Fraud vs Waste and Abuse

The Council for Medical Schemes (CMS) recently hosted its inaugural fraud, waste and abuse summit this week, exploring how unethical and sometimes illegal claims place a major burden on the private healthcare sector in the country.

According to the CMS, fraud, abuse and waste in private healthcare is costing this sector between R22 billion and R28 billion every year, with up to 25% of the all premiums paid by medical scheme members, who are effectively funding these false claims.

What is the difference between fraud vs waste and abuse?

According to the CMS, not all cases of wasted spend in the private health industry are necessarily illegal or tied to fraud. A lot of the time, it comes down to misrepresentation that can result from billing errors, inefficient diagnostic testing, negligent coding, improper training, administrative confusion, unintentional duplication of claims and a whole range of other causes.

The difference between fraud and abuse is therefore the intent behind the misrepresentation that lead to overpayment, the CMS said. However, no matter how the bad claims are defined, their impact remains the same.

Because waste and abuse is not criminal (and thus lacks any appropriate procedures) and is difficult to define, the CMS wants the private healthcare industry to adopt standardised definitions:

  • Fraud: Knowingly submitting, or causing to be submitted, false claims or an intentional misrepresentation of the facts in order to access payment of a benefit to which you would otherwise not have been entitled.
  • Waste and Abuse: The claiming for healthcare treatment and services that are not absolutely medically necessary, including any form of over-servicing or over-charging of a patient, and that may objectively be considered unethical or unconscionable or contrary to best practice principles.


If you suspect that a service provider, colleague or any other person or organisation may be engaged in fraudulent activities against the Scheme, please contact the Fraud Hotline on 0800 112 811. This hotline is managed by an independent company, Tip-Offs Anonymous, and you can choose to remain anonymous. You can also email to report your suspicions.