Report finds racial bias by medical schemes

The long-awaited report confirmed allegations of racial discrimination and unfair practices by some of South Africa’s leading medical schemes against Black healthcare practitioners.

Presented by Panel Chair Advocate Tembeka Ngcukaitobi, the report exposes systemic procedural unfairness and a deeply entrenched power imbalance that disproportionately impacts Black medical professionals.

The inquiry, launched in 2019, scrutinised practices by schemes such as Discovery, Medscheme, and the Government Employees Medical Scheme (GEMS) between 2012 and 2019.

"We confirm the findings and recommendations in the interim report, that the procedure followed by medical schemes when they claw back monies allegedly owed by practitioners or when they investigate instances of fraud, waste and abuse is unfair," said Ngcukaitobi.

The report’s key findings point to racial bias.

According to statistical risk ratios developed during the investigation, Black practitioners were significantly more likely to be flagged, investigated, and penalised compared to their white counterparts.

• GEMS (2014): Black dental therapists were up to 3 times more likely to be flagged.
• Discovery (2017): Black psychiatrists were 3.5 times more likely.
• Medscheme (2018): Black anaesthetists were 6.5 times more likely to be found guilty of fraud, waste and abuse (FWA)."These risk ratios are not scientific certainties, but they are highly probable indicators of discrimination," Ngcukaitobi clarified.

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

The report criticises the Medical Schemes Act for lacking clear procedural guidelines on FWA processes. This legal vacuum allows medical schemes too much discretion in how they investigate and penalise practitioners.

"There is no regulation governing how schemes should investigate or claw back funds. This creates an environment ripe for abuse and inequality," said Ngcukaitobi.

The panel has proposed several reforms to improve transparency and fairness:

1. Early Warning System: Schemes must notify practitioners immediately if there is any suspicion of misconduct, giving them a chance to respond before punitive action is taken.
2. Clawback Review: The current three-year retrospective clawback period must be reviewed to avoid unjust financial burdens on practitioners.
3. Legal Support Mechanisms: A neutral tribunal or legal aid structure should be established to support practitioners during FWA investigations.
4. Algorithm Transparency: Schemes must disclose the AI and software used to detect FWA to a regulatory body like the Council for Medical Schemes (CMS) to ensure accountability and fairness.

Ngcukaitobi also emphasised the need for annual racial risk ratio audits by schemes to monitor and correct potential discriminatory trends before they become entrenched.

Motsoaledi has yet to comment formally but is expected to engage stakeholders on potential legislative amendments to the Medical Schemes Act, as suggested by the panel.

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