CAPE TOWN, 8 MAY 2024: In an age where healthcare integrity is of the utmost importance, a
coalition of industry pioneers and technological trailblazers must lead the charge in driving
transformation to combat fraud, waste and abuse (FWA) in the healthcare sector.

As a focal point of discussion on day two of the 2024 BHF Annual Conference, Vusi Makanda,
HFMU Deputy Chairperson, and Manager of Fraud Management at Bonitas, set the stage for an
interactive discussion on these healthcare issues.

“Collaboration is paramount in addressing the challenges of healthcare FWA, evidenced by the
erosion of trust and substantial financial losses highlighting the call for collective action,” says

Dr Hleli Nhlapo, MD of the medical schemes division at Dental Information Systems (DENIS),
echoed Makanda’s sentiments. To this end, Nhlapo set the scene on the current state of FWA in
the healthcare industry, suggesting that it exerts unnecessary pressure on resources while
undermining trust between stakeholders.

“Perpetrators are employing increasingly sophisticated tactics, leveraging technology and
syndicates to orchestrate large-scale schemes, while regulatory delays and prosecutorial
challenges hinder effective resolution,” says Nhlapo. “Despite this, collaboration among
healthcare funders has emerged as a crucial solution, with recent initiatives indicating a
promising shift towards industry-wide cooperation in addressing these complex challenges.”

Following Nhlapo’s address, Roxane Ferreira, Head of Department at the Association of
Certified Fraud Examiners (ACFE), alluded to several global trends in FWA that are plaguing
the global industry.

The impact of these is extensive and has led to concerning financial situations for healthcare
systems around the world. So much so that Ferreira’s insights suggest that in the United States,
it is estimated that as much as $68 billion is lost every year on the back of FWA.

“In South Africa, the problem is not much better, with between R8 billion and R13 billion being
lost annually to this. With between 15-35% of all claims submitted regarded as being fraudulent
or abusive, the plight is adding approximately R22 billion to the cost of private healthcare,” adds

Healthcare fraud is perpetrated by a variety of actors within the system, ranging from medical
scheme staff to service providers and even syndicates. These perpetrators exploit vulnerabilities
at different points in the healthcare process, whether through falsifying claims, overbilling or
engaging in other deceptive practices.

Moreover, medical scheme members themselves, as well as patients, may also be complicit in
fraudulent activities, while brokers and manufacturers can also play a role in facilitating these

Ferreira highlighted the multifaceted approach employed in identifying healthcare fraud, citing
that 70% of cases stem from tip-offs or received information, while the remaining 30% are
uncovered through data mining, audits and investigations.

“Healthcare fraud encompasses various deceptive practices,” suggests Ferreira. “ Some of the
most common ones include merchandising, where pharmacies sell non-healthcare
merchandise, but claim for a healthcare service; false claims by claiming for services rendered;
ATM scams where doctors submit false claims and provide cash to patients; card farming where
members lend their membership cards to non-members; code gaming that involves doctors
manipulating billing rules to increase revenue; and lastly, the hospital cash plan fraud that
entails doctors and members colluding to arrange unnecessary hospital admissions.”

In response to the escalating challenges of healthcare fraud, Ferreira adds that the sector is
increasingly turning to innovative solutions, with the integration of Artificial Intelligence (AI)
emerging as a pivotal strategy.

“AI technology offers the capability to analyse large volumes of data rapidly and accurately,
enabling the identification of suspicious patterns and behaviours,” she says. “By leveraging AI
algorithms, healthcare providers can proactively identify questionable activities, thereby
safeguarding resources and maintaining the integrity of healthcare systems”

Using these advanced algorithms, AI can swiftly identify irregularities, such as sudden spikes in
billed procedures and visit rates. Furthermore, it can compare billing practices, verify purchases,
compare the geographical location of a patient against the practice, and treatments billed for the
same or similar treatment by other practices.

In the fight against healthcare FWA, collaboration and technological innovation are emerging as
critical pillars. By harnessing advancements such as AI, healthcare systems can effectively
detect and prevent fraudulent activities, thus safeguarding resources, upholding the integrity of
patient care and rebuilding trust.