A whistle-blower who has made explosive allegations that Mediclinic hospitals are guilty of irregular billing practices this week sent details of where auditors can start their investigations.
The email, which Daily Maverick has a copy of, details how the paper trail can be traced and which responsible parties should be interviewed and questioned. The email sent by the whistle-blower on Monday seems to be a direct response to an invitation from Mediclinic’s chief executive, Greg van Wyk, for more details. In an emailed response last week, Van Wyk challenged the whistle-blower to come forward.
In his email, cc’ed to medical schemes and various media, Van Wyk said:
“Upon learning of the first e-mail containing the first set of allegations, the leadership of Mediclinic immediately commissioned an independent forensic investigation by ENSafrica, a reputable law firm to investigate the allegations and the implicated hospital operations. I can share here that the forensic lawyer from ENSafrica who will lead the investigation is Mr Steven Powell, a highly credible and independent forensic expert. He is familiar with independent investigations of this nature and has a sound understanding of the business dynamics of the healthcare industry.
“I would like to invite you to engage directly with the appointed independent forensic lawyer, Mr Powell, (spowell@ensafrica.com) to shed more light on the allegations you make in the e-mails.
“We view the accusations in an extremely serious light as they impact business-critical and valuable relationships with employees, patients, doctors, healthcare funders and other stakeholders. Again, I stress to you and those copied here that Mediclinic prides itself on applying uncompromised ethical practices throughout every aspect of its entire business.”
Mediclinic reiterated this in its response to questions from Daily Maverick.
The response from the whistle-blower has been swift, with details of how the alleged fraud spans different job functions from reception to the billing department, case managers, confirmation clerks, credit controllers and patient admin managers. The allegations have opened a can of worms and sparked investigations across the medical schemes industry.
Medical scheme administrators investigating
Ryan Noach, the chief executive officer of Discovery Health, says the medical scheme has already commenced an investigation into relevant claims from Mediclinic.
“We have been assured by Mediclinic of a full and thorough investigation into the matter, including a comprehensive report back on the findings and outcomes of the independent review they have commissioned. Discovery Health Medical Scheme will determine what further action is required from these external and internal investigations,” Noach said.
Likewise, Medscheme (owned by Afrocentric) has indicated that it will be conducting its own investigations, as has Momentum Health Services.
However, Jeremy Yatt, principal officer of Fedhealth, one of the many medical schemes contacted by the whistle-blower last week, said he would be “very surprised” if Mediclinic management was found to be guilty.
“At a hospital level, maybe an employee is trying their luck, but it seems unlikely that this was [company] policy, as alleged,” he said, adding that hospitals don’t need to resort to fraud, since they already account for the lion’s share of medical schemes expenditure.
Medical schemes spent R74.3bn on hospitals in 2021
The latest industry report from the Council for Medical Schemes, which has also voiced its concern, pegs hospital expenditure by medical schemes in 2021 at R74.3-billion.
According to the report, the average amount paid per beneficiary for hospital services increased by 18.56% to R8,346.40 from R7,039.74 in 2020. Just over 92% of the total hospital expenditure was paid to private hospitals. Expenditure on hospital services paid on a fee-for-service basis amounted to R57.34-billion in 2021, and close to 64.39% of this was attributed to ward fees, theatre fees and consumables, with expenditure on medicines (in-hospital) standing at R5.07-billion.
‘Reimbursement would be the minimum’
Damian McHugh, the executive head of marketing at Momentum Health Services, confirmed the administrator had launched its own comprehensive retrospective investigation going back at least a year. Although the investigation is focused on Mediclinic, McHugh said forensic investigators may take a closer look at the billing practices of the other private hospital groups.
“This could just be a disgruntled former employee, but the level of information is detailed and they seem to know exactly what they are talking about. If these allegations are true, it would be quite alarming. I think at the very least, medical schemes will expect to be reimbursed where there was incorrect billing applied,” he said. The Council for Medical Schemes made a similar statement over the weekend.
McHugh also noted that the problem might be confined to the six hospitals mentioned by the whistle-blower, rather than a company-wide problem.
“There’s just no way to know until we investigate. We are liaising with Mediclinic and will compare investigation results once the process is complete. This is a lot of data we are talking about,” he said.
The six hospitals that the whistle-blower has singled out are Mediclinic Kloof, Mediclinic Morningside, Wits Donald Gordon Medical Centre, Mediclinic Cape Gate, Mediclinic Vergelegen, and Mediclinic Panorama. DM