CPC Qualicare / DocWeb | Doctor's Online resource for South African Doctors

September 2018 Newsletter

FRAUD in the Medical Profession.

The Cape Argus of the 23 August 2018, in banner headlines, trumpeted that Medical Aid Fraud the Funders costs Billions!!! R 568 Million in 2017 to be more precise!!

Figures from Discovery Health show GPs and Pharmacies as being the “worst offenders”, with those in Gauteng and KZN topping the lists, and the Western Cape not too far behind!

Fraud is an intentional wrongful or criminal deception intended to result in financial gain to one party to the detriment of another.

  • It’s intention is to criminally deceive, in an attempt to obtain something of value that he/she is not entitled to under the law or rules governing the relationship.
  • It may involve collusion between a provider and a patient or can be done by a doctor on his own.
  • Fraud is not a victimless crime. It drives up the cost of care – Members pay higher or increased premiums.
  • It is a criminal offence.
  • It is estimated that 3-5% of the claims are fraudulent
  • The open ended Fee for Service system lends itself to dishonest behaviour as there is a third party payer.

How is Fraud perpetrated in the medical industry?

  • Phantom billing.
  • Ghost claims.
  • Falsification of information in medical records (this includes treatment of non-members).
  • Collison between patients and providers.
  • Billing for meds not dispensed or services or supplies not rendered.
  • Dispensing a Generic medicine, but billing for the Ethical one.
  • Billing for a PMB condition when it is not a PMB, to ensure medical aid payments are made.
  • Patients who have exhausted their benefits towards the end of the year asking the doctor to claim for these services in the New Year.
  • Misrepresentation of services with incorrect ICD/CPT Codes.
  • Upcoding/Miscoding.

CPC/Qualicare’s position:

CPC/Qualicare is totally opposed to any form of Medical Aid fraud, and states clearly that a provider’s affiliation to any IPA group or any pressure group or representative organisation cannot be used to defend or assist doctors who have committed fraud.

The courts are where these allegations need to be brought, and amounts greater than R100, 000.00 falls into the “Prevention of Organised Crime Act”. This is the law.

In the past years, Doctors have, rightly, registered their disapproval of certain unorthodox methodologies used by the Special Investigation Divisions of the Forensic Management Unit of funders, which fly in the face of the precepts of “Natural Justice”. Doctors cite instances of unlawful methods of ensnaring and entrapment, setting up of the doctors, and playing upon the asymmetry of information, innuendo and the emotions of the doctor when faced with an ill patient who is not in benefit. Certain doctors caught in the net also allege that they were even offered acutely ill patients in urgent need of treatment accompanied by a “plant “from the funder, to “tempt” the doctor into seeing the patient who was in dire need of treatment.

Qualicare and IPAF have engaged with the funders since we first raised this with them in 2015 when this first came to light, and many of them have cleaned up their act accordingly, as we made it clear that we could not support either side breaking the law selectively.

Funders response:

The Funder have further advised that they worked from tip offs, whistle blowers, or from statistical information which reveals out of the ordinary claiming patterns, which then triggered a closer inspection of the practice and which could culminate in the placement of a number of “plants”.

They emphasised that none of the plants were ever acutely ill or feigned illness, none of them were instructed to try to entrap the doctor and that none of them or the investigators worked on a commission.

After an “encounter” with a suspected doctor, the funder would carefully store all of the evidence (medicines dispensed placed into sealed containers), analyse all of the data, view the videotapes taken by hidden cameras, then await the accounts and reconcile them against the services rendered and medicines dispensed, to look for discrepancies.

These would be logged and the process repeated up to 6 times, where after, if the evidence suggested fraudulent activities, the doctor would be requested to meet them to discuss their positive findings.

Funders emphasised that they have a fiduciary duty to protect their members from theft and abuse of funds, something which Qualicare fully understands and accepts.

Further higher level meeting held between IPAF and the funders were held:

Any asymmetry of information, suggestion of coercion, use of unreasonably short response time frames, failure to hear and consider the other side’s story, test the other sides evidence and any element of simultaneously being judge, jury and executioner was rejected by Qualicare as unacceptable.

The problem comes in as to how this has been proven, and whether the Acknowledgement of fault, and the resultant Acknowledgement of Debt signed by the errant doctor, has been extracted in line with the tenants of Natural Justice.

The current methodologies as to how the scheme has proven the allegations, the asymmetry of information at the interview, and the inability of opportunity to prepare any form of defence will just not stand up in a court of law.

Should you just pay up?

So, if you have committed fraud, and have been caught with your “hand in the cookie jar” should you make the funders an offer of a percentage of that which they have estimated you owe them?

HPCSA says a clear “NO!” and indicates that it is an ethical offense to do so without the matter being adjudicated by them. They insist that all allegations of fraud must be reported to Council and that doctors should not become involved in negotiations with funders in mitigation or defence of a medical aid Forensic unit’s allegations of fraud or theft, or in payment of amounts calculated as restitution by funders.

It appears however that doctors and funders want results which speedily address the problems, and possibly the perceived delays at the HPCSA may put them off. Remember that until this is done, the funders will have suspended direct guaranteed payment to the practice in question, and choke off it’s life line of income.

Bottom line …. How much could it cost you?

HPCSA aside, funders do have a minimum amount in mind which they want to recoup, a bottom line, so to speak, below which they will refuse to negotiate, and will instead turn the entire matter over to the SAP, SARS, HPCSA etc. etc.

Their current formula is rather simplistic. They request that you repay them:

  • The number of positive plants divided by the total number of plants is % term, (lest say 6 plants were all positive, so this is 100%. Multiplied by
  • The average overcharged on each positive plant, let’s say R 120.00, Multiplied by
  • The total number of patients belonging to that medical aid, seen during that year, lest say 960 patients
  • Multiplied by 3 years.

Thus say that your practice is positive for fraud in 100% of all plants, and your average overcharge is R 120.00 then it is calculated as:
100% x R 120.00 X 960 patients per year from that funder X 3 years = R 432,000.00 payable over 10 months in PD cheques!!

From this you will see that currently neither side approaches this scientifically, openly, honestly or within the bounds of Natural justice. Neither has the answer, nor moral high ground.

Its “set a thief to catch a thief….”

We have had responses to a previous article written some years ago on this topic and have had doctors say: “Fight Fire with fight fire”? “Play dirty back”……. Remember that if we break down the rules of Natural Justice, the whole of society will soon follow, and where will it all end?

From the doctors point of view, they seem to be able to make it “go away” by paying up, based upon the evidence which is presented to them, often in the form of clandestine, but irrefutable video camera evidence, proving that the doctor has defrauded the fund but not showing the quantum. And it is the quantum which is so highly debatable.

An immediate suggestion is that funders use biometric data to identify card holders and rather beef up their cards instead of spending huge monies on sophisticated fraud busting equipment.

We know that the smallest minority of doctors indulge in fraudulent practices, and to them, we say that you need to clean up your act fast.

What are the Principles of “Natural justice”

These principles of natural justice were derived from the Romans who believed that some legal principles were "natural" or self-evident and did not require a statutory basis.

Whenever funders initiate a procedure against a doctor they must adhere to these minimum/natural/self-evident principles.

These include:

  • Being notified of the exact particulars of the complaint with enough time and info to prepare a proper answer to such a complaint
  • To be able to properly offer a response to a clearly set out complaint and to be heard and objectively evaluated by a nautical responsible facilitator.
  • The principles of natural justice concern procedural fairness and ensure a fair decision is reached by an objective decision maker.

    Maintaining procedural fairness protects the rights of individuals and enhances public confidence in the process.

    The process relies upon audi alteram partem (the right to be heard) and nemo judex in parte sua (no person may judge their own case) apply.

    These two basic legal safeguards above, govern all decisions by judges or government officials when they take quasi-judicial or judicial decisions.

    Three common law rules are referred to in relation to natural justice or procedural fairness.

    The Hearing Rule

    This rule requires that a person must be allowed an adequate opportunity to present their case where certain interests and rights may be adversely affected by a decision-maker.

    To ensure that these rights are respected, the deciding authority must give both sides equal the opportunity to prepare and present evidence and to respond to arguments presenting by the opposite side.

    When conducting an investigation in relation to a complaint it is important that the person being complained against is advised of the allegations in as much detail as possible and given the opportunity to reply to the allegations.

    The Bias Rule

    This second rule states that no one ought to be judge in his or her own case. This is the requirement that the deciding authority must be unbiased when partaking in the hearing or making decisions. No one side can act as judge and jury simultaneously. This rule is stil almost always lacking in SID investigations and subsequent meetings with the suspected doctors.

    Additionally, investigators and decision-makers must act without bias in all procedures connected with the making of a decision.

    A decision-maker must be impartial and must make a decision based on a balanced and considered assessment of the information and evidence before him or her without favouring one party over another.

    Even where no actual bias exists, investigators and decision-makers should be careful to avoid the appearance of bias.

    Investigators should ensure that there is no conflict of interest which would make it inappropriate for them to conduct the investigation.

    The Evidence Rule

    The third rule is that an administrative decision must be based upon logical proof or material evidence.

    Investigators and decision makers should not base their decisions on mere speculation or suspicion.

    Rather, an investigator or decision maker should be able to clearly point to the evidence on which the inference or determination is based.

    Evidence (arguments, allegations, documents, photos, etc..) presented by one party must be disclosed to the other party, who may then subject it to scrutiny.

    We hope that this article will be useful to our Members and Shareholders.

    Please send your questions / comments and queries to [email protected] and we will respond.

    Tony Behrman and the CPC/Qualicare team  

Last modified on Tuesday, 08 May 2018

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