INVESTIGATION: The chilling curse of black healthcare professionals in South Africa






Ayanda Mdluli

JOHANNESBURG – Dr. Smangaliso Ndlovu* a successful and proud black man at 32 years of age was just starting to live his dream as a medical doctor in South Africa.

Coming from a poverty-stricken community at a township called Kwanyamazane, Lekazi in
Mpumalanga, he had defied the odds and went through Medical school in KwaZulu-Natal where he became one of the first black people of his generation to obtain a medical degree in his community.

His mother was proud of what her only son had achieved. Soon, they would move out of the corrugated iron shack that he had called home in a community ravaged by poverty, drug abuse and lack of access to opportunities.

When he moved back to his community after finishing his locums, he gathered the little that he had and opened up two medical practices in Nelspruit, the economic hub of his home province.

He served people from all walks of life and his life was starting to change. As his business in the medical field started to take off, he finally bought his mother the dream house that she had always wanted and he eventually got to marry the girl of his dreams.

Through his hard work and dedication, he was finally living the post-apartheid South African dream, where as a black man he could be the change that he wanted to see, not just in the community but to the eyes of many other young black males like himself who never had a father figure.

Then one day, tragedy struck and it was all downhill from there.

He received a visit at his practice from a forensic specialist at one of the big four medical aid companies in South Africa. He was accused of fraud and was informed that he was under investigation and his medical aid payments, which were the bread and butter of his business were stopped.

His best friend, Sipho Mseleku* goes on to explain his story: “He vehemently opposed the alleged wrongdoing and tried to fight back to clear his name but to no avail. The medical aid company was too powerful, with more resources than he had for extensive legal battles. He was brought to financial ruin and eventually lost his house, his car, his mother’s house that he was still paying for and his wife and kids eventually left him after descending into alcoholism because of the stress, trouble, and strife. One day he decided that he could not take it anymore and ended his life by putting a gun to his head and pulling the trigger.”

This is the story of many black healthcare practitioners in South Africa who have been brought to financial ruin because they are allegedly systematically targeted and pushed out of business by medical aid companies and administrators who make a killing off claiming retrospective acknowledgments of debt that play a big role into bringing in major profits for the administrators of medical aid schemes in South Africa.

Every year, medical aid groups such as Discovery, GEMS, and Medscheme, through effective PR campaigns reveal how they have made inroads into fighting against fraud and corruption committed by healthcare professionals.

Medscheme recovers millions in healthcare fraud, waste, and abuse

An investigation by Africa News 24-7 has revealed that there may be an even darker side on the other side of the spectrum where medical aid companies, in cahoots with some pharmaceuticals and their in-house forensic specialists are targeting and milking black doctors dry through “corporate extortion” that results in deadly and often devastating consequences for some of the parties involved.

Dr. Prudence Buthelezi, a healthcare practitioner and secretary general of the National Healthcare Professionals Association says healthcare professionals such as speech therapists, pharmacists’ dentists, doctors and many others in the field are victims of institutionalised racism where medical aid administrators and schemes are at the centre of bringing them to financial ruin through illegitimate forms of recovering monies claimed from them by black healthcare professionals in SA.

She claims that the rights of healthcare practitioners are being violated on a daily basis by medical aid administrators and companies who are allegedly operating as a law unto themselves through unscrupulous practices.

She alleges that these medical aid organisations are guilty of violating their privacy, dignity and the confidentiality of patients because they pitch unannounced in their practices with cameras, conducting illegal probes on doctors and patients in their offices or practices.

“They send these people who are untrained to conduct investigations into the healthcare industry because they are not healthcare professionals and do not have qualifications. This violates our privacy and they ask you to provide the files of the patients which is a violation of the health professions act. On top of it all they use bullying tactics and dictate how we must treat our patients,” says Buthelezi.

A prescription vs claims conundrum

She also explains that there is a process referred to as a prescribed minimum benefit where doctors are forced to prescribe the administrators’ preferred drugs for patients which are usually cheaper and less effective.

The problem with this process is that if a healthcare practitioner uses their own prerogative to prescribe medicines that they think is best for the client, the administrators will accuse the doctor of trying to defraud the system. This, according to Buthelezi, leaves room to speculate that administrators are also in cahoots with pharmaceuticals to pressure doctors into prescribing only certain types of drugs.

According to Buthelezi, these drugs can be less effective and at times may be considered not the best for treatment as each case with patient offers a unique experience or reaction to certain medications. In essence, Buthelezi says these medical aid organizations are interfering with the clinical management of the patient. Even with certain Anti-Retroviral (ARV) treatment drugs used to treat HIV/AIDS, doctors are allegedly being told not to prescribe from certain companies as this will result in stern action being taken against them by medical aid administrators.

“Not only are we being extorted but these companies are also hindering the clinical management process of our patients. I suspect that there is an incentive happening with pharmaceutical companies that we are not aware of. The people who dictate to us what to prescribe are not medical doctors and at best they only have matric qualifications in their relative fields which is, by any means is tantamount to a serious breach of ethics. There is no proof that these individuals work closely with healthcare professionals. We are not condoning fraud in any way. If someone is caught committing fraud they should go to jail. What we have a problem with is the principal behind the tactics being used which are also targeting innocent doctors and pushing us out of business and bringing us to
financial ruin,” she says.

Other healthcare professionals who spoke to Africa News 24-7 on condition of anonymity revealed that one of the other underlying problems is the claiming system imposed by medical aids through the use of International Classification of Diseases (ICD) Codes.

These healthcare professions revealed that the main culprits behind the issue are Discovery, Polmed, Bonitas, Government Employees Medical Scheme (GEMS) and Medscheme which serves as an administrator for a wide range of medical aid companies in SA.

A healthcare professional who is currently under investigation and who claims to be on the brink of financial ruin says that doctors often conduct various diagnosis for their patients which can be difficult for medical aid companies to understand because they are not trained medical professionals.

In addition, the system also does not disseminate information to the healthcare professionals effectively which results in confusion. The doctors claim that in some instances the system is flawed which contributes to the entrapment of doctors by medical aids.

He also commented: “Some medical aids have also prohibited doctors from treating pap smear for women. There is also insufficient training and when mistakes are made in claiming they extort money and charge you more than what you had claimed initially. We are under siege and we are being extorted through a process of racial profiling. They extort money from you and enter your premises with illegal cameras. They also harass you and try to trick you. This is how ridiculous the system is, if you made a claim in 2008 for a box of gloves, today they can come and claim that you committed fraud and slap you with a R500 000 acknowledgment of debt which you will be forced to sign under duress,” he said.

‘Killing us economically’

Africa News 24-7 is in possession of documents from medical aid administrator Medscheme showing how one doctor was fined more than R150 000 on two separate occasions in less than a month.

In the letter, Medscheme claims that it is recovering payment irregularities from some of its
members (Nedgroup Medical Aid Scheme, Polmed, SABC Medical Scheme, Sasolmed) but does not stipulate how these claims were erroneously made in the first place. The letter does not go into details as to which specific products were claimed and how much they cost yet the doctor is expected to cough up more than R62 000 on March 28 and another R92 000 on April 11, 2018.

In the letters, the doctor is accused of claiming close to 23 hours in a 24-hour day. However, a letter of appeal sent by the doctor states that the hours accumulated as a result of treating inpatients and outpatients at both of his practices as well as the three private hospitals in Mpumalanga over a period of time. In the correspondence, he tries in vain to explain to a Ms. Shaw from Medscheme.

On the face of it, it appears as though the pleas fall on deaf ears even when he highlights that at no point was he ever informed that he was under investigation by the company.

(Click here to view Letter 1)
 (Letter 2)
(Letter 3)

In addition, Africa News 24-7 is in also in possession of a document from GEMS circulated to industry insiders in December 2017. In this letter, the organisation reveals a number of about 500 healthcare practitioners who have been blocked from payments by the company.

Upon closer inspection of the list and the surnames, it is safe to conclude that most of these individuals are black and Indian with only a handful of people who have what can be considered as white surnames in the South African context.

A detailed query was sent to GEMS. At the time of publishing this story, the company had not responded to these allegations made against them.

(Please see the list from GEMS)

According to Dr. Donald Gumede, another healthcare professional with inside industry knowledge revealed that medical aid administrators also limit the number of patients that one can see. In addition, since medical aid schemes are non-profit organisations, they will have an in-house private company that serves as an administrator. What this essentially means is that the medical aid scheme and the medical aid administrator become judge, jury, lawyer, and executioner all in one go, says Gumede.

An example of this can be found at Discovery where Discovery Health is the administrator of several medical schemes such as Glencore and Discovery Health Medical Scheme.

In another piece of correspondence in our possession. Medscheme tells a black doctor that he will only be allowed to treat each patient once a day, one hour a day regardless on if the person being treated may be on their death bed, requiring extensive treatment for over a longer period of time. In other correspondence, a doctor is told that he can only operate his practice four hours in a day.

“This is an example of how they limit the number of patients you can treat. Also, once you have been told that you are under investigation they have the power to stop all payments from the various medical aid schemes. In this instance, the administrators are telling us that sick people can be barred from being treated in the interests of their profit margins. They are killing us economically,” says Gumede.

Buthelezi also adds: “Monies being claimed from us do not go back to the patient. It goes to the pockets of medical aid administrators. If they are accusing these doctors of fraud why don’t they go to the police? They report you even though you have paid your money through what is called an acknowledgment of debt. Also, it’s important to note that most doctors who dispense drugs are blacks because in the townships and rural areas there is a limited number of pharmacies. Most of them dispense their own medication so the medical aid administrators are trying to cut them out of that process,” she explains.

Medical aids respond

CEO of Discovery Health, Dr. Jonathan Broomberg admitted that where there is prima facie evidence of material fraud, the company does on occasion use probes to confirm fraudulent practices.

He maintained that these methods were legal and have been tested in courts of law and are sometimes essential to proving that fraud exists.

“Where required as part of an investigation, we may ask to see patient files in order to validate claims which were submitted and paid. This is always done based on the consent provided by members as part of the contract they have with their medical aid,” he said.

He denied that there was any racial bias being committed against black doctors.

“We investigate all cases of fraud that we identify, without any regard to the race, gender or any other feature of the practitioner. We do not keep statistics on the racial or other demographics of practitioners involved in fraud and cannot comment on the racial or other breakdowns of those accused of fraud,” he says.

When asked if he was aware that there are some doctors who have committed suicide because they were brought to financial ruin after being accused of fraud, he said: “We are not aware of any situations of this kind.”

He also denied that his company dictated to doctors what they had to prescribe to patients.

“Medical schemes have to ensure affordability and sustainability. To do this, they use medicine formularies which provide a guide for a prescription. Doctors can always use alternatives not on the list and can also motivate for other medicines if their patients require these for clinical reasons,” he explained.

Kenneth Marion, the Chief Operating Office at Bonitas distanced the company from allegations of recording patients and doctors.

“All claims are monitored through forensic analysis. We are not participants or proponents of this type of behavior. We seek to act in the best interest of our members of at all times. This includes respecting their privacy and right to confidentiality,” said Marion.

He explained that all their investigations are done forensically, based on claiming codes and patterns which are monitored purely on the claims analysis.

He added: “All medical schemes are mandated by the Council for Medical Schemes and the Medical Schemes Act of 1998 to create a formulary for their specific plans. However, this serves as a guideline and members and practitioners still have the choice to use medicine that is not on the formulary, but this may attract a co-payment,” he said.

GEMS and Polmed (which is administered by Medscheme) were given a chance to respond to the allegations. Although the companies acknowledged receipt our query, they did not respond by the time of publication.

Recorded interview:

A doctor operating in Limpopo reveals how he was duped and pressured into signing a binding agreement by “forensic specialists” which has cost him his practice and his livelihood. Africa News 24-7 journalist Ayanda Mdluli spoke to the doctor who has asked us to keep his identity a secret for fear of being victimized by the powerful medical aid administrators and schemes. 

Note: Names marked with a * have been changed to protect the identities of the families and friends of the victims who committed suicide after being brought to financial ruin.