JOINT INVESTIGATION, SHARING OF INFORMATION AND KNOWLEDGE; DATA SHARING VERSUS ORGANIZED CRIME

1. JOINT INVESTIGATION, SHARING OF INFORMATION AND KNOWLEDGE; DATA SHARING VERSUS ORGANIZED CRIME

2. Content • Introduction. • Current Approach • Principles for consideration • Possible Approach • Sharing of Information & Conducting Joint Investigations. • Benefits and Associated Risks

3. introduction

4. Introduction • The scourge of fraud (and abuse) impacts all spheres of business and the Healthcare Industry is not excluded. • Healthcare fraud and abuse inevitably places pressure on the sustainability of medical schemes, and more so the industry. • During 2001 reported incidents of healthcare fraud investigated peaked at 10,000, while its lowest number was recorded in 2008 with 3,439 matters being investigated. • A growing number of investigations shows groups of people engaging in organised crime activities in order to benefit unduly through the systematic targeting of medical aid schemes (collusion at core)

5. Introduction (Cont.) • In South Africa there are 95 different medical schemes, with beneficiaries concentrated in economic hubs • 30 Administrators, with 3 dominant ones (75% of Schemes) • Membership for 2012/2013 looking after approximately 9 million lives just under 20% of population • If 5% of the beneficiaries/providers benefited from irregular claims to the value of a once off R200 per beneficiary the potential loss to the industry would R86.7 Million. • Approximately half of national healthcare expenditure (8,2% of GDP) on private healthcare – economic and political power • Tax, employment, assisting Government fulfill its mandate • Over 14 000 GP’s and Specialists servicing the private healthcare sector • Brokers servicing majority of lives • Medical schemes’ real expenditure levels per beneficiary have risen substantially over the period 2000 – 2012. This is driven by profit motives – which fraud and abuse is one

6. Current Approach

7. SUGGESTED Approach

8. For Consideration • A combined and independent approach by various role players in the healthcare and law enforcement agencies to deal with the holistic issue of fraud, waste and abuse through prevention, detection and consistent response initiatives • Challenges facing industry face banks and short term insurance : organized themselves via non profit structures • Non profit and non competitive structure for industry • Centralized data repository and set sanctions • Role for all suppliers via the structure • data analysts, forensic investigators, marketers, law enforcement agencies • Equitable subscription model for Schemes: direct beneficiaries • Clear role of administrators with rights vesting with Scheme • Removal of fraud management as a service value add/ competitive advantage but an industry obligation • Real time integration with Scheme databases e.g. claims volumes per provider • Prepare for NHI

9. Sharing of Information & Conducting Joint Investigations • No competitive information to be shared • Rules for the sharing of information should be set-up so that there is a common understanding of what is allowed to be shared. • A centralised Hub to store information and track the movement of information for use by the various role players. • A industry forum (Chaired by a retired Judge) comprising of active role players to govern and guide the sharing of information and investigative methodology in this regard. • Schemes • Administrators • Law enforcement agencies • Industry Forums

10. Risks Associated with Sharing Information • Non-disclosure of information for example critical case management information not provided. • Inappropriate disclosure where wrong information is deliberately provided. • Information quality is poor due to critical data not being kept up-to-date. • Industry information standards to be set • Information security may be at risk if the information is intercepted by inappropriate persons during the sharing process. • Information use of information for other purposes, other than the reasons for which it has been collected. • Independent party to have strong technical skills with limited direct association with industry players e.g. rendering services to Schemes

11. Benefits Associated with Sharing Information The benefits of appropriate information sharing may positively impact on stakeholders, business activities and processes. Some benefits may include: • Improving monitoring. • Reducing duplication of data collection. • Improving engagements with stakeholders. • Improving service delivery to members. • Reducing breaches for future exploitation and manipulation. • Promoting sustainability of medical Schemes

12. Possible Approach

13. Possible Approach

14. Industry Body - Structure

15. Role Players • Some role players for consideration • Medical Schemes; • Medical Scheme Association; • Administrators; • Brokers; • Professional bodies mainly HPCSA and SAPC; • South African Police Services (“SAPS”); • Asset Forfeiture Unit (“AFU”); and • National Prosecuting Authority (“NPA”) (dedicated courts) • SCCU (dedicated resources for medical schemes)

16. Existing Examples • South African Insurance Crime Bureau (“SAICB”); • Launched in 2008 to address organised fraud and crime in the short term insurance industry • Brought the various agencies working in the broader fight against commercial crime closer together for the benefit of all • Financial Intelligence Centre (“FIC”); • was established under the FIC Act No. 38 of 2001, in 2002 • Intended to break the cycle used by organised criminal groups to benefit from illegitimate profits • leading player in the aggressive combating of money laundering and terror financing

17. Existing Examples • South African Banking Risk Information Centre (“SABRIC”); • Not for Profit Company formed by the 4major banks to assist the Banking and Cash in transit companies combat organised bank-related crimes • Business Against Crime South Africa (“BACSA”) and • get business’ ‘own house in order’ by eliminating crime-enabling processes, systems and approaches, and improving crime prevention measures within the control of business

18. Let’s Begin ….. • The organised fight against medical aid fraud and abuse

19. Conclusion • Good (joint) and proper governance within the industry will ensure a continuous stainable industry • Fraud and abuse is a significant risk for medical schemes and its management should not be treated as a competitive service • An organised and effected approach is needed before it becomes too big as the wastage is having an obvious impact on the industry • As equals let’s treat this surge together

20. THANK YOU