Mediclinic has launched an independent audit to investigate claims from a whistleblower that the healthcare group manipulated patient bills for financial gain.
News24 recently reported that a whistleblower, claiming to be a former Mediclinic manager, said Mediclinic manipulated patient bills to benefit the hospital group.
The whistleblower claimed that when a patient died in a hospital emergency room, Mediclinic case managers were sometimes expected to change their accounts to reflect an ICU death instead.
This is because the fixed fees associated with emergency room deaths are lower than ICU death fees.
The whistleblower also alleged that the clinical coding of patients’ accounts was manipulated for medical scheme claims.
Medical schemes often use an alternative reimbursement model (ARM) with hospitals, where they pay a fixed amount for specific medical care or treat a particular disease.
The alternative to an ARM would be the medical scheme paying for each service rendered.
Medical schemes often prefer ARMs, which may discourage hospitals from providing unnecessary services.
However, when Mediclinic faced a loss under an ARM, some employees would allegedly manipulate the coding of the cases to save the company money.
For example, Mediclinic could primarily use hip and knee replacements for ARMs. Within this system, a set fee is charged for the procedure regardless of hospital stay duration or complications.
This approach, therefore, transfers the risk to the hospital – they earn a substantial fee per operation, and if a patient is discharged quickly with few complications, they win.
However, extended patient stays due to complications incur costs that the hospital must cover.
Mediclinic employees would then manipulate the coding on patient accounts to reflect a different diagnosis or procedure to prevent losses from ARM cases.
This could involve excluding complicated cases from ARM agreements or inflating the costs of simpler cases.
Employees would also monitor the hospital’s daily profit and loss reports to add high-cost coding when losses grew too large, News24 reported.
The whistleblower revealed this information to over 50 principal officers of some of South Africa’s most prominent medical schemes.
Since this information has become public, Mediclinic has launched an independent audit to investigate the claims.
“The leadership of Mediclinic immediately commissioned an independent audit by an external expert to review the accusations and the implicated hospital operations upon learning of the accusations,” the company said in a statement.
“Mediclinic views these accusations in a severe light as it impacts vital relationships with healthcare funders and patients.”
The healthcare group said it prides itself on applying uncompromised ethical practices throughout every aspect of its entire business.
“Notably, the e-mail’s anonymous author identified themselves as a former Mediclinic employee who claims to have worked as a case manager and coder at Mediclinic,” the company said.
“The author also mentioned their resignation, the fear of personal victimisation, and the victimisation of others, which the audit will thoroughly investigate.”
“Contrary to the accusation, Mediclinic prides itself as a proud preferred employer where employees are valued, and their views heard.”
Mediclinic said it is confident that the audit will confirm its billing processes are “accurate and ethical”.
“However, should the external experts find any accusations true, Mediclinic will not hesitate to act decisively and appropriately to the findings.”
Discovery Health investigation
Discovery Health CEO Ryan Noach told Daily Investor that the company has reviewed the anonymous report and takes it very seriously.
“We will complete an exhaustive review. We have already commenced an investigation into relevant claims from Mediclinic,” Noach said.
“We have been assured by Mediclinic of a full and thorough investigation into the matter, including a comprehensive report back on the findings and outcomes of the independent review they have commissioned.”
Based on the findings of this investigation, Discovery Health Medical Scheme (DHMS) will determine what further action is required.
“In all cases where Discovery Health identifies fraud, waste and abuse in DHMS claims, funds are recovered in full, considering these represent the accumulated members’ funds held within the scheme,” Noach added.
“Further to the financial recoveries, Discovery Health and DHMS follow a clear policy of zero tolerance for fraud, ensuring appropriate escalation and reporting to professional bodies and legal authorities.”
Discovery and Momentum Health Solutions have approached Mediclinic on the matter.
Daily Investor reached out to Momentum Health Solutions for comment but has yet to receive a response by the time of publication.