Syndicates defrauding hospital plans, says Broomberg

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Data presented by Discovery Health yesterday showed that in specific hospitals people with hospital plans have been admitted five times more often than members without one.

They also stayed longer to cash in on the money they are paid from these policies.

Discovery Health, which administers the country’s largest open medical scheme, said it had uncovered syndicates that prey on cash-strapped medical scheme members, helping them to undergo illegitimate hospital admissions.

The chief executive, Jonathan Broomberg, said it had terminated memberships of some clients and doctors who were found participating in this fraud were reported to the Health Professions Council.

He said most of the activity was detected in KwaZulu-Natal. “You get a syndicate that finds a doctor and a hospital clerk who are willing to work with them. They then identify scheme members who need cash, and arrange for them to be admitted in return for a share of the cash plan payout.”

Broomberg said that the proceeds seemed to be split between the doctor, the syndicate and the hospital clerk. The doctors submitted claims to medical schemes for consulting with a patient who was never ill.

One case involved a 46-year-old man who was admitted 18 times over two years and stayed for an average four days each time. He was only on pain and antibiotic medication. His family members had had more than 30 admissions over a two-year period.

Discovery Health data showed that the average length of stay for members with cash plans exceeded its scheme’s admissions for other members by between 40 percent and 60 percent.

The company raised its concern when it submitted its comments on the National Treasury’s demarcation rules.

In March, the Treasury published draft regulations indicating that the hospital cash plans and gap-cover products had a role to play in the sector.

Broomberg said Discovery Health accepted this view. He also indicated that Discovery did not expect the government to deal with hospital cash plan fraud, saying that the providers of these products and the private sector as a whole should take a stand against it.

“This fraud is committed by a few bad eggs. These may be good products whose reputation is being tainted by a small number of corrupt individuals,” he said. – Londiwe Buthelezi

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