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First, do no harm: Medics accuse schemes of riding roughshod over patients’ rights

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Physiotherapists are speaking out about what they describe as medical schemes’ bullying tactics of forcing them to admit to ‘crimes’ of using incorrect codes, signing admissions of guilt and paying unproven debt.

Blocked since 2019 by Discovery Health for charging her patients emergency and after-hours rates, a physiotherapist who works in intensive care units and taught ethics at university has castigated the medical scheme for its “unscrupulous” clawback process, which resulted in her being blacklisted from all the schemes it administers. 

And because she dug her heels in and refused to divulge confidential patient records, the scheme stopped processing all new payments – as it does with others that defy its audits – forcing her to become a cash practice.

Hester Huysamen, one of the top physios in the country, has stood her ground, asserting that a healthcare practitioner’s first obligation is to their patients. 

So far, she is the only practitioner prepared to go on the record about her treatment by the medical scheme, but dozens of others have spoken off the record to Business Maverick. Fearing a backlash, they have described their shame and distress after being bullied into signing admissions of guilt and entering into payment arrangements to prevent “clawbacks”, which entail withholding payment to providers for services rendered to members in terms of Section 59 of the Medical Schemes Act (MSA).

These claims were authorised and paid, but years later, the medical scheme – via either an algorithm or a “tip-off” – claws back funds. 

Practitioners allege the scheme threatens them with disbarment and/or criminal prosecution, and that they are coerced into signing acknowledgments of debt for which no evidence is presented, and forced to hand over their clinical notes, which violates patient confidentiality

The forensic management unit of the Board of Healthcare Funders, which represents 95% of medical schemes in South Africa, Namibia, Zimbabwe and Botswana, has previously told members, “It is not acceptable to suspend payment to a practice as a result of an investigation and then let it drag on for months without informing the practice as to what the investigation is about.” 

If furthermore says that, “if at all possible, questions of a clinical nature should not be posed to members who might not be in a position to answer them. Investigators should never question a service provider’s clinical judgement”.

Discovery Health has admitted to the clawbacks, insisting it is legally entitled to do so to protect the scheme’s income and to combat fraud.  

Discovery said in a statement earlier this week that medical schemes have a duty to protect their members’ funds and have the right under the Medical Schemes Act to recover or claw back monies already paid to medical providers where they have “positively identified that irregular billing has occurred”. 

Discovery Health added that the forensic processes it follows to probe suspected irregular claims were critical for the sustainability and affordability of medical aid. The survival of the schemes it administers could be threatened in the long run if it doesn’t recover funds from erroneously billed claims.

The company estimated that the industry would lose at least R1.7-billion of members’ medical aid money to fraudulent claims per year if it does not curb billing abuse.

The MSA does afford an administrator discretionary powers to recoup funds from practitioners, but they must pay within 30 days. Regulation 6 of the Act provides that if a scheme deems a claim to be erroneous or unacceptable for payment, it must notify the practitioner within 30 days and state the reasons for its rejection. After that, the practitioner has 60 days within which to correct and resubmit the claim. If this process is not followed, the onus lies with the scheme to substantiate the accusation – “he who alleges, must prove”.

This is not happening and Discovery – as well as other schemes including Medscheme, the Government Employees’ Medical Scheme (GEMS) and Bonitas – have been accused of flouting the statutory timeframes set out in terms of the act by instituting clawbacks years after the fact.

Death knell

Once a medical scheme embarks on its forensic audit, it cuts off the health practitioner from the payment system, suffocating their ability to earn a living and even forcing some to close. 

A physiotherapist, who declined to be identified, explained how, after two medical schemes decided to query three-year-old claims, his practice was accused of illegal enrichment in excess of R300,000.

“They essentially decided to withhold payments until we proved beyond all reasonable doubt that we saw the patients. After reading your article, I now realise that we were in the wrong to send the auditors patient notes. The more we sent them, the more they moved the goalposts. 

“Instead of querying if the patients were seen, they then went through our notes with a fine-tooth comb and withheld payment based on certain aspects of documentation.”

Eventually, the audit, combined with the effects of the pandemic, sank the practice. 

“My former boss decided to shut up shop and my colleague then took over and started his own practice.” 

Breaching ‘Reg 6’

These actions are in breach of Reg 6(2) to (4), noted attorney Vince van der Walt in an article published in De Rebus in April 2020. 

“The purpose of these regulations is to obligate a medical scheme to take prompt action within the time periods stated in the regulations when it deems a claim to be ‘erroneous or unacceptable’ for payment. 

“Instead, many of the medical schemes embark on a large-scale retrospective audit, severely disrupting the practices of these health suppliers. 

“Moreover, in many instances the administrators are simply using the provisions of the Act to conduct a Kafkaesque cost-saving exercise without affording the health practitioner a fair opportunity to clarify any suspected irregularities.”

This is also not in line with the treating-customers-fairly (TCF) policy of the Financial Sector Conduct Authority, which had been expected to become the overarching conduct authority for all financial services schemes, including medical aids, on 1 April 2021.

All regulated entities are expected to demonstrate that they deliver on TCF outcomes to their customers throughout the product life cycle – from product design and promotion, through advice and servicing, to complaints and claims handling.

After a reported outcry from the Council for Medical Schemes, the Minister of Finance extended the date to 31 March 2024, while talks regarding the future regulation of medical schemes continued between the council, the FSCA, Prudential Authority, Treasury and Department of Health.

Regulation 59 Investigation

In January 2021, the CMS released its interim Regulation 59 Investigation report into the conduct of medical schemes – which includes clawbacks and allegations of racial profiling by healthcare providers who are members of the Solutionist Thinkers and the National Health Care Professionals Association. 

The panel found that on the whole, the audits – known as “fraud, waste and abuse investigations” – of Discovery, GEMS and Medscheme, unfairly discriminated against black practitioners and that there were financial incentives for the recovery of “as much money as possible”.

FWA recoveries boost a fund’s bottom line and there are financial incentives at play for the investigators: The panel noted, “Medscheme is entitled to 30% of all successful financial recoveries up to a cap of R25-million; and GEMS investigators were incentivised on the basis that the relevant investigator would be entitled to a commission of 10%.”

The Solutionists, who have over 230 members, wrote to the CMS earlier this month about their frustrations over its “persistent failure” to attend to pressing matters of healthcare practitioners, “especially after the release of the interim report that carried damning findings of discrimination, racial profiling by unfair algorithms”.

“You [CMS] have failed us dismally by not stating clearly the process of validating claims, leaving the gaps of financial exploitation of all sorts by the medical schemes,” the letter states. 

“The taxpayer’s money had been wasted into Section 59 investigation of our allegations and the finding were damning, but you still decided to be silent as if nothing happened precise many efforts we took to initiate reaching out to your office [sic].”

The final report is said to be due soon

Shifting goalposts

Huysamen explained that her practice received a letter from Discovery Health in January 2019, demanding her understanding of the use of the physiotherapy tariff list modifier 0006, which adds a 50% surcharge to services rendered over weekends or on holidays. Most of her patients are in hospital, requiring postoperative treatment after complex spinal surgeries. 

“These patients are in a critical care unit, admitted immediately post-op and could be ventilated. After complex spinal surgery and prolonged anaesthesia, there are possible risks to the patient.” 

Physiotherapy, which forms a part of a multidisciplinary team working under the instructions of the principal specialist, is critical to a patient’s recovery.

Discovery at no time indicated that the scheme rules have changed and that modifier 0006 is no longer paid. They omitted to introduce the scheme rule in their systems to reflect that the new rule is now applicable. 

Huysamen’s practice was blacklisted after she refused to sign an acknowledgement of debt or offer a settlement amount, forcing her to become a cash practice. She still bills for Saturdays, Sundays and public holidays.

Huysamen says that in becoming a cash practice, patients are at a disservice: “Discovery members have to pay up-front, out of pocket for services which they have cover and cannot afford. Their money is now used to offset the so-called debt. The members in question with the clawbacks are completely unaware that these activities are taking place on their behalf.”

The coding policy was changed in 2015 and Discovery informed physios they were no longer to use the 0006 code as it is for emergency use only. The SA Physio Society gave physios a new code which Discovery is not accepting either. A physio explained: “It was rejected on my accounts when I treated a Sunday patient so I had to reverse the claim and charge the 0006 code as I do not work weekends and then my account was flagged because of a one-time use of 0006 and I was audited.

Many physios are now forced to charge Monday to Friday rates to avoid being audited due to their use of the 0006 code.

Peer review not accepted

Another physio, who is part of the concerned practitioners who have now joined the Solutionist Thinkers in their group action against clawbacks, says that when she had her practice accredited and had a peer review conducted, she was informed the scheme would never request her patient notes. But during her audit, Discovery rejected her peer review through the South African Society of Physiotherapy, and insisted she was liable for over R200,000 over three years.

“They still want my hard copy of notes. If I send my notes through, then their auditors – who are not medical practitioners – will see that this patient was raped, that one had a meltdown because they lost their finances or child… It becomes public knowledge; it’s a breach of confidentiality.” 

She says she was given a list of 10 patients over four years and asked why she used particular codes and why she did complex evaluations on patients. 

“The emails are extremely derogatory – there is no respect for the medical professionals. It is appalling what they did to me… the stress.

“I don’t have the money to fight Discovery. I see four patients a day. If I roll over and pay the agreement that I have been fraudulent, they are going to do it again, like they did with others.” BM/DM

  • Story corrected to clarify the jurisdiction of the Financial Sector Conduct Authority in relation to the Council of Medical Schemes. Apologies for the error.
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All Comments 9

  • I am vehemently opposed to a national health care program based on the scope of corruption in SA but when you read this you almost can see the justification!

  • I myself do not support such authoritarian practices and I do believe that the complaints leveled at Medical schemes are wholly justified. I also do however have to acknowledge the fact that there are practitioners that submit fraudulent claims. I myself were stuck in ICU for a week and upon my release saw that a Physio has claimed to have provided physio services every day even tough I for a fact know that this person did not and promptly reported this to my scheme. It seems that it is standard practice to come by your bed and peel off one of the admittance / authorization stickers from your file and attach this to their claim…

  • No doubt there is abuse on both sides, and mistakes as well. Much of this is embedded in the structure of private health care where hospitals and health professionals charge a fee for every service provided. This inevitably leads to the provision of excessive services, highly complex billing systems and audits (which may turn abusive) by the insurers. There are models of value based care which focus on team work (not individualistic specialists) a fixed price for a bundle of care (not each procedure) and which use scare specialist resources only for care that requires their level of training. This basic flaw needs tackling, whether by NHI or other mechanisms. It will require a great effort to convince all parties that this is a better otpion.

  • This is all true and in particular from the perspective of members.
    If you put out a letter asking readers to give examples of how they have been bullied into using generic drugs because one of the medical schemes has signed a big supply/discount deal with that particular manufacturer or supplier I bet you would be inundated with stories. In some instances this is a dangerous practise as not all generic drugs work the same as the original drug and the side effects can be devastating. But still they do it and its like this big black hole of bureaucracy – who do you talk too? Well, who knows?
    Med Schemes in this country hold a lot of power and they know it.

  • There is no doubt that Discovery are looking for loopholes. I have just received the following notice
    “We have not paid this claim as the Board of Healthcare Funders has discontinued this practice number. Please discuss with your health partner.”
    I have been dealing with this same practice and medic for many years. When I queried with the practice they almost shook their heads in frustration as it is an issue which they cannot get resolved. Discovery just say “There has to be an audit” but nothing happens.

  • I have nothing against audits, checks and balances, but the crux is failing to notify the practice withing 30 days as per Regulation 6. It is not fair on any business to come back with 3 years worth of objections just because it is more “convenient”. In essence, the Medical aid has no clawback claim after the 30 day period, so now they resort to bullying tactics. The most shocking part is that only about 30% of what you pay to the medical aid as a customer/client actually get’s paid to the practice. The rest is used up in “administration” which buys fancy property and pays shareholders BIG profits, instead of being used to provide better, cheaper services. The medical aid industry, as with the automitive industry (running anywhere from 300 – 1000% markup) are both ripoffs. It is time we bite the bullet and start objecting to this systematic bloodletting of our economy.

  • I have had to use hearing aids for over 15 years. The last set was 6 years ago and on a 3 year cycle I can hardly be accused of abusing the system by getting a new and very much upgraded pair (within the scheme limits) at the end of April. My claim (not an inconsiderable amount) has been rejected now 4 times. The last time no reason was given but prior rejections were due to ‘incorrect member number’ (I’ve only used it for 25 years), ‘no date of service’ (can’t you read?) and other pathetic reasons. The practitioner was required to fill in a form – one question requiring a yes/no answer. The practitioner replied ‘no’ only to be told ‘you cannot say no’….. huh? So much for CAMAF!

  • When you are in hospital, you must be careful who you make eye contact with, lest you receive a bill. Despite their exhortations to report fraud, the schemes don’t require patients to sign off on hospital bills, leaving them open to significant padding. It’s easier to go after the smaller practices.

  • I have long had problems with our current system which just seems to be the worst of capitalism at play. It all seems to have happened when the old fashioned Medical Aid became a profit driven organisation (when Medicals stopped aiding and started scheming). In my early working career I belonged to a small medical aid solely for City of Johannesburg employees, which was run on a non-profit basis and overseen by trustees elected by the employees. There was fraud (I remember one of the Trustees sharing with us the story of boxes of bandages being charged for a circumcision!) but because the scheme was small it was relatively easy to catch it. Now we have these profit-driven behemoths squeezing the medical profession, who understandably push back, and we the patients are caught in between. I would so love an NHI if I could only be sure it would be run properly!

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