Health: millions lost due to fraud, waste

Henriette Lamprecht – Fraud, waste and abuse relating to healthcare annually cost the industry millions if not billions of dollars. According to Bertie Gagiano, senior manager at Medscheme Forensics, this leads to increased healthcare costs as well as medical aid contributions.

At Namibia Media Holdings’ (NMH) Business7 breakfast focusing on healthcare, Gagiano yesterday emphasised that awareness is needed in order to spot and identify fraud, waste and abuse in the industry.

He described fraud as the wilful misrepresentation of the facts in order to illegally obtain financial gain at the expense of someone else.

“Waste generally relates to wasteful expenditure and providing services not needed and charging for such services. It is therefore the useless expenditure or consumption, squandering of money, goods, time, effort, etc.,” Gagiano said.

Waste relates to failures of care delivery, the failure of care coordination, overtreatment and pricing failures. Examples of fraud include false claims, member collusion, provider syndication, the sharing of membership cards as well as the non-disclosure of conditions.

'Intentional'

According to Gagiano abuse cannot be differentiated categorically from fraud, because the distinction between “fraud” and “abuse” depends on facts and circumstances, intent, prior knowledge, and available evidence, among other factors. Abuse is most often defined in terms of acts that are inconsistent with sound medical or business practice.

“Unlike fraud, abuse is an unintentional practice that directly or indirectly results in an overpayment to the healthcare provider. It is similar to fraud, except that the investigator cannot establish if the act was committed knowingly, wilfully, and intentionally.”

According to Gagiano the use of the term “intentional” is therefore important in defining fraud and abuse and in identifying ethical or unethical actions. Examples of abuse include over-charging, ‘code-farming’ or ‘up-coding’, improper billing practices and the substitution of services.

Challenges

According to Gagiano challenges to tackle these abuses are that all claims are paid in good faith, while authorisation is not a guarantee of payment and only a confirmation of member status and available benefits. Other challenges include the code and tariff structure of the Namibian Association of Medical Aid Funds (NAMAF) and the question weather healthcare should be treated as a ‘commodity’ or as a ‘moral’ service offering.

Gagiano said claims must be paid within 30 days, is emotive in nature, with huge volumes being processed while it is paid in good faith. He also emphasised the difficulty to prove intention. Gagiano further explained a multi-faceted approach to fraud prevention is needed and which includes enhanced member education, focused practitioner engagement, the change of billing behaviour as well as the sharing of information.

Figures

According to him statistics for 2017 revealed R311 million could last year in the private health care industry in South Africa be contributed to fraud, waste and abuse. Almost 1 600 calls were received by ‘whistleblowers’ in the country to report fraud and abuse, while 48 complaints in this regard were lodged at the Health Professions Council of South Africa.

Gagiano emphasised the onus is on the provider to prove validity of claims.

“Forensics must be scientific, fair and responsible. The law is sufficient if applied correctly.”

Members of medical aids can join the fight against abuse and fraud be understanding the services being provided. This includes the monthly medical aid statement which reveals very important information regarding services that were rendered to the member. Members should lookout for over servicing, duplication of claims, the incorrect reporting of diagnosis or procedures, alteration of treatment dates as well as unnecessary treatments or dispensing of medications.