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ERADICATING FRAUD WASTE AND ABUSE IN THE SYSTEM
HFMU
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Definition of Fraud (Common Law) ‘Fraud consists in unlawfully making, with intent to defraud, a misrepresentation which causes actual prejudice or which is potentially prejudicial to another.’
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Healthcare Fraud
“Healthcare fraud involves a deception or misrepresentation that an individual or entity makes, knowing that the misrepresentation could result in some unauthorised benefit to the individual or entity or some other party. The most common fraud involves a false statement or a misrepresentation or deliberate omission which is critical to the determination of benefits”
Association of Certified Fraud Examiners – 2009 Fraud Examiners Manual
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Healthcare Waste & Abuse
Abuse
Waste Use or expend carelessly, extravagantly, or to no purpose
• The use of something in a way that is wrong or harmful• Improper or excessive use of something• To change the inherent function of something • Use to bad effect
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THE NATURE OF HEALTHCARE FRAUD
Two important factors
There is a vast honesty majority Service ProvidersBUTThere are outliers that do significant damage
The greatest fraud ‘cost’ comes from High volume / Low value fraudNOTLow Volume / High value fraud
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THE NATURE OF HEALTHCARE FRAUD
• It is reported from some quarters that fraud could be as much as 10% of the cost of all claims. If one considers that about R 130 billion per year is spent on private Healthcare in South Africa then fraud could amount to R 13 billion per year
• Private Healthcare Fraud in South Africa could be expected to be at least 7%, probably more than 10 % and possibly as much as 15%
• What is the cost ?
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2007 2008 2009
Number of Fraud matters
3694
3439
4067
Value of Fraud matters
R 69 747 316
R 73 681 004
R 77 773 591
KPMG – Medical Schemes Anti-Fraud Survey
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The resilience to Fraud of medical schemes in South Africa
August 2013
Jim GeeDirector of Counter Fraud Services, BDO LLPVisiting Professor and Chair of the Centre for Counter Fraud Studies at University of Portsmouth, UK
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BEST AND WORSTMedical schemes performed best in the following areas:
• 100% of medical schemes have arrangements in place to ensure that suspected cases of fraud, waste and abuse are reported promptly to the appropriate person for further investigation
• 94.1% ensure that reports about work to counter fraud, waste and abuse are discussed at Board level
• 94.1% have a formal or informal policy setting out how they try to detect possible fraud, waste and abuse
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BEST AND WORSTMedical schemes performed worst in the following areas:
• Only 29.4% of medical schemes use estimates of losses to make informed judgements about levels of budgetary investment in their work countering fraud, waste and abuse
• Only 29.4% ensure that those working to counter fraud, waste and abuse have received specialist professional training and accreditation for their role
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BEST AND WORSTMedical schemes performed worst in the following areas:
• Only 47.1% have arrangements in place to evaluate the extent to which a real anti-fraud, waste and abuse culture exists or is developing throughout their organisation
• Only just over half (52.9%) regularly review the effectiveness of their counter fraud work against agreed performance indicators
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Call for industry collaboration
• HFMU participation
• Industry Standards & Guidelines – It outlines the basis of cooperation and collaboration
• To ensure that the relationship is effective and that together we meet our aims and objectives
• It sets out principles underpinning the interaction and provides guidance on the exchange of information
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HFMU BENEFITS
• The unit continues to build relationships with the Law Enforcement Agencies (NPA / SAPS) to ensure more efficient prosecutions and to provide them with a better understanding of the medical scheme industry
• Co-ordination and facilitation of industry investigations to improve the success rate of criminal matters
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HFMU BENEFITS
• To share modus operandi of alleged perpetrators of fraud
• Holistic view to establish the real cost of Healthcare Fraud
• Fraud Prevention by means of information sharing• Facilitation of training and workshops • International exposure, collaboration, access to skills
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HFMU OBJECTIVES
To eradicate the risks associated with fraud, waste and abuse in the healthcare industry through information sharing.
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CASE STUDIES DONE BY HFMU
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ALL DIFFERENT SHADES OF HEALTHCARE FRAUD
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DENTAL FRAUD
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Dental Fraud • Over the years, the HFMU members have repeatedly investigated
practitioners registered in the Dental Therapy profession • The unit then decided to collate all the claims data relating to Dental
Therapy over a set period of time in order to obtain an industry view of claiming patterns of the Dental Therapists
• Once the data had been consolidated and analysed, the HFMU members decided to focus an investigation into the activities of the highest claiming Dental Therapists
• Investigators and a Clinician were dispatched into the field to speak with patients of these Dental Therapists.
• The mouths of patients were examined and charted by the Clinician and comparisons were done between the chartings and the claims submitted to the various medical schemes for payment
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Examples of Dental Fraud• Billing for service not provided• Reporting a higher level of dental service than was actually
performed – “often called up coding”• Submitting a dental claim under one’s patient’s name when services
were actually provided to another person• Altering claim forms and dental records• Billing for non-covered services as if they were covered services• Changing the date of service on a claim form so it falls within the
patient’s benefit period• Routine waiver of a patient’s co-payment or deductible, if applicable• Performing services that are not suitable or necessary
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EQUIPMENT FOUND IN DENTAL THERAPY PRACTICES
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EQUIPMENT FOUND IN DENTAL THERAPY PRACTICES
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Claimed for 8354 on tooth 42 Post-operative pan shows gold
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PROVIDERS PRACTICING BEYOND THEIR SCOPE
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EXAMPLES OF AGGRESSIVE BILLING
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EXAMPLES OF PROVIDERS TREATING PATIENTS IN/WITH SUB-STANDARD AMENITIES: [Members were treated at a Wellness day in an office of the company]
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Case Study: Pharmacists, General Practitioners & members collusion
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Wife
Pharmacists 4
Brother
New Partner
New Partner
Pharmacists 3
Pharmacists 2
Pharmacists 1
Project Funda
GP 1
GP 2
GP 3
GP 4
GP 1, 2, 3
GP 1 ,2
GP 5 GP 6
GP 7 GP 8
GP 9
GP 8
GP 9
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Case Study: General Practitioners, Clinic, other disciplines & member collusion
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Social Worker
Physiotherapist
Psychologist
Dietician
Psychiatrist
Pathology Lab
Rehab Clinic
GP 1
GP 2
New Practice GP 1 / New Partner
Ambulance Services
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CASE STUDY: Clinical Psychologist
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Tariff code summary
86210 86203 86202 86204 86209 86206 86205 86207 86208 862110
200
400
600
800
1000
1200
1400
1600
1800
Tariff code
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Date Hours per day Amount claimed2009/12/17 25.3 R 14,698.102009/11/15 25.5 R 14,748.602009/10/25 26.0 R 15,051.802010/04/21 26.0 R 15,102.102010/01/10 27.7 R 16,011.502010/05/09 28.0 R 16,263.802009/10/23 29.0 R 16,818.802010/02/26 29.2 R 12,273.602010/06/12 29.3 R 17,021.502010/05/14 30.0 R 17,425.502009/11/21 30.2 R 17,476.102010/04/07 30.2 R 17,374.702009/10/05 30.7 R 17,728.702009/10/09 31.7 R 18,284.302009/11/14 31.7 R 18,334.002009/10/10 32.7 R 18,840.002010/04/10 33.3 R 19,344.902010/03/03 34.5 R 15,354.702009/10/24 34.7 R 20,102.602009/11/03 34.8 R 20,102.802010/04/19 36.0 R 20,910.602010/04/23 36.0 R 20,910.602009/11/19 36.5 R 21,162.502010/05/21 37.3 R 21,668.302009/10/16 37.8 R 21,870.502009/10/29 37.8 R 21,870.502009/12/18 39.0 R 22,628.002009/10/31 39.5 R 22,880.102009/10/14 40.0 R 22,880.702009/11/02 40.8 R 23,587.802009/10/30 43.3 R 22,678.602009/10/15 43.8 R 23,638.302009/10/19 44.7 R 23,587.702009/11/12 47.7 R 27,628.507 May 2009 49.5 R 28,588.202009/10/22 54.7 R 29,345.902009/10/20 57.3 R 33,285.30
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What are we doing about healthcare fraud?• Collaboration and Information sharing
• HFMU Member education
• HFMU Industry Standards Structured approach for consistent application of
fraud risk management principles. The Standards also ensure that the industry adheres
to the relevant legislation
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THANK YOU