Professor Birgit Kuschke in the Department of Mercantile Law in the Faculty of Law (UP Law) at the University of Pretoria (UP) appeared in a Carte Blanche (CB) programme on Sunday, 25 July 2021, which investigated ‘Clawback audits on money long paid out by a leading medical scheme.  Some physiotherapists claim that a leading medical aid is unfairly tarring them with the same brush as fraudsters for honest coding errors.’

According to CB, ‘It’s a David and Goliath battle for physiotherapists going up against a leading medical scheme that clawed backs millions of Rand through alleged bullying tactics and pressure, years after professionals billed their patients.’

As Kuschke specialises in Insurance law; General law of contract; and Law of delict, CB approached her for a legal opinion on this matter.  She is Vice-President of the Presidential Council of AIDA World, and a member of the international Working Parties on New Technologies, Prevention and Insurance; Climate and Catastrophic Events; Personal Insurance and Pensions; and Dispute Resolution.

Newspaper articles have also covered this topic.  In the Business Maverick of 13 June 2021, Discovery Health has come under fire from medical practitioners for unethically ‘clawing back’ claims it had approved and paid, well past even the three-year common law prescription period.

The article inter alia states that ‘A medical aid fund must, in accordance with the Medical Schemes Act (MSA), query or dispute a claim within 30 days from the date of lodging, by providing written notice to both the fund member and the healthcare provider. The latter then has 60 days within which to respond and rectify the claim. If the scheme does not notify either party within 30 days that a claim is erroneous, or fails to allow correction and resubmission, the onus is on the scheme to prove the error.’

On 12 February 2018, the Health Professions Council of South Africa published the following:

‘Concern over clawback by medical aid schemes

The Professional Board for Physiotherapy, Podiatry and Biokinetics (PPB) under the ambit of the Health Professions Council of South Africa (HPCSA) is concerned that certain medical aid schemes are alleged to be behaving and or conducting themselves in an unethical manner towards registered practitioners, in particular, physiotherapists in private practice.

The main issues of concern are:

The unethical practice as referred above includes what is termed “clawback”. A clawback is an act of retrieving money already paid out to practitioners by withholding payments that are due for new claims submitted on behalf of other patients, until the alleged undue payments have been recouped or clawed back

The medical aid schemes engaging in clawbacks are said to be relying on Section 59 (3) of the Medical Schemes Act 131 of 1998 which provides that: “Notwithstanding anything to the contrary contained in any other law a medical scheme may, in the case of— (a) any amount which 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 to; or (b) any loss which has been sustained by the medical scheme through theft, fraud, negligence or any misconduct which comes to the notice of the medical scheme, deduct such amount from any benefit payable to such a member or supplier of health service”.

The PPB’s concern with Section 59 (3) (b) as presented in paragraph 2.1 is that medical aid schemes may only deduct such amounts if there has been: theft, fraud, negligence or misconduct. As far as theft and fraud are concerned, they are of the view that an accused person should be found guilty of such offences by a court of law in terms of the Criminal Procedure Act 51 of 1977.

The PPB believes that should the medical aid schemes suspect any act of criminality such as theft or fraud, they should first report it to the necessary authorities to investigate and prosecute.

In addition, Section 34 of the Prevention and Combating of Corrupt Activities Act 12 of 2004 provides that: (1) Any person who holds a position of authority and who knows or ought reasonably to have known or suspected that any other person has committed— (a) an offence under Part 1, 2,3 or 4, or section 20 or 21 (in so far as it relates to the aforementioned offences) of Chapter 2; or (b) the offence of theft, fraud, extortion, forgery or uttering a forged document, involving an amount of R100 000 or more, must report such knowledge or suspicion or cause such knowledge or suspicion to be reported to any police official. (2) Subject to the provisions of section 37(2), any person who fails to comply with subsection (1), is guilty of an offence.

The Board explains that based on the provisions of Section 34 (1) & (2) of the act, we believe that the medical aid schemes in question should be reporting practitioners suspected of theft and or fraud amounting to R100 000 or more to the police.

As far as Negligence and Misconduct are concerned, we are of the view that the medical aid schemes should be reporting the matters to the HPCSA in terms of the Health Professions Act 56 of 1974. Only then, once due process has been served, can a medical scheme enforce its right in section 59(3) to withhold further payments to the guilty practitioner.

Kuschke’s view aligns with that of the HPCSA and the Board in that practitioners should be afforded a right to be “presumed innocent until proven guilty” as implicitly provided for in the Constitution of the Republic of South Africa 1996. She states that the schemes are currently acting as ‘prosecutor, judge, jury and executioner’ without compliance with the burden of proof they bear.

Practitioners who are “cornered” by these medical aid schemes are alleged not to be given an opportunity to make a representation or given a reason as to why they are being treated the way they are treated. Many are placed under duress to sign acknowledgments of debt in fear of losing their accreditation. This is unconstitutional as it is in contravention of Section 33 (1) & (2) of the Constitution as well a Promotion of Administrative Justice Act 3 of 2000 (Sections 3 & 5).

Instead, the medical schemes are said to be advising practitioners to bill using other codes, resulting in a situation where these practitioners are encouraged or forced into committing fraudulent acts to use codes for which they did not treat the patient. This isa contravention of Rule 7 (3) & (5) of the Ethical Rules of Conduct (No.R.717) of 4 August 2006 as amended by Government Notice No. R68 of 2 February 2009.

The other unethical practice as reported in Paragraph 1 relates to the allegation that the medical aid schemes in question are refusing to pay certain tariff codes, particularly rehabilitation codes such as 72501, 72503 and 72509.’

On 17 June 2021, in Fin24, an article was published on ‘Discovery defends clawing back money from doctors after 'irregular billing'’.  According to this article, ‘The company says it has been detecting these either through tip-offs or trends or information that emerges after the claim has been paid.

Discovery Health says it has been clawing back money from doctors following "irregular billing" - to protect its medical aid members. It further stated ‘medical schemes would lose billions of Rands each year if they do not claw back these monies.’ Discovery’s viewpoint and take on this matter was represented also during the CB broadcast on 25 July 2021.

Kuschke strongly endorses the Fraud, Wastage and Abuse measures implemented by schemes to track down practitioners who submit fraudulent or unnecessary claims, and to reclaim the irregular payments that were made. She, however, amplifies that where payments due for new patient claims that are being withheld based on allegations that older ‘debts’ or claims were fraudulent, without the scheme providing evidence to that fact, are unacceptable. Many practitioners who cannot continue with their practices due to the clawbacks, who never had a chance of proving their innocence, and feel extremely victimised, are sadly closing their doors.