Fraud | GEMHEALTH Medical Aid Scheme

Fraud is defined as the unlawful and intentional making of a misrepresentation which causes actual or potential prejudice to another.” CR Snyman (1984)
HEALTHCARE FRAUD contains similar elements to fraud. Healthcare fraud is: “...the intentional misrepresentation of an important fact that is submitted in support of a healthcare claim for repayment by a medical scheme”. Rebecca Bush (2008)
WASTE is the overutilization of services and/or misuse of resources and/or that, directly or indirectly, result in unnecessary costs to the healthcare payers. It is not generally considered to be caused by criminally negligent actions; i.e. extravagant, careless or needless expenditure of healthcare benefits or services. Centers for Medicare and Medicaid Services (2016)
ABUSE is when services delivered are inconsistent with sound fiscal, business, or medical practices, or fails to meet professionally recognized standards that results in claims with no legal entitlement thereto. However, the individual or entity’s lacks intention to misrepresent the facts to obtain payment. Examples are:
- Billing for unnecessary medical services
- Charging excessively for services or supplies
- Misusing codes on a claim, such as up-coding or unbundling of codes Centers for Medicare and Medicaid Services (2016)

Medical aid card fraudulently used, e.g. member is lending out his medical aid card to family members or friends
Enrolling ineligible people for coverage
Non-disclosure of prior ailments on an application form.
Non-disclosure Dual membership of another medical aid (you allowed to have insurance cover and a medical aid cover and claim from both, but not allowed to belong to 2 registered medical aids and or PSEMAS scheme.

crime syndicates to enrol “ghost members” that enable syndicates to visit service providers as members.
Dispensing sunglasses , but claim for lenses or contact lenses
Abuse of benefits: Service provider claiming for medicine dispensed under codes of consultation visits
loans. i.e. Healthcare providers handing out cash to members for submitting a claim to the medical aid
Dispensing illegal merchandise to patients; i.e. Pharmacies dispensing groceries to members and claiming for medication.
Illegal treatments of non-beneficiaries: service provider render services to friends/family members

A Medical Aid Scheme is a mutual or solidarity Scheme whereby all members share in the risk and cost through cross-subsidisation within the pool of members, as depicted
Members and the companies pool their contributions into the Scheme. The Scheme uses all contributions to finance the health needs of all its members and pay for non-healthcare services.
When you are healthy or not claiming your contributions pays for others healthcare bills, and vice versa when you are sick the other members pay for yours. In the in-hospital risks pool claims are spread across younger members, new-borns and older members.
On average, the total value of your benefits is approximately 4 times more than your contribution and that risks are share amongst all members and reduce your potential liability to pay for any medical expenses.
- If the fraudulent claims are submitted to the scheme, higher claims will be paid and the following measures will be implemented to curb the high expenses:
- Scheme have to fund the excess claims from the reserves
- Scheme have to introduce high co-payments on certain benefit disciplines
- Scheme have to review and cut or reduce benefits
- Scheme have to implement high premium increases to cover for the high claims

Fraud, Waste & Abuse in Healthcare