Council for Medical Schemes ‘deeply disturbed’ by Mediclinic fraud allegations

The Council for Medical Schemes has sounded the alarm that as the medical schemes regulator, it is “deeply concerned and disturbed by the allegations of billing and other fraudulent activities levelled against hospital group Mediclinic”.

Although the council has not yet received a formal complaint, the allegations in recent media reports are viewed in a serious light. As per various media, including News24, eNCA and Radio 702, a whistle-blower came forward last week with explosive allegations that six Mediclinic hospitals in Gauteng and the Western Cape have been manipulating patients’ bills to save the hospital group money. The whistle-blower forwarded the claims to Mediclinic management, News24 and several medical schemes.

Codes changed for more lucrative billing

When hospitals submit medical bills to medical schemes for payment, they have to submit an ICD-10 code, which varies depending on the procedures carried out or the medication administered.

The whistle-blower, apparently a former manager who worked at at least one of the six hospitals, told News24 that, for example, “When a patient died in a hospital emergency room, sometimes Mediclinic case managers were expected to change their accounts to reflect an ICU death instead. This is because of the fixed fees associated with emergency room deaths, which are lower than ICU-related fees.”

The Council for Medical Schemes registrar, Dr Sipho Kabane, says his concern stems from the real possibility that medical scheme member funds may have been acquired by Mediclinic hospitals through fraudulent means.

“The consequences of these fraudulent transactions would have led to scheme members suffering premature exhaustion of their funds, leading to unnecessary out-of-pocket and catastrophic health expenditures,” he said. According to the latest annual council report, medical scheme members paid more than R32-billion in out-of-pocket payments last year.

Reimbursement called; for pending investigation

Kabane adds, “We [the council] are interested in the extent and depth of these possible fraudulent acts by hospitals. We are calling for a comprehensive, unhindered and speedy investigation of these allegations by an objective and trusted authority.”

Mediclinic, which is no longer listed on the JSE following a buyout by a Remgro/MSC consortium, has appointed Steven Powell, head of law firm ENSafrica’s forensics practice, to head an independent audit following the claims.

Kabane says the investigation should not just aim to apprehend the responsible parties, but should also ensure that the funds involved are quantified and returned to their rightful owners — the medical scheme members.

Members of medical schemes are encouraged to telephonically report any suspicious activity or lodge a complaint at (086) 673-2466 or to email [email protected]. If you have had experience of incorrect billing - with Mediclinic or another hospital group, share your story with us - email [email protected] DM