BHF rejects report, denies racial bias by medical schemes

The long-awaited report confirms allegations of racial discrimination and procedural unfairness by major medical schemes against Black healthcare practitioners.

While the report highlights systemic inequality, the BHF claims the findings are "fundamentally flawed" and based on poor methodology.

"If allowed to stand, this report will open the door for runaway fraud and corruption in the healthcare sector," said BHF Managing Director Dr Katlego Mothudi.

The Section 59 Panel, chaired by Advocate Tembeka Ngcukaitobi, found that between 2012 and 2019, Black practitioners were significantly more likely to be flagged and penalised for alleged fraud, waste, and abuse.

The investigation specifically identified Discovery, Medscheme, and the Government Employees Medical Scheme (GEMS) as having disproportionately targeted Black professionals.

Risk ratios presented in the report revealed that:

• Black dental therapists at GEMS were up to 3 times more likely to face FWA penalties.
• Black psychiatrists at Discovery were 3.5 times more likely to be targeted.
• Black anaesthetists at Medscheme were 6.5 times more likely to be found guilty of fraud, waste and abuse.

"These risk ratios are not scientific certainties, but they are highly probable indicators of discrimination," said Ngcukaitobi.

"The evidence before us shows racial discrimination against Black service providers."

The panel also found that FWA procedures lacked fairness, independence, and due process.

Key recommendations include:

• An early warning system to alert providers to pending fraud, waste and abuse actions.
• Reviewing the three-year clawback period, which often leads to unjust financial strain.
• Establishing a neutral tribunal to support accused practitioners.
• Transparency on algorithms used by schemes to flag suspicious claims.

In response, the BHF accused the panel of misusing data and overlooking critical context.

Dr Mothudi said the racial disparities were a result of "exposure bias," noting that some schemes serve predominantly Black member bases, increasing the likelihood of interaction with Black providers.

"The investigation confused correlation with causation; there are valid reasons why certain groups may be flagged more frequently, such as practice location, patient volume, or billing complexity.

"We reject the suggestion that these findings prove systemic racism. Our members are committed to fairness, and we’ve already implemented reforms to improve transparency and engagement with providers."

These reforms include auditing and revising fraud, waste and abuse protocols, creating provider engagement platforms, educating healthcare providers on billing codes and procedures and adopting a more respectful tone in communications.

Despite rejecting the report’s findings, Mothudi said the BHF remains open to collaboration with the Council for Medical Schemes and the Department of Health to refine regulations and promote fairness.

Minister Motsoaledi has yet to comment but is expected to review the report’s proposals, which include legislative amendments to the Medical Schemes Act.

READ FULL REPORT BELOW: