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Interim report alleges possible discrimination against black practitioners

After various delays, including an urgent application to interdict the release, the Section 59 Interim Investigation Report into allegations of unfair racial discrimination and procedural unfairness, intended for release in December 2020, was released this week.  Judge Colleen Collison ruled on Tuesday that the applicants had failed to convince her why they had not approached the court earlier, since the report’s release had originally been planned for December.


In May 2019, members of the National Health Care Professionals Association (NHCPA) and Solutionist Thinkers made public allegations that they were being discriminated against by medical schemes and administrators and their claims were being withheld based on their race and ethnicity.

Medical schemes and administrators were making use of section 59 of the Medical Schemes Act (131 of 1998), to withhold payments to some of these medical practitioners once they had rendered healthcare services. The Council for Medical Schemes (CMS) then constituted a multi-disciplinary Steering Committee, consisting of the complainants, industry associations and co-regulators, that supported the establishment of an independent investigation to conduct an inquiry into the above allegations. This became known as the Section 59 investigation.

Investigation findings and impact on professionals

  1. Unfair racial discrimination

“After considering all the evidence and responses, we find that between 2012 and 2019 Black practitioners were more likely to be found to have committed FWA (Fraud, Waste and Abuse) than their Non-Black (White) counterparts, by Discovery, Medscheme and GEMS. This means, for the reasons provided in this interim Report, there was unfair racial discrimination.”

The panel found no evidence of explicit racial bias in the algorithms and methods schemes and administrators used to identify healthcare practitioners who had potentially done wrong. However, the probability that there was no correlation between racial status and the outcome of fraud, waste and abuse proceedings was ‘for all practical purposes’ zero, Advocate Tembeka Ngcukaitobi, the chair, said, according to a Business Day report.

  1. Unfair processes

The schemes and administrators were also accused of not following fair procedures when implementing their powers under section 59(2) and (3) of the Act. GEMS, Medscheme and Discovery denied that there was unfairness in the procedures they followed.

In general, the panel found that some of the current procedures followed by schemes to enforce their rights in terms of section 59 of the Act are unfair. “We have also found that Black providers are unfairly discriminated against on the grounds of race,” according to the interim report.

According to media reports various professionals indicated they were forced to close down after being coerced to admit fraud and others were forced to pay back fees they could not afford.

Medical Schemes respond

Medscheme said that it was disappointed that it was not afforded an opportunity to review the panel’s interim report before it was published. According to Executive director, Dr Lungi Nyathi, Medscheme’s fiduciary duty was to safeguard members’ funds and their access to affordable quality healthcare. Nyathi also reported that Medscheme’s forensic processes were fair, transparent and within the law.

The Principal Officer of GEMS, Dr Stanley Moloabi responded: “GEMS has noted with concern the preliminary findings, and as the Panel has afforded impacted schemes a period of six weeks to study the report and thereafter provide formal comments based on the interim findings, GEMS will take this opportunity to closely study the full report findings, and the recommendations of the Panel to establish a way forward.”

According to Discovery the panel clearly acknowledged that there is no evidence of deliberate, explicit racial prejudice in the methods and algorithms used by schemes and their Administrators. “Although we do not accept that there is racial discrimination in our processes, we accept and respect the recommendations of the investigation panel,” Dr Ryan Noach, CEO of Discovery Health commented.

“We are of the opinion that our members do not have an agenda to deliberately discriminate against a medical practitioner as we have no tolerance for any form of discrimination, ” Dr Katlego Mothudi, Managing Director of the Board of Healthcare Funders (BHF) responded.

It seems rather odd that an interim report is released before those implicated were given an opportunity to put their side of the story. This certainly slants towards creating bias. Had payments been withheld without evidence of fraud, it would most certainly be unfair discrimination. Had it been done, in accordance with the law, based on actual fraud, then it is difficult to see how those affected can cry foul.

Breaking news is that the National Health Care Professionals Association (NHCPA) plans to launch a class action lawsuit against medical aid schemes. This appears to be a bit premature, seeing that this is an interim report, and that the interim findings do not show any intended wrongdoing by the schemes involved.

Click here to access all the Interim report and related documentation.

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