It was reported by KPMG (2010) that all Medical Schemes have a regarding the treatment of fraud perpetrators. There appears to be significant differences and inconsistency amongst schemes, with different schemes reporting different actions in response to uncovered fraud.
This indicates that there is no industry standard or legislation in South Africa that guides the policies of medical schemes in this regard.
The KPMG Medical Schemes Anti-fraud Survey conducted since 2001, also indicates a changing trend with regard to certain fraud treatment actions.
The most significant change in actions over the KPMG survey period of 2001-2009 was the following:
100% of respondents do NOT keep quiet about fraud. Over the 9 years this reflects a swing from 49% to 100%
Reporting to the applicable Governing Body increased with 28% versus 16% in the first survey
Reporting to SAPS has remained much the same with 99% of respondents „sometimes‟ reporting and 1% „never‟ reporting to SAPS
Instituting civil action for recovery has increased from 12% of respondents in the first survey saying they always institute civil action to 28% in the most recent survey
The blacklisting of service provider offenders has increased steadily over the nine year survey period although a lower percentage indicated that they „always‟ blacklist in 2009
Sharing information through the BHF FMU increased in the previous survey (2004-2006) but has decreased in the latest survey (2007-2009)
Negotiating settlements has moved from a majority of„ always‟ to one of „sometimes‟
Table 5.10 illustrates the views of the respondents with regard to the ethicality of these reported actions of medical schemes in response to uncovered fraud as reported by the KPMG Medical Schemes Antifraud Survey (2010).
The responses indicate which of the managed policies is perceived is most favourable and which as least favourable in terms of ethicality.
The mean response for the perceived ethicality of medical schemes in terms of their actions in response to uncovered fraud is 2.91. This indicates that the majority of the respondents feel that the actions of medical schemes are of a less ethical nature. Generally there is a high level of uncertainty regarding the perceived ethicality of the
Table 5.10 Perceived ethicality of the medical schemes treatment of fraud Statement Strongly disagree to disagree Uncertain Agree to Strongly agree Mean STD deviation
Medical Schemes sharing information about fraudulent Medical Practitioners through the BHF Forensic Management Unit is ethically acceptable 16 (34%) 13 (27, 7%) 18 (38,3%) 3,09 1,516
Medical Schemes reporting fraudulent Medical Practitioners to applicable Governing bodies are ethically acceptable 12 (25,6%) 15 (31, 9%) 20 (42,6%) 3,40 1,228
Medical Schemes instituting civil action against Medical
Practitioners for monetary
recovery of fraudulent claims are ethically acceptable. 23 (48,9%) 9 (19, 1%) 5 (10, 6%) 2,66 1,592
Medical Schemes blacklisting uncovered fraudulent Medical Practitioners is ethically acceptable 10 (21, 3%) 14 (29, 8%) 15 (31,9%) 2,91 1,330
Medical Schemes negotiating with uncovered fraudulent Medical Practitioners for settlement or recovery of losses are ethically acceptable 18 (38,3%) 16 (34%) 13 (27,7%) 2,68 1,416
Medical Schemes stopping direct payment to uncovered fraudulent Medical Practitioners is ethically acceptable 20 (42,6%) 9 (19, 1%) 18 (38,3%) 2,89 1,521
Medical Schemes keeping uncovered fraud quiet is ethically acceptable 32 (68%) 11 (23,4) 4 (8,5) 1,91 1,265
Medical Schemes reporting uncovered fraudulent activity to the South African Police Service (SAPS) is ethically acceptable
13 (27,7%) 4 (8, 5%) 28 (59,5%) 3,74 1,648
The most prominent responses were in terms of medical schemes keeping uncovered fraud quiet, 68% of respondents feel that keeping quiet or not reporting uncovered fraud is unethical. Instituting civil action against Medical Practitioners for monetary recovery of fraudulent claims and stopping direct payment to medical practitioners, is regarded as unethical by the majority of respondents, with 48,9% and 42,6% respectively indicating these believes.
5.3.5. Proposed resolutions
Questions were asked regarding possible resolutions of differences surrounding the issue of fraud investigation amongst medical practitioners.
Pertaining to who should conduct the investigations into suspect practitioners, most respondents (34%) agreed that it should be an Independent Non-legislative third party, such as an Ombudsman. The HPCSA followed second as a proposed investigative authority for the investigation of medical practitioners, with 21, 3% of respondents proposing this.
The remaining respondents views were; an Independent Third party legislative council (14,9%) , the Forensic Unit of the relevant medical scheme (10,6%), the Council of Medical Schemes (CMS) or Board of Healthcare Funders with an equal selection rate of 6,4%.Minority proposals included; affiliated associations of practitioners (4, 3%) such as the South African Medical Association (SAMA) or the Independent Practitioners Association (IPA) and the South African Police Service (SAPS) with 2,1% of respondents proposing this route.
Similarly, Table 5.10 below illustrates whom the respondents proposed as the ideal convenor of meetings between the relevant medical schemes and medical practitioners accused or suspected of fraud.
Table 5.10 Proposed convenors of mediation meetings
Convenor Percentage
Forensic Unit of the relevant scheme 21,3
Affiliated Associations of the Medical Practitioner e.g. SAM
23,4
Council of Medical Schemes (CMS) 12,8
Health Professions Council (HPCSA) 4,3
Board of Healthcare Funders (BHF) Forensic Unit 4,3 An Independent Third party Legislative Council 12,8 An Independent non legislative third party e.g. an
Ombudsman
21,3
Along the continuum of Alternate Dispute Resolution (ADR), Table 5.11 outlines the responses regarding how disputes pertaining to suspected fraud should be managed.
Table 5.11 Proposed Alternate dispute Resolution methods
Statement Percentage
Disputants communicating with each other , directly or indirectly about the issue in disagreement in order to reach a settlement of their
differences
8,5%
A process whereby a neutral and impartial third party (the mediator) facilitates communication between the parties to enable settlement of disputes, non-binding and not legally enforceable.
55,3%
Resolution outside the courts, where the parties to a dispute refer it to an arbitrators, by whose decision (the "award") they agree to be bound and decisions is enforceable.
14,9%
A legal proceeding in a court, a judicial contest to determine and enforce legal rights.
This table clearly indicates that the vast majority of respondents (55, 3 %) were in favour of a neutral third party as mediator and a non-binding and not legally enforceable settlement of disputes.
Figure 5.5 indicates the respondent‟s views on how funds recovered from fraudulent practitioners should be redistributed. The most common view was that recovered funds should be rewarded or refunded to the defrauded medical scheme beneficiary (29, 62%), followed by refunded to the particular Scheme (17, 36%) and only 1,2% of respondents were of the opinion that recovered funds should be awarded to the Forensic unit of the HPCSA.
Figure 5.5 Proposed distributions of recovered funds
5.4 Conclusion
This chapter presented an analysis and discussion of the empirical results. Chapter six will conclude with a discussion of managerial implications and recommendations.
36%
62%
2%
Redistribution of recovered funds
Refunded to the Scheme
Refunded to the Medical Scheme beneficiary
Awarded to the HPCSA Forensic Unit
CHAPTER SIX
FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
6.1 INTRODUCTION
Following the results presented in Chapter Five, the managerial implications of these results will now be discussed in relation to the literature review and the specific research questions. The aim of this chapter is to draw conclusions from the literature and the empirical study results about a stakeholder and issue management approach to business ethics.
Recommendations are made for the development of a protocol for the ethical investigation and management of medical schemes fraud, committed by medical practitioners in South Africa.
The research limitations and recommendations for further research are presented as well.