Industry tipoff line 0800633633

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THE BHF FORENSIC MANAGEMENT UNIT
HEIDI KRUGER BHF Head of Corporate
Communications and PCNS
Industry tip-off line 0800633633
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THE EXTENT OF THE PROBLEM

• Difficult to quantify
• It is estimated that as much as 10 of claims
  paid are either fraudulent or abusive in some
  way
• Depends on the size of the scheme, the nature
  of the reimbursement models and benefit design
• Quality of care decreases because of perverse
  incentives, e.g. kickbacks
• Threat to the long term sustainability of the
  private health care sector

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WHY DOES IT HAPPEN?

• Lack of understanding
• Third party payment system
• Fee for service
• Incentives are not aligned
• Weak / overloaded legal system
• Grey areas between fraud and abuse
• Conflict between over-servicing and quality
  care
• Beware the moral hazard The insured spend
  60 more than the uninsured

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TYPES OF FRAUD

• Claiming for services not rendered
• Merchandising
• ATM scams
• Claiming for non-covered benefits
• Claims for non-members
• Code gaming (up-coding / unbundling)
• Material non-disclosures (members)
• Dual Memberships
• Fraudulent motivations
• Etc.

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A COLLECTIVE APPROACH

• The Forensic Management Unit
• Fraud cannot be seen as a competitive advantage
• Prevention is better than investigation
• Patterns of behaviour need to be changed
• Across the board participation
• Full support
• Adhere to a strict legal framework

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A COLLECTIVE APPROACH

• Focus for the Unit
• Cannot build a fraud strategy on recouping -
  no-win situation
• Sharing of information
• Collective action
• No duplication of effort
• Publicity
• Strong focus on rehabilitation
• Due Process

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TOOLS FOR INVESTIGATION

• Databases
• Providers
• Members
• Employees
• PCNS
• Duplicate practice numbers
• False information
• Sharing of information
• No duplication of efforts
• E- mail distribution
• Industry tip-off line

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LISTINGS SERVICE PROVIDERS

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TOTAL LISTINGS - 4361
LISTINGS

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MEMBER DATABASE

• All medical scheme members and their dependents
• Will provide information on the history of all
  members and their dependents at a glance
• Will obviate the need for membership
  certificates
• Will provide significant benefits for new
  business
• Will identify dual memberships
• Information will be accessed through the
  members ID number and only information that
  specific member and their dependents will be
  displayed

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CROSS MAPPING
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DATA WAREHOUSE

• JOINT ANALYSIS
• Provider profiling database
• All claims information across the industry will
  be recorded
• Cost per patient/cost per encounter
• Industry norms established, e.g. hospital
  theatre benchmarked no. of patients seen per
  day
• Excessive claimers identified and analysed
• Pharmacies establish whether medicines
  dispensed corresponds with medicines purchased
• Will pave the way for benchmarking

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PROFILING

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IN PROGRESS

• To lobby government to get specific healthcare
  fraud legislation, prosecutors and courts
• To set up a specific FMU tribunal using an
  independent legal expert
• To embark on industry investigations
• Develop collective protocols for consequences
• To set up a knowledge database which will list
  expertise in a particular area relating to
  healthcare fraud
• Support initiatives which push for appropriate
  billing for and distribution of health
  technology
• Standardised investigation tool
• - Consistency in investigations
• - Ensures proper evidence gathering
• - Promotes timeous resolution of cases
• Text book for investigators and forensic
  departments

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LEGISLATION

• Medical Schemes Act (South Africa)
• Section 28.2 Members may be suspended for
  failure to pay, failure to repay debt,
  submission or fraudulent claims, committing
  fraud, withholding material information
• Section 59.2 Payment either to service
  providers or members
• Section 59.3 Recovery of funds. Medical
  scheme does not necessarily have to have a
  criminal case and a guilty verdict against
  provider. This section refers to payment and
  /reversal of funds
• Section 66 Deals with offences and quotes
  penalties
• (It is more difficult to prove fraud than it
  is to prove a contravention of the Medical
  Schemes Act, so it is advisable to use both when
  fraud has been committed)

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INVESTIGATIVE GUIDELINES

• Grounds for investigation
• Clear reasons, e.g. tip off, anomalous profile,
  evidence of fraud
• Facts must be gathered
• Reasons documented
• Investigation
• Short a period as possible not fair to suspend
  payment to a practice and then let
  investigation drag on for a long time without
  an end point in sight
• Inform subject
• During evidence gathering stage care should be
  taken to not defame practice under investigation

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INVESTIGATIVE GUIDELINES, cntd.

• Investigation
• Random members/patients only broached as a last
  resort and not a first step
• Members should be approached in a professional
  manner, but questions of a clinical nature
  should not be asked of members
• Ensure that there are no language barriers
• Probes should be conducted according to
  Constitution
• A minimum of two affidavits should be gathered
  to avoid possibility of an isolated incident,
  administrative error or malicious allegations
• Where possible, other schemes should be included
  in investigations in order to increase evidence

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INVESTIGATIVE GUIDELINES, cntd.

• Steps following investigation
• Decision as to the route to be taken, e.g.
  either administrative,
• professional, criminal or civil
• - Administrative where a settlement is
  reached between parties concerned
• - Professional where the matter is reported
  to relevant professional body
• - Criminal where a case is opened with the
  SAPS and the NPA decides whether to prosecute
  or not
• - Civil a civil case would be opened mainly
  to recover losses
• All settlements and cases are reported to the
  FMU and loaded onto the ITC database

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INVESTIGATIVE GUIDELINES, cntd.

• In the interest of fairness as possible, the
  alleged perpetrator is afforded to opportunity
  to answer allegations investigated. This is
  done through a mediation process for which there
  are guidelines
• Some cases are not appropriate to report to the
  SAPS or professional body as these systems are
  overloaded and short of resources. It is often
  more appropriate to deal with these cases on an
  administrative level and this ties in with the
  FMUs philosophy of rehabilitation wherever
  possible

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INVESTIGATIVE GUIDELINES, cntd.

• Settlements
• Settlements should only be reached through the
  agreed to mediation process in order to ensure
  that the process is fair and that the settlement
  is appropriate and in line with the objectives
  of the FMU
• As a general rule, a settlement should not only
  consist of paying back a scheme or schemes but
  should also consist of some other punishment
  in order to facilitate a change of behaviour
• Where a provider has agreed to pay back an
  amount to a scheme, this should be reported to
  the other FMU members. (This is so that the
  provider does not inappropriately increase
  volumes to other schemes in order to repay
  debt). If this is not done, it may be
  considered as an undesirable business practice
  as the settlement could have been reached to the
  disadvantage of other schemes

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REHABILITATION
Nature of fraud must be taken into account -
Repayment of monies - Reporting crime - Taken
off direct payment - Payment stopped
altogether - Information distributed to
industry - Punishment should be for a set
length of time agreed to by industry and
communicated with perpetrator, depending on
nature of crime and specific scheme rules. -
Other conditions could be imposed, for instance,
if the crime involved performing unnecessary
scans, then the provider could be forced to
obtain authorisation from each scheme each time
he/she performed a scan.
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SUCCESS

• One medium sized scheme (75000 members)
  increased its AODs by 700 in two years.
• In November 2004 840 cases were being
  investigated and in March 2007 this had risen to
  3564
• In November 2004, 67 cases had been finalised
  and by July 2006 this had risen to 643

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WIN-WIN SOLUTIONS

• Aligning Incentives
• Specific demographics taken into account
• Providers rated according to claims profile,
  e.g. A-D
• Downstream costs taken into account
• Payment according to rating, e.g.
• Category A Scheme will refund at
  negotiated/NRPL R20
• Category B Scheme will refund at
  negotiated/NRPL rate
• Category C Scheme will reimburse member
  directly
• Category D Scheme will not reimburse
• Peer review
• Ensure good relationships between
  scheme/provider

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THE BHF TRUSTEE TRAINING PROGRAMME
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TRUSTEE TRAINING

• Adapted for specific schemes, e.g. open,
  restricted, elementary level, advanced level
• Programme includes
• Overview of legislative environment and the
  influence of legislation on the market
• Fiduciary and legal responsibilities of
  trustees Investing medical scheme funds
• Accounting guidelines
• Benefit design
• DSP arrangements
• PMBs
• ICD10, etc.
• Trustees receive a resource manual, compiled by
  BHF

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PRACTICE CODE NUMBERING SYSTEM (PCNS)
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PCNS

• Approximately 44 000 South African healthcare
  providers and facilities. 1000 Namibian
  providers. 19 Lesotho providers (ongoing)
• PCNS number used for billing and reimbursement by
  healthcare providers, medical schemes,
  administrators, managed care organisations, etc.
• Live links with statutory bodies
• Practice code numbers allotted under strict
  criteria to healthcare practitioners who are
  registered or licensed for independent/private
  practice by an appropriate statutory organisation
  or licensing authority. Strict verification
  criteria.

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PCNS

• Comprehensive manual including a chapter on
  Namibian registration requirements and Lesotho
  requirements
• Definition of each discipline
• Scope of practice (SA, Namibia and Lesotho)
• Acts and Regulations relating to disciplines
• Web search facility
• Access details of individual providers without
  having to access full database
• Indicates whether provider is listed in both SA
  and Namibia/Lesotho
• Indicates whether provider is linked to
  partnership

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PCNS

• ICD 10
• Compulsory in SA.
• BHF ICD 10 cd rom contains master table,
  browser and CMS circulars relating to ICD 10
  legislation.
• SADC providers servicing SA medical scheme
  members will not be reimbursed without ICD 10
  codes.

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PCNS

• Development of new PCNS database to be a tool to
  be used in the broader policy objectives
• Certificate of Need (CON).
• Criteria/approvals for e.g. radiographers,
  ambulances, hospitals.
• List technology and equipment in
  hospitals/facilities.
• Professional development, additional
  qualifications.
• Allied health disciplines.
• Will link providers to networks hospitals to
  groups.
• Geo mapping capabilities distribution of
  facilities/services.
• Will contain state employees and thus identify
  those providers working in both public and
  private sectors.

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• THANK YOU