News | Medico-legal Affairs
Medico-legal claims against South Africa's Department of Health: What we know so far
Time to read: 06:02 mins
Time to listen: 08:55 mins
Type of article: News
MedED Catalogue Reference: MNG0046
Category: News
Category Cross-reference: Medico-legal Affairs, Public Health
Keywords: Medico-legal, fraud, SIU, NPA, DoH
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16 September 2024,
Contributor: Linda Ravenhill, Editor
Earlier this month, we reported on the growing issue of fraudulent medico-legal claims filed against South Africa's Department of Health (DoH).
At a joint press conference held by the DoH and the Special Investigating Unit (SIU) on August 24th, it was revealed that a staggering R100 billion in claims were made against the DoH between 2015 and 2020. Of these, more than R30 billion is currently under investigation by the SIU. The scale of these claims has significantly impacted the department’s finances, with nearly half of the national health budget for the five years under investigation being used to settle legal claims.
During the press conference, the DoH and SIU announced their intention to crack down on fraudulent claims, giving legal practitioners who knowingly submitted fraudulent claims two weeks to withdraw them - with a promise of no consequences if they comply and a threat of severe action taken against them if they are found guilty.
There have been no further updates on this story so far, so while we wait for the next shoe to drop on the SIU investigations, it seemed like the perfect time to recap what we know so far.
A historic view of the situation
According to the National Treasury's 2020 Budget Review, despite some improvements in public hospital mortality rates, including a reduction in maternal mortality rates, from 2014 to 2018, contingent liabilities – which reflect potential future losses - increased at an average annual growth rate of 30%. Medio-legal claim payouts rose by 23% in the same period.
By 2018/2019, medico-legal contingent liabilities had reached R99.2 billion, with R2 billion in claim payments. In 2020/2021, the department paid out over R6.5 billion in medico-legal claims.
This meteoric rise in claims has been attributed to various factors, but the DoH seems to place the blame almost completely at the foot of the Road Accident Fund (RAF). During the August 24th press conference, the DoH explained that the culture of fraudulent claims was rife within the RAF litigation, but around 2015, as the RAF tightened its systems to curb these fraudulent schemes, litigators who had previously targeted the fund, according to Dr Mostoaledi, ‘".migrated en masse to the Healthcare Sector.”
South Africa is not alone in facing this surge in medico-legal claims.
In an article published in the South African Medical Journal in August 2023, Dr. Larisse Prinsen, Senior Lecture in the Faculty of Law at the University of the Free State, highlighted that regionally there has been a rapid escalation in medic-legal litigation, noting that 2015 Botswana saw more than 300 claims fields, while in Ghana, and Malawi “…..litigation for medicolegal issues has become so prevalent that this trend has been described as a ‘boom industry’.”
Figure 1: Medico-legal claims by Province for the period 2015-2020
Roll over the bar graph to view claim totals
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Created by the Medical Education Channel.Data Source: sagov.news /Health briefs media on SIU investigation into medico-legal claims
Where are all these claims coming from?
The increase in medico-legal claims in South Africa is linked to both individual clinical errors and systemic issues within the healthcare system.
Cerebral palsy claims account for approximately half of the current claim burden, and one may argue these are the most despicable fraud cases. Other causes include gross negligence, misdiagnosis and delayed treatment. However, the other side of the coin is the mismanagement of national and provincial budgets, which has resulted in systemic factors like outdated equipment, understaffing, and medication shortages, significantly hindering the healthcare system's ability to provide optimal care or care in general.
How our legal system contributes to this current situation
One contributing factor to our high medico-legal litigation burden is that in South Africa, medico-legal cases are adjudicated under common law.
Common law relies on legal precedent, which often creates legal uncertainty, as case outcomes depend on how courts interpret the precedents. This uncertainty, coupled with the underutilisation of mediation in South Africa, presents challenges for lawyers who want to do the right thing for their clients and creates loopholes for less scrupulous players to exploit the system.
Secondly, despite the introduction of Rule 41A in 2020, which encourages mediation before litigation, it is not commonly practised, and the rule is often unenforced. As a result, litigation is frequently the first course of action recommended by many legal practitioners, contributing to the growing number of medico-legal claims that end up in court.
Finally, the Contingency Fee Act 66 of 1997, which allows for "no win, no fee" arrangements, has further encouraged litigation. The Act means clients can avoid upfront legal costs, while lawyers can receive up to 25% of the payout if the case is won. This enables three practices: first, it makes it easier for patients to litigate as there is no requirement to pay hefty upfront fees to a lawyer; and second, it encourages malign actors to file inflated suits, with the promise of big payouts should they win and finally, it encourages unscrupulous litigators to draw out litigation as much as possible to incur higher fee payouts.
What can be done to fix the current situation?
Addressing the current wave of fraudulent claims and excessive litigation is crucial for freeing up the public healthcare budget to focus on its intended purpose—delivering healthcare to all South Africans. Without such reforms, it is difficult to see how the National Health Insurance (NHI) scheme could survive its first year, as it would inherit a financially drained department.
But, as Dr. Prinsen noted in her article, legislation alone cannot solve the challenges. Governance, management, budgeting, procurement, quality of care, issues surrounding human resources, training, and facility maintenance all impact how healthcare is delivered in this country. However, targeted legal reforms, including streamlined procedures, the establishment of relevant authorities, and revised compensation methods, could provide a pathway to improvement.
While the DoH and the SIU continue their efforts to reign in current claims and recoup monies from fraudulent claims, the South African Law Reform Commission has proposed a three-tiered strategy to address medico-legal claims which includes:
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Primary Prevention: Improving healthcare delivery through initiatives such as the National Core Standards and the Ideal Clinic initiative, focusing on clinical standards, infrastructure, human resources, and technology.
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Secondary Prevention: Strengthening administrative solutions, such as proper record-keeping and communication with patients, to resolve complaints before they escalate to legal action.
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Legal Reforms: Exploring legal solutions such as mediation, a review of contingency fees, staggered payments to claimants, and distinguishing valid from fraudulent claims. Additional legal training and the use of expert panels or specialist courts may also be considered.
This story was compiled with information obtained from a variety of sources including:
2nd August 2024 | sagov.za | Health briefs media on SIU investigation into medico-legal claims
August 2023 | SAMJ| Medicine and the Law: The leading causes of medico-legal claims and possible solutions April 2023 South African medical journal 113(4) 113(4) DOI:10.7196/SAMJ.2023.v113i4.134 LicenseCC BY-NC 4.0(PDF)
26 February 2014 | sanews.gov | Plans to curb medico-legal claims
SUPREME COURT ACT 59 OF 1959 UNIFORM RULES OF COURT [Updated to 12 April 2024]
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2 September 2024 | SIU Set to Strike: Minister Warns Fraudulent Lawyers in R30bn Medico-Legal Claims Probe
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