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Fraud is defined as an intentional deception done for personal advantage or to harm another person.
Fraud is both a criminal offence and a civil law offence. The most prevalent goal of fraud is to defraud individuals or entities of money.
Healthcare fraud is defined by the Association of Certified Fraud Examiners as a deceit or misrepresentation made by a person or entity with the knowledge that the misrepresentation would result in some unlawful benefit to the individual or entity or another party.
The most prevalent type of fraud is a false statement, a misrepresentation, or a purposeful omission that results in benefits that would otherwise be rejected being awarded.
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The industry impact of medical aid fraud
The financial burden of medical aid fraud and irregular practises in the private healthcare industry is anticipated to add around R22 billion per year to the overall yearly cost of private healthcare in South Africa.
This bill, in turn, must be borne by all South African members of medical schemes. Any benefit provided by your programme to which you (or your service provider) are ineligible is paid for at the expense of all other members.
Healthcare fraud is a sort of white-collar crime that involves the submission of false medical claims.
This form of fraud can be committed in a variety of ways. Individual members, healthcare professionals, and criminal syndicates can all be perpetrators.
One of the negative consequences of rising premiums as a result of fraudulent activity is the issue of affordability, with the private healthcare sector gradually becoming inaccessible to people who may no longer be able to afford the premiums.
The ensuing domino effects are massive on multiple fronts.
Analysing and deconstructing the distinctions between fraud, waste, and abuse would aid in the creation of a better understanding for all stakeholders in the healthcare industry, including members and beneficiaries of medical schemes and health insurance products.
Healthcare fraud is one of South Africa's fastest rising crimes today. Healthcare fraud, classified as a white-collar crime, drains vast sums of money from the South African economy each year.
According to one expert, the figure is R930 million every year, and weak conviction rates are partly to blame for the surge in this form of crime.
The core issue in healthcare is that nobody measures collective losses, and the quantum is simply an estimate of losses across the entire sector.
Waste and abuse are as detrimental as fraud, and both have a direct impact on other medical scheme participants, including the viability of the private healthcare sector and the economy.
Final thoughts
Healthcare fraud, waste, and abuse plague all healthcare insurers in South Africa, and as a result, the solvency ratios of several medical schemes have been significantly impacted.
The unfortunate reality is that fraud, including benefit abuse and waste, and any other collusive behaviour, have a negative impact on a medical schemes benefit pot.
This is the same benefit pot on which all scheme members rely should they require unexpected, costly, and life-saving medical treatment.
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