Probe finds evidence of racial bias against black healthcare providers by South Africa's medical schemes

IOL News

07-07-2025

Health Minister Dr Aaron Motsoaledi has received the long-awaited report which confirmed allegations of racial discrimination and unfair practices by some of South Africa's leading medical schemes against Black healthcare practitioners.
Image: Oupa Mokoena / Independent Newspapers
The Board of Healthcare Funders (BHF) has firmly rejected the long-awaited Section 59 report, which on Monday found positive and glaring alleged racial bias and discrimination by medical health schemes against black health professionals.
Presented by panel chair Advocate Tembeka Ngcukaitobi, the report found systemic procedural unfairness and a deeply entrenched power imbalance that over the years has disproportionately and negatively impacted black medical professionals.
The inquiry commissioned by the Council for Medical Schemes (CMS), launched in 2019, scrutinised practices by medical aid 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.
On Monday, Minister of Health Dr. Aaron Motsoaledi, made the report public after receiving the investigation report on the findings of the inquiry conducted by the Section 59 Investigation Panel into allegations of racial discrimination by medical schemes.
The inquiry was launched after doctors and other practitioners accused medical aid administrators of unfairly targeting them with audits, delaying payments or terminating contracts without clear justification.
This comes after some black healthcare providers and members of Solutionist Thinkers and the NHCPA (National Health Care Professionals Association), in 2019, made allegations that they were being treated unfairly by schemes and administrators, based on race and ethnicity.
The written submissions alleged that the schemes were intimidating and bullying providers through the implementation of their FWA systems (used by schemes and administrators to detect, investigate and determine providers), including by refusing to reimburse providers directly and coercing them into agreeing to acknowledgment of debt (AODs).
The schemes were alleged to be treating providers unfairly and in particular were alleged to be targeting black providers. The NHCPA explained that it had anecdotal evidence that the schemes' forensic audit process was more prevalent among black providers and pointed out that the panel could obtain empirical information through its investigation.
The report's statistical risk ratios developed during the investigation found that black practitioners were significantly more likely to be flagged, investigated, and penalised compared to their white counterparts.
It found that in 2014 at GEMS black dental therapists were up to 3 times more likely to be flagged, while for Discovery in 2017, the report found that black psychiatrists were 3.5 times more likely.
For Medscheme in 2018, the report suggests that black anesthetists were 6.5 times more likely to be found guilty of fraud, waste, and abuse (FWA).
"Let me repeat this, we were not a court, we did not adjudicate individual complaints, we did not run a trial and make findings about unfair discrimination in terms of Section 9 or the Pepuda Act, we only considered the facts and the facts lead us to one conclusion that the evidence of the risk ratios before us showed racial discrimination to black service providers by the schemes.
"These risk ratios are not scientific certainties, but they are highly probable indicators of discrimination," Ngcukaitobi added.
While still studying the report, the BHF, a nonprofit company representing medical schemes and administrators, said it firmly rejects the findings of the final Section 59 investigation.
"We still need to study the final report; however, we are disappointed that the Section 59 Inquiry panel has confirmed that it has upheld the findings made in the interim report released in 2021. We believe these findings are demonstrably and fundamentally flawed and, if allowed to stand, will open the door for runaway fraud and corruption in the healthcare sector," it said.
On alleged fraudulent claims, the BHF stated: "Fraudulent claims, over-servicing, abuse of benefits, and improper billing practices cost South Africa's medical schemes around R30 billion each year. These losses directly impact the contributions and benefits of 9.7 million scheme members, the majority of whom come from historically disadvantaged communities. Fraud, waste, and abuse (FWA) inflate healthcare costs, reduce member benefits, and drive up premiums, placing disproportionate financial strain on working-class families."
The issues the BHF raised with the panel's methodology included: Unscientific methods to assign race, using surnames to categorise providers;
Failing to account for exposure bias, which occurs when a group is more likely to be involved in a process or activity simply because of greater contact or interaction; and
Confusing correlation with causation, by assuming discrimination without 'rigorously considering other relevant variables such as provider billing patterns, patient load, or socioeconomic contexts'.
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