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Health Funders Association seeks clarity from panel after medical schemes’ racial profiling findings

By Zelda Venter Time of article published Jan 20, 2021

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Pretoria – The Health Funders Association (HFA) – a representative body for medical schemes – welcomed the interim findings by the Section 59 Investigation panel that there is no evidence of explicit or intentional racial bias in the algorithms and methods that medical schemes use to identify fraud, waste and abuse (FWA).

The preliminary report issued on Tuesday, despite futile attempts by the Government Employee Pension Funds (Gems) to block it being made public, found that some medical schemes racially profiled doctors.

The panel serving on the Council for Medical Schemes, which investigated claims that black medical practitioners were discriminated against by some medical schemes, said while they found that there were racial discrimination, they could not find that it was intentional.

The panel has also expressly recognised that FWA is serious and damaging and requires mechanisms to combat it. The panel confirmed that the mechanisms currently utilised by medical schemes, including clawbacks of amounts paid to providers and the placing of providers on an indirect payment system (where the member is paid directly by the medical scheme), are permissible in terms of the Medical Schemes Act, provided that the medical scheme acts reasonably and procedurally fairly.

The HFA, meanwhile, said in response it was concerned the panel had found there was indirect discrimination in the outcomes of the FWA processes, despite there being no explicit or intentional bias.

The organisation said it would be seeking clarity from the panel on their reasons for discounting the presence of confounding factors – additional variables in cause-and-effect relationships – which may account for the outcomes.

The HFA said an example of a confounding variable is where a higher incidence of smoking in males results in a higher incidence of lung cancer in males, rather than the cause being gender. In submissions to the panel, it was demonstrated that confounding factors may reduce the race differential almost completely.

“Medical schemes serve more than 8.8 million South Africans and we believe that a cohesive and well-functioning private health sector is critical to providing access to quality healthcare to these individuals and families.

“We therefore welcome the panel’s intention for further constructive engagement on the findings and recommendations of the report in the interest of a unified industry.”

The HFA added that this is particularly crucial in light of the need to support our healthcare providers as they tirelessly serve the population in the battle against the Covid-19 pandemic.

“It is the duty of all medical schemes, as recognised by the panel, to ensure that proper control systems are in place to ensure that member funds are utilised in the provision of healthcare for its members and to protect member funds from FWA.”

The organisation further said it is important to note that FWA has a significant impact on the affordability of healthcare in the private sector.

“It must be emphasised that any funds wasted through fraud, waste or abuse are funds belonging to the members of medical schemes. Any fraud, waste or abuse of these funds therefore negatively impacts access to healthcare in a country where health resources are scarce.“

The association said it and its members are committed to acting in a lawful, fair, impartial and transparent manner at all times. To this end, a code of good practice pertaining to the principles relating to prevention and investigation of FWA was established.

The HFA said it will, meanwhile, study the interim report, including the recommendations made by the panel and provide detailed input to the panel on their findings and recommendations.

The panel made it clear in their preliminary findings that they do not have the power to find anyone guilty. Nor were they appointed to investigate the veracity of each individual claim of unfair treatment and unfair discrimination.

But they added in conclusion to their report that they would be failing in their duty if they ignored “degrading, humiliating and distressing impact of racism against the individuals who testified before them”.

They said a part of their function was to provide a platform for the expression of individual experiences of racial discrimination and other forms of unfair treatment.

The panel said their expectation is a constructive engagement with the findings and recommendations in this report.

“Rather than conclusive, our findings will hopefully provide a basis for the necessary reconstructive work which must be undertaken by the role-players in the medical schemes industry.,” the panel said.

Pretoria News

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