Patients exploit hospital cash plans

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Durban - A 12-year-old was admitted to hospital for six days as he was coughing up blood. Yet on the day the ailing youngster was admitted, he ate a pie and a toasted sandwich and drank a Coke.

Throughout his stay he was only seen by a psychiatrist, and was eventually discharged with no further treatment.

This was just one example of medical aid fraud pertaining to hospital cash plan (HCP) policies, the Board of Healthcare Funders conference heard at Durban’s ICC on Tuesday.

Although it was happening countrywide, the majority of cases were from KwaZulu-Natal.

At sessions hosted by the board’s forensic management unit, it emerged that the policies were creating severe problems for medical aids, which were paying claims for patients with random ailments such as toe infections or coughs.

Brad Frank, a policy adviser at the Association for Savings and Investments South Africa (Asisa), said HCP policies were creating “huge problems” for medical aids.

Patients just had to provide a medical script or report to say they had been in hospital in order to be paid out up to R5 000 a day.

The plans were so easy to defraud that people were spending days in hospitals with diagnoses such as “a severe toe ache”.

“About 1 million to 1.5 million people in South Africa have hospital cash plans, and although this number could be viewed as ‘small’, if you look at the rate at which this number is growing, it is concerning,” Frank said.

“The plans are easy to attain and to defraud. But they are so important and necessary to our South African demographics that to cancel the product is not the solution. It would be a huge travesty to remove it.”

In 2011, 549 cases of fraud relating to the plans, costing medical aids R4m, were recorded.

But fraud rates were increasing rapidly.

Marius Brink, the head of forensic services at Discovery Health, said patients with HCPs were being admitted to hospital five times more than patients without the plans, and were staying in hospital 40 percent to 60 percent longer.

Medical aids were losing 10 times more than the insurance companies offering the plans.

While figures were impossible to calculate, he said that one day in hospital could cost a medical aid R10 000.

“These products incentivise people to go to hospital, whereas medical aids encourage them to be healthy.”

Examples of fraudulent claims picked up by Discovery were:

* A 43-year-old admitted for three days for pain in his left hand. Overall, he was admitted to hospital 17 times in two years.

* A 46-year-old admitted for four days for a urinary tract infection. She was admitted to hospital 18 times over a two-year period. Family members were admitted 30 times in two years.

Brink said there were hundreds of such examples.

A legitimate Discovery patient also reported that on admission to hospital, no beds were available. On eventual admission, other patients in the ward were discussing cashing in on their HCPs.

Although he concurred that the majority of such fraud was happening in KZN hospitals, Brink did not know why this was the case.

“But we cannot say the hospital is involved. Perhaps the fraud is being perpetrated by doctors who use those hospitals. Or perhaps the hospitals are aware of it, but are turning a blind eye because it is bringing in money,” he said.

“The only way to solve the problem is by engaging the hospitals.”

Peter Kerford, the head of investigations at financial services group MMI Holdings, said that medical aids were billed for hospital stays and care only after the patients had been discharged.

“We then have to look at reports. We can’t go and ask doctors why they admitted the patients when we do not believe it is necessary. We are not mandated to question them. So we look at trends, and that is where we see patterns that become prevalent,” said Kerford.

The Mercury


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