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Fraud hitting hospitals

TOUGH ECONOMIC TIMES invariably mean an increase in fraud. A number of business sectors see that: such as short-term insurance companies that have to investigate more dubious claims (including ghost cars that are insured, stolen but never existed).

It's also hitting the healthcare industry, particularly private hospitals. And in many cases hospital managers say medical aid schemes compound the problem.

Hennie Steenkamp, manager of the Wilmed Park Private Hospital in Klerksdorp, says the most common type of fraud is misrepresentation. "People come to our hospital pretending to be the wife or husband of a member when in fact they are not. We get the authorisation for the requested procedure and then medical schemes refuse to pay when they discover the patient wasn't a beneficiary of the scheme. Our hospital fees and the doctor's fees are simply not paid."

Apart from financial pressure on consumers, adding to the uncertainty about whether medical bills will be paid is the scrapping of the ethical tariff in November last year. That was the maximum a doctor was allowed to charge as determined by SA's health authorities. National Hospital Network (NHN), SA's fourth largest private hospital group, says the ethical tariff was replaced with a requirement stipulating patients should agree to liability for fees charged over the suggested National Reference Price list.

However, in emergency situations the first priority is treating the patient. The necessary documents aren't always signed, increasing the risk of doctors treating emergency patients and not being paid.

According to NHN CEO Otto Wypkema the removal of the ethical tariff is just one more in a long list of reasons some bills will remain unpaid and with rising misrepresentation and fraud increasing bad debts are being absorbed by hospitals.

Another type of fraud being seen is lapsed members of medical schemes being admitted to hospital knowing they aren't eligible for treatment because they hadn't paid their medical scheme premiums for several months.

Steenkamp says inefficient medical scheme administration records often compound the problem. "It's not uncommon for a medical scheme to authorise a procedure and then inform the hospital it wouldn't pay outstanding bills because the member's premiums weren't up to date. In such cases it may be worth our while to pay the outstanding premiums - which may be R7 000 or R8 000 - in order to recoup an expense of R40 000 or R50 000."

While you can perhaps sympathise with medical scheme members unable to meet premium payments, it all seems rather unfair on the hospitals if the schemes' administrations can't detect lapsed members.

Another common type of fraud is the attempted use of medical scheme benefits after the principal member has been retrenched and is no longer eligible for treatment, says Firoze Habib, of the Louis Pasteur Hospital in Pretoria. "People who were previously members of restricted schemes come into our hospital knowing they don't qualify for medical scheme benefits.

"In the case of restricted medical schemes, membership is a condition of employment and falls away if the member is no longer employed by the company. And yet when we phone for authorisation for a procedure for a retrenched patient, it's not uncommon we're given the go-ahead, as the records showing the employment status of the patient aren't up to date. The medical scheme then backtracks on the authorisation process and refuses to pay us."

Another example of inefficient medical scheme administration comes from Ken Ford, spokesman for the Sunshine Hospital in Benoni. He says there have been cases where the hospital's admission staff had obtained authorisation from the medical scheme, the procedure had been performed and then the medical scheme refused to pay because the maximum limit for that category of procedures for the family or individual had been exhausted. "That in spite of the correct authorisation process being followed."

Keith Bonsall, manager of the Ethekwini Hospital and Heart Centre in Durban, says the level of fraud is ludicrous. "We will, of course, remain a patient-centred hospital despite the new regulations. And, yes, our unpaid bills will go up. Ultimately, it will be the people who do pay who will bear the cost over the longer term. Hospitals will have to charge higher fees in order to recoup their losses from non-payers."

There are often justifiable complaints about hospital and doctors' fees and medical inflation. But on the other side better administration of medical schemes could perhaps help the general price escalation problem.

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