Battle lines sharpened across the health sector as an inquiry accused the top medical schemes across SA of racially biased fraud investigations, setting regulators and industry players on a collision course over fairness and the role of tech in institutional decision-making.
Chaired by advocate Tembeka Ngcukaitobi, the independent panel found black practitioners face a markedly higher risk ratio for audit and sanction than their white counterparts under the fraud detection systems used by SA’s biggest medical schemes.
Discovery Health, the Government Employees Medical Scheme (Gems) and Medscheme were cited as primary actors in a pattern described as procedurally unfair and discriminatory.
But the Board of Healthcare Funders (BHF) has rejected the report, calling its methodology and interpretations unsound and warning that adoption could undermine industry integrity.
“We believe these findings are demonstrably and fundamentally flawed and, if allowed to stand, will open the door for runaway fraud and corruption in the healthcare sector,” the BHF said in a statement.
The Council for Medical Schemes (CMS) appointed the panel in 2019 after black healthcare providers alleged racial discrimination by medical schemes, and its final report was handed to health minister Aaron Motsoaledi in Centurion on Monday.
The findings imply risk ratios are more than six times for black anaesthetists contracted by Medscheme, and three times and three and a half times for black dental therapists at Gems and black psychiatrists at Discovery, respectively.
The BHF, of which Gems and Medscheme are members, raised concerns over the racial classification techniques employed by the panel, including the use of surnames to classify providers, citing exposure bias within member demographics as a critical oversight, and the incorporation of nonindividual entities such as state hospitals and corporate groups into the analysis.
“One of the large schemes investigated ... serves a member base that is 91% black, which logically results in a higher rate of member interactions with black providers,” the BHF said.
It added that “many black physiotherapists practice in high-claim regions where schemes conduct more audits, or some may see higher patient volumes and therefore submit more claims, increasing the likelihood of being flagged regardless of race”.
When the data was adjusted to account for all relevant factors, such as demographic exposure, the likelihood dropped substantially, the BHF said.
Despite rejecting the findings, the BHF acknowledged that some providers had raised valid concerns about fairness and transparency.
It stated that member schemes had implemented reforms, including procedural safeguards, clearer communication with practitioners, and educational initiatives to enhance understanding of billing requirements and scheme rules.
According to the BHF, fraudulent claims, overservicing, abuse of benefits and improper billing practices cost SA’s medical schemes about R30bn annually.
“The BHF and its member schemes have a legal and moral imperative to tackle unethical and exploitive practices in the interest of all South Africans. We will not be deterred by unfounded claims of racial bias — corruption is corruption and must be rooted out,” BHF MD Katlego Mothudi said.
Medscheme declined to issue a separate comment, while Gems is reviewing the report and its implications. Discovery had not responded to the request for comment at the time of publication.
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