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JOINT MEDICAL HOLDINGS (PTY) LTD PRESENTATION TO SECTION 59 INVESTIGATION PANEL 25 SEPTEMBER 2019. JMH TEAM. J OINT MEDICAL HOLDINGS GROUP.
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JOINT MEDICAL HOLDINGS (PTY) LTD PRESENTATION TO SECTION 59 INVESTIGATION PANEL 25 SEPTEMBER 2019
JOINT MEDICAL HOLDINGS GROUP Joint Medical Holdings (Proprietary) Limited (JMH) owns 4 Acute Hospitals in the Durban and Isipingo precinct. Many of the Group’s facilities were established in the early 1980 ‘s by a small group of black Doctors who because of apartheid laws in place at the time had no place to consult, admit and manage their patients who were predominantly from the lower and middle income, black communities and not as an incentive for wealth creation. This patient profile remains the position to date. The JMH Doctor shareholding Company comprises of approximately 500 shareholders represented by individuals , companies and trusts almost 100 % of which are black owned.
ASCOT PARK HOSPITAL In June 2018, Management of the Hospital Group was approached by McDonald Marabo of the Medscheme Forensic Unit advising that they had been appointed by the various Schemes under the administration of Medscheme to carry out an investigation into the admitting patterns of Specialists at Ascot Park Hospital. He further advised that the Forensic Unit, based on their investigations to date, had taken a decision to place payments due to Ascot Park Hospital by the various medical aids under the administration of Medscheme on hold until such time as they could meet with Management to clarify the concerns they had identified through their investigations. This was followed by a formal letter dated 14 June 2018 noting the above.( FA5 in court papers.)
ASCOT PARK HOSPITAL A meeting was then facilitated between the Forensic Unit and the JMH team on the 4th and 5th July 2018 at which meeting, The Forensic Unit without providing case specific details of the allegations reiterated their concerns around admission patterns of some of the Doctors at Ascot Park Hospital.
ASCOT PARK HOSPITAL At the meeting on the 4th July, McDonald Marabo raised concerns around the admission process in the hospital as their investigation had shown many instances where patients are admitted into the facility but they could not pick up a record of the treating Doctor having consulted the patient prior to admission. They were concerned that patients were simply coming directly to reception without having been consulted by a Doctor and being admitted. I found that strange and explained to him that patients are only admitted into the hospital on referral from the Admitting Doctor who would generally issue an admission note made out to the Hospital . I then facilitated an interview with the Ascot Park Hospital Reception Supervisor who elaborated and confirmed the admission process. A few inpatient sample files were also presented . At the time we had requested that he provide details of the files under query so that Management could call up the files for those patients and present the evidence of the Admitting Doctors referral note. No further details were provided at the time .
ASCOT PARK HOSPITAL At the meeting on the 4th July McDonald Marabo also expressed concerns around the admission patterns of one of the Doctors practicing at Ascot Park Hospital. I advised that I could not comment on the admission patterns of the Doctor but would be glad to facilitate a meeting with him so that they could engage with him on their concerns. I accordingly facilitated the meeting for the next day and made available all off the said Doctors inpatient files so that they could go through same with him. He unfortunately chose not to go through the files but instead had a meeting with the Doctor privately to discuss their queries . After the close of our meeting on the 5th July I again reiterated by text message to McDonald my availability for the next day to discuss any further queries they had and for them to share the stats as I would like to understand the anomalies mentioned.
ASCOT PARK HOSPITAL With almost two weeks having past and no case specific details of the allegations having been shared with us , I wrote to McDonald Marabo on 17 July 2018 requesting an update.
ASCOT PARK HOSPITAL • On the 19 July 2018 the Forensic Unit issued a letter (FA8) placing the Hospital on notice in terms of Section 59 (3) on the Medical Schemes Act that based on their ongoing investigations they had some concerns in terms of inappropriate admissions at Ascot Park Hospital which were split into 2 main categories: • Hospital Length of Stay • Hospital accounts indicating costs of schedule medication during patient’s admission without any record of consultations by either the Family practitioner and or Specialist. • Healthcare provider visit only occurring on the third day of admission. • Patient being admitted for three days or longer without any procedure having been scheduled and /or • no records of consults by a Healthcare provider in Medscheme records. • The Hospital had been admitting psychiatric patients to Ascot Park Hospital despite not having a Psychiatric license.
ASCOT PARK HOSPITAL • High Care Beds • The Hospital had on occasion admitted patients to High Care in excess of the actual licensed beds for the specific category. • At this stage no case specific information had been provided to the Hospital to justify the concerns raised. The amount of R3.9 million that the Scheme proposed to claw back was based on an extrapolation calculated at 20% of value of amounts paid to the Hospital for the period January 2017 to May 2018.
ASCOT PARK HOSPITAL Based on the limited information available Management provided a very brief response to the Scheme and again requested for the case specific information so that it could investigate the matters and respond. (A copy of the letter is included in the Court papers marked FA9.)
ASCOT PARK HOSPITAL A schedule listing a sample of cases identified as inappropriate admissions by Medscheme Forensics was then submitted to JMH on 1 August 2018. Management then engaged in a series of communications with Medscheme Forensics to provide explanations on a case by case basis on the schedule provided. Copies of correspondence was included in the court papers pack. (FA9 to FA14)
ASCOT PARK HOSPITAL Management had in the communications to the Forensic Unit advised that the feedback provided relating to the queries on the admission patterns and Length of stay was a brief summary extracted from the Hospital records and that the decision to admit a patient into Hospital and length of stay during admission is based on the clinical assessment of the Admitting Doctor and not the Hospital and that should the Forensic Unit still be unhappy with the responses provided by the Hospital Management, the Hospital was happy to facilitate a meeting with each of the admitting Doctors in question to provide a more detail clinical response. Despite the request, on the 3 September 2018, the Forensic Unit took a decision to conclude their investigation and advised that they were in accordance with Section 59 of the Medical Schemes act, going to claw back an amount of R 3.9 million from Ascot Park Hospital.
ASCOT PARK HOSPITAL On the 7 September 2018, the Hospital provided further update in an attempt to resolve the matter and at this stage reiterated the need to meet with the Doctors who admitted the patients in question into Hospital to discuss the clinical reasons for same. The request to meet was unfortunately not granted and the Forensic Unit communicated further on 2 October 2018 to justify their stance on the matter and proceeded with claw back of the said amount from current payments at the time due to Ascot Park Hospital. ( FA15) By this time Hospital Management was of the view that the best way forward was to appoint an Independent Medical Practitioner to assist in the engagement with the Medscheme Forensics. A sit- down meeting was facilitated between Medscheme Forensics, the JMH Management team and a sub-committee of the JMH Board. The meeting was held on 14 November 2018 to discuss the Ascot Park Hospital matter together with new matters which had come to our attention relating to City Hospital which is detailed below. Unfortunately at the meeting of the 14th November 2018, the Forensic team again reiterated their concern around admission patterns and no case by case review was carried out.
ASCOT PARK HOSPITAL SUMMARY OF ISSUES IDENTIFIED AS REASONS FOR CLAW BACK AND JMH RESPONSE HOSPITAL LENGTH OF STAY: Medscheme Forensics could not pick up charges for consultations by referring GP or admitting Specialist on their system for initial referral or consult or for the first few days in hospital. This led them to conclude that these consults never took place and that these patients somehow came in and were admitted directly by the hospital: Doctors may in their discretion depending on the socio- economic circumstances of the patient decide not to charge a patient for outpatient consult. In the sample of cases provided many of the Doctors had charged the patient cash as patient had no outpatient benefits available. In some cases, as the Surgeon had initially managed the patient as a medical case and later needed to take the patient to theatre , he charged Medical Aid for the surgical procedure only, which took place on Day 3 or 4 of admission and not for Medical Consults during the first few days although he consulted the patient. The information pertaining to the initial consults by GP & Specialist was shared with the Medscheme Forensics. ( FA 12) They for some reason chose to ignore our invitation to meet with the Doctors and go through the files which had all of the information available. The fact that Medscheme Forensics could not pick up evidence of payment for the consultation on their system does not mean the consult did not occur or make the admission fraudulent.
ASCOT PARK HOSPITAL SUMMARY OF ISSUES IDENTIFIED AS REASONS FOR CLAW BACK AND JMH RESPONSE HOSPITAL LENGTH OF STAY: Patient being admitted for three days or longer without any procedure having been scheduled. The Hospital in the various correspondence circulated to Medscheme Forensics attempted to explain the reasons for the length of stay on sample cases provided . McDonald was also advised that it was the Doctor who makes the decision to admit and is responsible for the treatment plan and number of days in hospital and that he should ideally be engaging with the Doctors to get clarity on the reason for the so called extended length of stay. A point to note that on the City Hospital matter where we were presented a sample of 67 cases which were originally identified as inappropriate by Medscheme Forensics ,we were able to present clinical details on a case by case basis to the Medical Doctor who attended the meeting as part of the Medscheme Forensics team. The Medscheme Forensic team at the meeting acknowledged that in the cases reviewed that there was no evidence of fraud on the part of the hospital. Medscheme have however, without providing details subsequently advised that they made positive forensic findings in 21 % of the cases.
ASCOT PARK HOSPITAL SUMMARY OF ISSUES IDENTIFIED AS REASONS FOR CLAW BACK AND JMH RESPONSE HOSPITAL LENGTH OF STAY: Psychiatric patients being admitted at Ascot Park Hospital despite it not having a Psychiatric license. The normal process is that Psychiatric patients would be accommodated at City Hospital which has a license for Psychiatric beds. In the odd occasion where Psychiatric beds are not available , with authorisation from the scheme these patients are admitted for a limited stay at Ascot before being transferred out to a licensed facility. Medscheme have always been fully aware that the Hospital did not have a Psychiatric licence and have on the odd occasion provided authorisation to the Hospital to admit Psychiatric patients based on motivation from the admitting Doctor. ( FA13) In addition in certain cases based on motivation submitted by the Admitting Doctor the scheme extended the length of stay of the patient. How does this then make these admissions inappropriate or invalid ?
ASCOT PARK HOSPITAL SUMMARY OF ISSUES IDENTIFIED AS REASONS FOR CLAW BACK AND JMH RESPONSE HIGH CARE BEDS The Hospital facility was licensed for 1 High care bed and had on occasion admitted more than one patient to High Care. This is acknowledged as in circumstances where the 1 High Care bed is already occupied and there is a need for another patient to be admitted into a High Care Bed, then the patient is admitted into the ICU bed in the same ward and charged the appropriate High Care Tariff despite occupying a ICU bed. It does sometimes also occur that all beds in the High Care/ ICU Ward are occupied and that an inpatient either from the General Ward or from theatre complicates, the Hospital has no option in emergency circumstances to keep the patient in the adjoining ward and provide the necessary level of care to the patient. This is generally done when the patient is unstable and transferring the patient to another facility may result in the patients condition being compromised.
ASCOT PARK HOSPITAL We therefore believe, the claw back by the Scheme was inappropriate as the Forensic Unit had not provided the Hospital with any evidence of any fraudulent act or overcharge to the scheme for services rendered on the part of Ascot Park Hospital.
CITY HOSPITAL On 16 October 2018, JMH Management received correspondence from the Forensic Unit expressing concerns around the admitting patterns of 3 Doctor Directors of JMH. Medscheme stated these doctors had a higher rate of admission (70%) as compared to the ER Unit at City Hospital admission rate of 10%. Medscheme further stated that the ER Unit staff are considered independent service providers with no interest in the hospital and their admission decision is considered objective and purely based on clinical need. In addition, the Forensic Unit was concerned that these Directors were not complying with the Ethical Guidelines of the Health Professional Council of South Africa to declare their financial interest in the Hospital to their patients prior to admission into JMH facilities. Based on their investigations for the period January 2016 to June 2018 and the methodology used, they were of the opinion that an amount of R 17.3 million was considered as being inappropriate and possibly driven by “perverse incentives”.
CITY HOSPITAL The table below was included in the letter to indicate a 70% direct admission by the 3 doctors. Annexure B was provided which listed each case for the table below. On review of these files, many contained referral letters from GPs. The 70% was grossly overstated. Annexure A was also provided. This listed the 201 casualty consults sampled by Medscheme and the 21 cases claimed by Medscheme to be admissions from the ER unit. Once again their conclusion was incorrect. From the 21 cases we could not link any admission to the ER unit visit. In addition when a patient is admitted via the ER unit our system is unable to charge the 302 code, so there will be no ER unit billing linked to an admission.
CITY HOSPITAL On 6 November 2018 Management then provided a response to the Forensic Unit on the history of the JMH Doctor shareholding structure and the fact that the Directors were not incentivised and requested for a meeting to discuss the concerns of the Forensic Unit. On 8 November 2018 Management were advised that based on the investigations of the Forensic Unit, a decision had been taken by them to place the payments to City Hospital on hold with immediate effect. A meeting was then scheduled for 14 November 2018, at which meeting Management and members of the Board again tried to provide background in terms of Doctor shareholding structure and that the Doctors Directors in question were not driven by perverse incentives.
CITY HOSPITAL At the meeting the JMH team presented some context on the JMH Doctors Shareholding some of which is included in the introduction slide and in the court papers ( FA20 ) The Doctors in question consulted from rooms close to the Hospital which they themselves purchased. Most patients accessing healthcare services in the central Durban precinct were from the lower and middle income communities who relied on public transport and found the Doctors rooms and Hospitals in the area easily accessible due to the proximity around major bus, train and taxi routes. Hence the reason for admission by the Doctors to the Hospital facilities in the central city precinct being City Hospital and Durdoc Hospital. One of the Doctor Directors mentioned in their Claim letter of 16 October 2018 also has rooms and consults from a Hospital which belongs to a JSE listed company which facility is approximately 5 kms away from City Hospital and consequently most patients consulted at that facility are accordingly admitted to those facilities. He is coincidentally also a shareholder in that JSE listed company and the issue of declaration of Financial interest has not been raised regarding his patients admitted at that facility. Unfortunately, none of the explanations provided were acceptable to the Forensic Unit.
CITY HOSPITAL The head of the Forensic Unit, McDonald Marabo, at the meeting on 14 November 2018 with Management and the JMH Board advised that they had also carried out audits on other Hospitals within the JMH group and had similar concerns at those facilities and intended to proceed with the audit and claw back at those facilities as well. He advised that they would rather prefer that the group acknowledge the inappropriate admission patterns at its facilities and settle the matter. The settlement amount proposed by McDonald Marabo was R 17.3 million. He further advised that should the group agree to settle the matter at the R 17.3 million, Medscheme Forensics would consider this as a settlement in lieu of the entire group and cease its further investigations into the other Hospitals in the JMH group. At this stage the Forensic Unit had not yet provided details of the specific patient admissions that they believed were inappropriate and perversely incentivised by financial interest of Doctors nor had they provided a proper basis and rationale of calculation in terms of the amount they had intended to claw back. This in the view of JMH borders on extortion by Medscheme Forensics.
CITY HOSPITAL On the issue of Doctor shareholding it must be noted that although the hospitals were established by a group of Doctors, the single majority shareholder holding 51 % is now an equity investor with a large portion of the balance of shareholding being held by trusts and companies with no practicing Doctors having a direct or indirect interest. Admitting Doctors currently hold approximately 15 % of total shareholding with no single Doctor holding more than 2%.
CITY HOSPITAL As Management and the JMH Board viewed this as an attempt to extort a settlement by the Forensic Unit, a decision was taken to obtain legal advice on the matter and based on the advice received, as a last resort proceeded with a claim via the high court against the schemes to recover the amounts clawed back from Ascot Park Hospital and for payments due to City Hospital placed on hold since November 2018. The high court matter is still pending, and we are awaiting a date for the matter to be heard. A copy of our court papers has been lodged to the Section 59 Investigation panel and can be made available should the panel so require.
Medscheme have continued to hold back payments to City Hospital since November 2018 and to date payments due to City Hospital are now in excess of R 58 million almost 3.5 times the amount Medscheme Forensics originally claimed as inappropriate admissions into the Hospital.
We had on request by the Medscheme Forensic Unit facilitated a meeting with them on the 15 and 16 August 2019 in an attempt to resolve the matter in an amicable manner out of court. We had been provided with two schedules listing a sample of 67 cases, which the Forensic Unit believed were inappropriate admissions, prior to the meeting. At the meeting we provided what we believed as adequate feedback to them on a case by case basis. It did emerge that some of the queries raised resulted from a lack of adequate administrative information being submitted by the Case Management and Coding Teams regarding the clinical condition of the patients whilst in hospital. However, at no stage during the meeting did the Forensic Unit provide any evidence where the Hospital had acted in a fraudulent manner or incorrectly charged for services rendered.
Medscheme Forensics at the meeting advised that they had some concerns around the adequacy of admission criteria applied by the Outpatient Department and that the inadequacy of such processes were resulting in loss to the schemes. (This is in contradiction to their original statement by Medscheme when they compared the 3 Director Doctors with the ER unit which was the original basis by Medscheme Forensics to hold back payments ( Court papers :FA17) They requested that JMH in consideration thereof make a settlement proposal for wasted costs incurred by the schemes. The scheme at this stage had not provided any calculation of amounts it believed it was now entitled to.
In lieu of the fact that the withholding of payments and legal process are causing undue strain on our business, we had on 27 August 2019 on a without prejudice basis, without admission of any wrong doing and strictly on a commercial basis submitted a proposal to accept a settlement discount of R 500 000 on the matter subject to all the claims for Ascot Park Hospital and City Hospital being settled. The Forensic Unit has in response on 2 September 2019 declined our offer advising that although many of their queries raised were responded to, that after having reviewed the patient files they had made positive forensic findings on 21% of the files and accordingly proposed a final settlement of R 5.8 million payable by City Hospital, failing which the intention is for the Schemes to stop granting any further pre-authorisation to the medical scheme beneficiaries other than medical emergencies. At this stage the scheme has despite our request not shared the case specific information on which they made positive forensic findings and how they calculated their settlement proposal.
In an attempt to resolve the matter, we made a without prejudice counter proposal of R 3 million on 5 September 2019 on behalf of all hospitals within the JMH group together with JMH action plan to address the areas of concern highlighted by the scheme that the Medscheme Forensics believed were resulting in losses to the schemes. Medscheme Forensics have now on the 13th September 2019 advised that the offer does not adequately compensate them for the financial losses allegedly incurred and have accordingly declined the offer. They have further advised that the attorneys of the various schemes will accordingly be proceeding on the High Court matter.
