How to protect your medical aid scheme account from fraudsters

Two Capetonians were caught off guard this week when their medical savings accounts were plundered by a fraudster to buy thousands of rands’ worth of over-the-counter (OTC) medication at pharmacies across the city.

Joy Robertson of Table View says she and her husband Lyle have a big medical savings account via their Discovery Health medical scheme membership, as they don’t use their medical aid often. “We had about two years’ worth of savings in the account. I usually do check our email notifications from Discovery Health, but for some reason we did not receive emails about these transactions. The fraudulent transactions took place between 8 February and 19 February at various pharmacies around the Blouberg, Milnerton, Goodwood, Brackenfell and other northern suburb areas. The pharmacies that the criminal purchased from included Clicks, Dis-Chem, M-KEM, Spar Pharmacies and Medirite. His modus operandi seems to be calling in the order telephonically or mailing it to them and then just collecting the medication,” she says.

Robertson’s medical savings account was looted of roughly R41,000 in this way. She says only two pharmacies seemed to use the proper protocols, requesting an identity document for verification and declining to process the purchase. “Discovery Health was great. We reported it to them immediately and they really tried to help. They changed our membership number three times and completely blocked our account to stop this chap,” she says. Discovery also reinstated the full medical savings due to the Robertsons and will most likely recover the funds from the pharmacies that failed to carry out due diligence by requesting proof of identity and the medical scheme membership card.

Meanwhile, pensioner Nicolaas Loubser, who is also a member of Discovery Health Medical Scheme, was having a similar experience. “On Friday, 4 March, I noticed my medical savings account was almost empty. I quickly checked and realised someone had used my savings at five different Clicks stores, including the ones at Capegate, Sea Point and Cavendish. I immediately called Discovery requesting an investigation. Although they responded immediately by issuing me with a new membership number, the purchase of the OTC medication continued until Tuesday, 8 March,” he says.

The fraudster was finally stopped in his tracks when Loubser received a call from a pharmacy nearby asking if he was aware that someone was in-store trying to buy OTC medication on his account. The quick-thinking pensioner told the pharmacist to stall the person and rushed over to meet his “sister”. “My heart was in overdrive because I was now standing right behind this lady. She told the pharmacist she was collecting for her brother, Mr Loubser. Meanwhile I was behind her, taking photos of her with my cellphone. When the pharmacist asked her if the man behind her was her brother, she turned around and said no,” he recounts. Loubser says he retorted with, “Neither are you my sister, and why are you defrauding my savings account?”

He then got hold of four security guards and accompanied the woman to the parking lot, where her accomplice was waiting in an Uber. “He got out quite calmly and asked me if I wanted to make a deal with him. What a nerve. The security guards locked him in a cage at 12.30pm and the police only arrived at 9pm. He has now been arrested and we have two cases against him so far, although we are aware that he has defrauded about seven other people,” Loubser says.

Roseanne Harris, head of regulatory and policy affairs at Discovery Health, says on average the administrator recovers about R500-million per annum in fraudulent claims across the 19 medical schemes it administers. “This is attributable to the rigour of proprietary systems in place to detect and investigate fraudulent and irregular claims. The aim of our forensic processes is to protect member funds. Without these processes in place, we estimate that the cost of medical aid cover would be circa 14% higher. All the recovered funds are paid directly to the medical schemes concerned and Discovery Health has no financial interest in the recovered amounts,” she says.

Harris says Discovery’s analysis shows that more than half of the cases investigated are triggered by whistle-blowers and member complaints. This includes cases where a member picks up that the medical scheme was charged for a service that was not actually provided. “Where the fraud recovery can be accurately linked to a specific claim, the recovered funds will be reallocated back to [the] member’s benefits, including medical savings accounts balances or benefit limits, as happened in these two cases,” she says.

By law, medical schemes are only permitted to remit payments to registered healthcare providers, so even in cases where fraudulent claims were paid out, this would have been to registered healthcare providers.

Discovery Health has invested substantially in claims systems that Harris says “are now sought after on an international scale”, to detect medical aid fraud, waste and abuse (FWA). “This ensures financial sustainability of the industry while protecting the schemes’ member funds. While most investigations are triggered by complaints and tip-offs, the balance of fraud is identified using proprietary forensic software that uses sophisticated metrics to analyse claims data and identify unusual claim patterns. We also deploy a specialised team of more than 100 analysts and professional investigators. This is a rigorous process with significant levels of oversight to detect irregular claims and to recover member funds,” she says.

How you can prevent fraud

Discovery Health and most other medical schemes offer multiple channels for reporting of potential FWA, including anonymous tip-off lines managed by independent service providers. Harris reiterates that member tip-offs account for approximately 50% of alleged irregularities investigated, so it is important that members notify their medical scheme to investigate payments on their benefit statement that do not look right.

Just as you should go through your bank statement meticulously each month to check that there are no fraudulent or incorrect transactions, you should also be regularly going through all communication from your medical scheme.

If you do suspect any billing error, you should immediately contact your medical scheme. Harris says although healthcare fraud from healthcare professionals is very rare, you should be aware of any suspicious transactions and alert your medical scheme if these are suspected. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.