A common question doing the rounds across the health sector at the moment is what lessons have been learned from the COVID-19 pandemic. This was posed to Government Employment Medical Scheme (GEMS) principal officer, Dr Stan Moloabi, by Med Brief Africa co-editor, Roy Watson, to get some idea of the medical scheme experiences particularly in terms of fraud, waste and abuse…

RW: What lessons have the medical schemes learned from the COVID experience in terms of fraud, waste and abuse, if any?

SM:  We had a situation where there was a marked reduction in the non-emergency cases when people really only sought medical care when they’re very sick and COVID obviously dominated. So with this marked reduction saw a similar reduction in what may well have been cases that could have been attributed to fraud waste and abuse.

RW: What we have heard from market, or industry observers is that schemes actually benefited from this under-utilization  which led to significant savings and as you have indicated, lesser losses to fraud and abuse. What about wastage?

SM: Yes, there have been significant savings with the reduction in non-emergency cases and I think the industry in general saw an increase in the reserve ratios over that two year period when we were having under-utilization of particularly hospital cases. So to your point, the question that we are now asking ourselves, or the lesson, is how much of all this is pointing out what COVID managed to take out was generally wastage.

RW: Wastage in what respect?

SM: We do recognize that in that reduction there will have been those cases where people needed services but they were not sick enough and then they delayed seeking health care because of the lockdowns. So that reduction that we saw in the utilization of health care insurance could be as a result of a mixture of the two – those of which couldn’t be attributed to any element of fraud, waste and abuse. Remember when we talk about fraud waste and abuse we are talking about the fraudulent cases where there is an intent to defraud the medical scheme, the people for instance getting a sick note when they are not sick so that then you pay for it so that you don’t go to access the abuse element. Then we have the wastage which could be a mix of just over utilization where even the health care provider could be ordering tests that they did not necessarily need, so called over-servicing. So we know we have got those three elements in general when you talk about fraud, waste and abuse

RW: With healthcare needs and services returning to some form of normality, the number of claims must have picked up somewhat…?

SM: What we have started seeing is that there’s an uptick of claiming from the first quarter numbers and as such we are asking ourselves how much of that is due to just ordinary supply induced demand and how much of that could again be attributable to fraud, waste and abuse. We are really looking into this to make sure that what we are paying for in terms of claims are clinically appropriate, genuine valid claims.

RW: Getting back to the reduction, were there any specific trends worth noting in terms where the actual claims were coming from?

SM: One of the things we picked up when analyzing was that that the reduction was mainly in an age group of people who would be regarded as generally healthy. So during COVID most of the reduction was in the younger population of the medical aid. It makes sense: the older people are generally sick, the younger people would be expected to be generally healthy. However, although their utilization went down, they were utilizing during the pandemic – a very important observation which raises the question: was the utilization in that area appropriate? Is it one that can be attributable to fraud, waste and abuse or to supply induced demand?

RW: Have there been any noticeable changes in the types of fraud uncovered during COVID?

SM: Not really. We have the usual practices such as people claiming falsely, a person who’s using a false identity claiming to be a member and also possible collusion with a health care provider claiming for services that were not rendered. One of our biggest concerns at the moment, however, is organized syndicates committing medical aid fraud.

RW: This I remember, was bubbling up towards the end of last year, one of the examples having something to do with hearing aid claims in the Tshwane area. How do they actually go about their “business”?

SM: Syndicate fraud is now the one that seems to persist. We are picking up, for instance, practice identity theft by a syndicate. For example, we will find people in Gauteng claiming from practices in Durban and various parts of the country. That’s how those trends would be picked up and those are the types of syndicates that have become a real concern to us.

RW: But how do they steal practice identities?

SM: Somehow they get all the credentials of a practice and then they use these to claim. They are sophisticated enough to make sure that the money accrues to their bank accounts indicating that these are very sophisticated operators.

RW: Have any more of these syndicates been uncovered yet?

SM: There are those who have been identified who I cannot name. But then there was the Pretoria example you mentioned where 40% of our hearing aid claims were coming from one area. And many of the claims were for amounts far higher than the actual hearing aid cost. Something was obviously wrong and it turned out to be a syndicate.

RW:  A final point: an update on how you are progressing with the racial profiling issues implicating GEMS in the Section 59 investigation report.

SM: There are some positives resulting from the work we have been doing since the release of the interim report. When we look at our quarter one trends for 2022, in terms of the practitioners being put on indirect payment, we had among the lowest numbers. For instance, there was only one provider being put on indirect payment in quarter one. But those who were reinstated after interactions with the scheme through our Claim Risk sub-forum the number has increased significantly and we restored about 11.

RW: For those not too familiar with the situation, what does this really mean?

SM: The point here is that it’s a positive for engaging with the health care providers and it’s their rehabilitation that we are concentrating on. The message is that we are working on these issues, having committed ourselves to doing everything to try and address all the sensitivities around the Section 59 Interim Report in collaboration with those health care providers who are prepared to work with us on the outcomes of the Section 59 Interim Report.