.

In order to ensure the sustainability of the industry, fraud needs to be dealt with decisively. The industry is not only under pressure from consumers to control the cost of healthcare, but also from government.

We strongly disagree with the HPCSA that wherever a settlement agreement is reached it amounts to extortion. We do not condone extortion or any illegal action by medical schemes, however we do not view mediation meetings and the recouping of member money as extortion as is purported by the HPCSA. We do not agree with the HPCSA that recouping of monies gained through fraudulent activities amount to prosecution. An example of this could be in a case of shoplifting - returning the item to the shop once the shoplifter has been caught, does not amount to prosecution.

One of the reasons The Board of Healthcare Funders’ Forensic Management Unit (FMU) was established, was to ensure that the investigation of fraud and abuse within the private healthcare sector, is conducted in an ethical, transparent and legal manner. All participants of the FMU are required to report matters to the relevant authority where there is a legal obligation to do so. The FMU will under no circumstances condone illegal or unethical conduct by any of its members, however, will strongly support and encourage its members to recover any monies lost due to fraud and abuse. It must be remembered that any monies lost by medical schemes due to fraud and abuse, in fact belong to the members contributing to those schemes and the trustees have an obligation to ensure that these monies are recovered as far as possible.

We support the HPCSA’s commitment to ensure that all practitioners registered under the Health Professions Act practice their professions ethically, professionally and with dignity. We also agree that any form of misconduct including fraudulent behaviour and/or over-servicing should not be tolerated.

It must be noted that the fines and other sanctions by the HPCSA do not mitigate the loss to the members of medical schemes. Therefore, medical schemes are still obliged to recoup the losses incurred by their members.

There have been many constructive discussions between the FMU and the HPCSA since the inception of the FMU, with support by the HPCSA for the policies and procedures developed for the industry. We are therefore surprised that the HPCSA has not contacted the FMU regarding their allegations. We appeal to the HPCSA to provide the FMU with actual cases of the alleged extortion so that a proper investigation may be conducted with the medical schemes in question.

Released by The Board of Healthcare Funders of Southern Africa
Contact: Heidi Kruger – Head of Corporate Communications, PCNS and FMU
Tel: 011 537 0237
Cell: 082 905 1161