Medical scheme forensic audits – what you need to know
Wendy Massangaie, legal advisor, SAMA Legal Department
In recent years, many medical practitioners have been bombarded with forensic audits carried out on their practices, with direct payments suspended and the medical schemes “clawing back” unproven amounts, under the guise of section 59(3) of the Medical Schemes Act No. 131 of 1998. The outcry from our SAMA members has not fallen on deaf ears.
The usual process is for medical scheme administrators to contact the medical practitioner, after conducting a desk audit, with their suspicions regarding misconduct, fraud, billing errors, corruption and practice structure, among other potential problems. This is then followed by a request for the submission of patient files for verification purposes.
Section 59(3) of the Act provides as follows:
“59. Charges by suppliers of service
(3) Notwithstanding anything to the contrary contained in any other law, a medical scheme may, in the case of –
(a) any amount that has been paid bona fide in accordance with the provisions of this Act to which a member or a supplier of health service is not entitled; or
(b) any loss that has been sustained by the medical scheme through theft, fraud, negligence or any misconduct that comes to the notice of the medical scheme, deduct such amount from any benefit payable to such a member or supplier of health service” (emphasis added).
One must bear in mind that the Act requires that medical schemes effect payments of all genuine claims within 30 days of receipt of the account, to either the service provider or the member. However, in the case of “clawbacks”, medical schemes must indicate under which of the grounds listed in section 59(3)(b) the claimed amounts are not due to the medical practitioner. The medical schemes therefore bear the onus of proving that they are owed money by the medical practitioner, and must provide justification for their findings.
When conducting a forensic audit, medical schemes often state that they are entitled to confidential patient records from the medical practitioner. In this respect, regulation
15J(2)(c) of the Act states:
“15J. General provisions
(2) Notwithstanding anything to the contrary in these regulations –
(c) subject to the provisions of any other legislation, a medical scheme is entitled to access any treatment record held by a managed healthcare organisation or healthcare provider and other information pertaining to the diagnosis, treatment and health status of the beneficiary in terms of a contract entered into pursuant to regulation 15A, but such information may not be disclosed to any other person without the express consent of the beneficiary” (own emphasis).
Consequently, and in line with the medical profession’s own ethical rules, confidential information cannot be disclosed to third parties without the medical practitioner having received consent, preferably in writing, from the patient. Disclosing this information without the required consent is in contravention of the ethical rules, the Health Professions Act No. 56 of 1974, the National Health Act No. 61 of 2003 and the Constitution, subject to the applicable exceptions.
[C]What to be cognisant of
In order to navigate the field of forensic audits, medical practitioners should always ensure that they keep proper patient records, use the correct billing codes, keep purchase-order records for any medications acquired and/or prescribed, avoid any misconduct, uphold the ethical rules and legislation and insist on peer review where necessary. Furthermore, in the event of a medical practitioner meeting with a medical scheme for any discussion concerning forensic audits, it is advisable to make sound a recording of the meeting.
There have been varying reports of the methods applied by medical schemes in soliciting information from medical practitioners, such as using threatening language and assuming that the medical practitioner is guilty of misconduct. Such bullying tactics usually result in medical practitioners feeling overwhelmed, and making payments to the medical scheme as a means of avoiding a protracted investigation. In some cases, medical schemes elect to withhold payments to medical practitioners pending finalisation of the investigation, or to impose the “clawbacks” immediately – or both.
[C]What you are permitted to request
Ideally, the forensic audits should be finalised within 30 days of commencement, provided that the medical practitioners co-operate with the investigation, where legally possible. Upon receipt of the intention to conduct a forensic audit, medical practitioners may ask for clarity on any vague assertions made by the medical schemes; request a time extension, so as to obtain legal advice; query the basis and quantification of any amounts alleged to be owed to the medical scheme; and enquire as to how the audit will be conducted, and by whom.
In light of the above, when approached by any medical aid scheme regarding a forensic audit, we urge our members to refrain from conceding to any wrongdoing and signing an Acknowledgement of Debt agreement. They should rather contact SAMA immediately for assistance. Once there is clarity on the nature of the audit, and on which patient files are required, and for what purpose, and if patient consent has been obtained, the files may be provided to the medical scheme. Should there be a quantum provided by the medical scheme, this may be disputed, and the medical scheme has to provide evidence of any such amounts allegedly owed to it. It is also worth noting that the findings of the medical scheme may be appealed, either internally or with the Council for Medical Schemes.