hospital
(Photo by Martha Dominguez de Gouveia on Unsplash)
  • Almost 40% of Discovery's medical scheme fraud cases involve fake claims for services not rendered.
  • Discovery, the largest medical scheme in South Africa, says it recovered R555 million in fraud and wasteful expenses last year.
  • The highest prevalence of medical scheme fraud is in Limpopo.

Discovery continues to battle medical scheme fraud - particularly for fake claims submitted for services not rendered, it said on Monday..

Discovery is the largest open medical scheme in South Africa, with almost three million members. Last year, Discovery Health recovered R555 million in fraud and wasteful medical expenses last year. 

It employs 100 analysts and investigators, and has a proprietary forensic software system that uses algorithms to identify any unusual claim patterns.

“Invaluable tip-offs from whistle blowers also help to identify fraud, waste and abuse,” says Discovery Health CEO, Dr Jonathan Broomberg.

More than 5,400 suspicious cases were reported last year, with 75% confirmed to be irregular. 

“Although we have secured large recoveries as a result of our fraud, waste and abuse avoidance efforts, we believe that this is only part of the story, and fraudulent activity and billing abuse most likely costs medical aid schemes several billion rand per year," Broomberg said. 

See also: Discovery Vitality made a massive R603 million profit last year – as members fail to use their perks

These were some of the fraud trends from last year:

Fake claims were the main problem

The most common type of Discovery medical scheme fraud was for claims submitted for services not rendered. This represented 40% of all medical scheme abuse. Another big problem was procedural codes applied incorrectly by healthcare providers – e.g. using a code that carries a higher value than the service performed.

“(Forensic) investigations reveal that a minority of healthcare professionals committed fraud against medical schemes, resulting in significant costs to schemes and their members,” explains Dr Broomberg.

See also: Discovery is paying R23 million a month to rent its shiny new head office, which has a roof-top running track

Limpopo is a fraud hot spot

Limpopo continues to be the biggest problem region: 201 cases of fraud and waste per 100,000 Discovery medical scheme members have been confirmed.

Limpopo is followed by the Free State and the North West (89 cases each).

The Western Cape and Northern Cape had the lowest prevalence of fraud and abuse cases among members.

These were some of the biggest scams:

Discovery picked up that a registered nurse’s income climbed to R500,000 per month, which coincided with a spike in claims for a very expensive intravenous feeding product at another hospital.

An investigation revealed that the nurse was working with a nursing sister to submit fraudulent claims under the nurse’s practice number. They shared the proceeds. A criminal case has been registered against both individuals for fraud of more than R3 million.

See also: Discovery Vitality is starting to demand that you tag out of gyms as well as into them – to stop fake, no-exercise visits

There was also a big scam in oxygen rentals. One supplier of oxygen concentrators and portable concentrators charged Discovery more than R2 million, but it was then revealed that invoices were fiddled with and that members weren’t getting the units. Some of the oxygen devices were sourced from China and prices inflated ten times.

“As a criminal offence, healthcare fraud, waste and abuse not only tarnishes the good name of honest health professionals but is a grave injustice against medical aid members, driving up premiums and depriving them of benefits,” adds Broomberg.

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