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Fraud in the healthcare industry remains a concern

September 27, 2023

The recent Mediclinic fraudulent claims allegations have brought industry fraud challenges back in focus, resulting in the hospital healthcare group launching an independent investigation headed by Steve Powel, the head of law firm ENSafrica’s forensic practice.

At the last Fraud, Waste and Abuse (FWA) Summit, the Council for Medical Schemes (CMS) shared that the healthcare sector experiences losses of between R22 -28 billion per year due to fraud, waste and abuse, while others estimate the cost to the industry to be around 15% of all claims due to fraud, waste and abuse.

Healthcare fraud can have devastating effects as this increases the cost of care, adding to already increasing health insurance and medical scheme premiums. This criminal offence is one of the drivers of accelerated medical inflation, which is then levied against insured persons. The social impact can lead to poor health regulation.

Types of Fraud, not limited to:

  • Patients – fraudulent provision of sickness certificates, prescription fraud, non-disclosure of pre-existing medical conditions, colluding with service providers to submit false claims.
  • Medical professionals – billing for services or procedures never rendered (inflation of the patient diagnosis code), performing unnecessary services solely for the purpose of generating payment and accepting kickbacks for patient referrals.

How to Prevent and Avoid Healthcare Fraud

  • Report fraud; contact your healthcare insurer as soon as possible if you suspect you may be a victim.
  • Check your policy or membership claims and benefit statement.
  • Be informed about your role as a customer, and never be afraid to ask questions about the procedure to your healthcare provider and the applicable billing.


On 24 November 2022, the Council for Medical Scheme (CMS) and various stakeholders in the private healthcare sector, such as the Board of Healthcare Funders (BHF), Financial Intelligence Centre (FIC), Healthcare Professional Council of South Africa (HPCSA), Corruption Watch, and medical scheme administrators adopted the industry Code of Good Practice(CoGP).

CoGP is a principled approach including, but not confined to the prevention, investigation, and penalisation methods to mitigate and manage Fraud, Waste and Abuse(FWA) to facilitate the resolution of disputes in FWA-related matters according to Section 59 of the Medical Schemes Act( Act 31 of 1998). The code details the roles, responsibilities and rights of members/beneficiaries, 3rd parties, healthcare providers, healthcare facilities and regulators. This also includes policies, procedures as well as the methodologies to be used in the prevention, detection, and investigation process.

The curtailment of loss through fraud can have a ripple beneficial effect, as it could result in medical insurers and medical schemes having additional provisions to enhance their benefits and bring about a much-needed reduction in medical inflation. This, in turn can affect the affordability of private healthcare cover. All healthcare industry stakeholders have a responsibility to report fraud by taking the necessary steps; in doing so we protect the integrity of the country’s healthcare system.

Complaints channels with various healthcare providers:

  • Health Professionals –
  • Private Hospitals –
  • Nurses–
  • Brokers –
  • Medical Schemes –
  • Other Health Insurance Products – (short-term insurance ombudsman) or (long term insurance ombudsman)

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