Medical schemes racially targeted black healthcare providers

IOL News

08-07-2025

Health Minister Aaron Motsoaledi received the final report from the Section 59 Investigation Panel on Monday.
Image: Siyabulela Duda| GCIS
A PANEL established to probe allegations of racial discrimination by medical schemes has detailed how black healthcare providers were unfairly targeted by having their claims withheld based on race and ethnicity.
Health Minister Aaron Motsoaledi received the final report from the Section 59 Investigation Panel on Monday. The inquiry stems from public allegations made in May 2019 by members of the National Health Care Professionals Association (NHCPA) and Solutionist Thinkers, who alleged that medical schemes and administrators were unfairly withholding their claims based on race and ethnicity.
An independent investigation panel, known as the Section 59 Inquiry and comprising Advocate Tembeka Ngcukaitobi SC (Chairperson), Advocate Adila Hassim, and Advocate Kerry Williams, probed the allegations, to identify trends and make recommendations that may require legal or policy interventions.
The main focus of the investigation was on fraud, waste and abuse (FWA) and FWA systems, which refers to the systems used by the medical aid schemes and administrators to detect, investigate and determine providers who engage in FWA.
This investigation sought to determine if there is a systemic flaw in the Schemes and Administrators FWA systems, particularly the part of the system which claws back monies for providers where the schemes have suffered loss.
According to the report, the written submissions alleged that the schemes were intimidated and bullied providers through the implementation of their FWA systems, including by refusing to reimburse providers directly. The schemes were alleged to be treating providers unfairly and in particular were alleged to be targeting black providers.
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'The Schemes' FWA systems all made use of software or algorithms that were designed to flag providers who were suspected of engaging in FWA. The FWA systems also all made use of other investigative techniques – staff within the Schemes would receive the details regarding providers who were flagged as engaging in suspicious FWA behaviour and thereafter would engage with these providers, often requesting additional information from the providers to test if they were correctly flagged. None of the Schemes relied entirely on their software or algorithms to determine if a provider was guilty of FWA.'
A statistical analysis on the data found that across the board (regardless of the Scheme or Administrator involved; and generally in relation to almost all of the health care disciplines), black providers were much more likely than non-black providers to have been found guilty of FWA by the Schemes and Administrators concerned. This greater likelihood was measured in what has become known as a 'risk ratio'.
'The FWA system produces disparate outcomes based on race – demonstrates that there are probably errors in the FWA systems which must be corrected. For GEMS, black dental therapists in 2014 experienced risk ratios of between 2.7 and 3.27 – i.e. were generally approximately three times (300% more) more likely than non-black dental therapists to be guilty of FWA. For Discovery, black psychiatrists in 2017 experienced risk ratios of between 3.44 to 3.77 – i.e. black psychiatrists were generally approximately three and a half times (350% more) more likely than non-black psychiatrists to be guilty of FWA. For Medscheme, black anaesthetists in 2018 experienced risk ratios of between 6.39 and 6.78 – i.e. black anaesthetists were generally approximately six and a half times (650% more) more likely than non-black anaesthetists to be guilty of FWA.
'Much of the evidence placed before the Panel suggested that there may be systemic unfair discrimination in the implementation of the FWA systems by the Schemes. Systemic discrimination is an issue which has not been extensively addressed by our courts or administrative bodies.'
The Panel recommended that there be full algorithmic transparency.
'We explained that the full workings of the algorithm should be visible, transparent and accessible to both the people who use algorithms but also to the people who are affected by the algorithmic systems. Specifically, it is necessary that the inputs into, and construction of, the algorithm should be known.'