How Smartchoice Tackles Healthcare Fraud in South Africa

Discover how Smartchoice Technology helps medical schemes prevent fraud, waste and abuse using AI, analytics, and collaboration with health leaders.

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A Technology-Driven Path to Integrity

At Smartchoice Technology, we believe that healthcare systems should work for the people they serve—transparent, efficient, and accountable. Yet across South Africa, billions of rand are quietly drained each year through fraud, waste and abuse (FWA)—robbing members of value and placing unsustainable pressure on medical schemes and public health budgets alike.




The problem is pervasive, sophisticated, and, until recently, often hidden in plain sight.




From inflated claims and card farming to syndicate fraud using fake provider identities, the faces of FWA are many. And while these aren’t new issues, the last five years have marked a significant shift in how our industry responds. Armed with smarter data, tighter governance, and cross-sector collaboration, South African healthcare is finally taking a stand.




Understanding the Scope: Why FWA Matters

Recent estimates suggest that FWA costs the private sector alone between R22 billion and R28 billion every year—that’s about 15% of total claims. These are not just numbers; they represent wasted resources that could have gone to patient care, lower premiums, or improved access. For the public sector, the costs are just as steep, with procurement fraud and inflated medico-legal claims siphoning critical funds away from clinics and hospitals.




As Smartchoice continues to partner with healthcare funders, providers, and administrators, we see first-hand how technology can serve as a powerful force for change. But it starts with recognising what we’re up against.




The Many Faces of FWA

Fraud in healthcare can be as simple as billing for a service that was never delivered, or as complex as organised syndicates using the stolen identities of real doctors to submit thousands of false claims.




Other common types include:



• Over-servicing: Excessive tests or treatments purely to inflate invoices.
• Card farming: Scheme members handing over their details so others can access services fraudulently.
• Collusion: Providers and members working together to ‘ATM’ the system and split illicit payouts.



These acts may seem opportunistic on the surface, but over time they erode the trust and solvency of entire schemes.




“Fraud, waste and abuse is the scourge that continues to plague the private healthcare industry and overall health system at large. We need to debunk the myth that FWA is a victimless crime – the victims who are paying the ultimate price for the prevalence of such malfeasance are the beneficiaries who not only have to put up with exorbitant increases in contributions but are also deprived of other value added services.”

Dr Katlego Mothudi, Managing Director, Board of Healthcare Funders (BHF)

The Fightback: Where Technology Meets Accountability

So, what’s being done? Quite a lot—and the private sector is leading much of it.




Organisations like Discovery Health and Universal Healthcare have developed sophisticated fraud detection systems. But this is no longer just about spreadsheets and audits. We’re seeing a new generation of AI-powered algorithms and predictive models that can flag suspicious behaviour in real time—before the money goes out the door.




At Smartchoice, we’re proud to be part of this movement. Our platforms integrate seamlessly with claims systems, allowing for early anomaly detection, contextual provider profiling, and instant member alerts. This isn't just about identifying fraud after the fact—it’s about building a preventative architecture into the very core of claims and benefit administration.




A Culture of Collaboration and Transparency

Technology alone won’t win the battle against FWA. What we’re witnessing now is a cultural shift: medical schemes, industry bodies, and regulators coming together with a shared mandate—protect the integrity of healthcare.




The Board of Healthcare Funders (BHF) has been instrumental here, through its Healthcare Forensic Management Unit (HFMU), which serves as a central hub for fraud intelligence. The creation of a shared fraud database allows schemes to track serial offenders, and their annual FWA Indabas provide a platform for learning, coordination and action across borders.




One of the most impactful developments is the Code of Good Practice on FWA, drafted in collaboration with the Council for Medical Schemes (CMS) and key industry associations. It outlines fair procedures, non-discriminatory investigations, and clear accountability for all stakeholders. It’s a framework that Smartchoice supports and mirrors in our own platform designs.




Case Studies That Speak Volumes



• A syndicate operating across several provinces used false credentials to submit audiology claims worth millions. Data analytics caught the pattern—and forensic audits sealed the case.
• A single family was found to have undergone dozens of dental procedures in a few weeks. An alert system flagged the excess usage, revealing that the member’s card had been shared with relatives.
• A whistleblower exposed an inflated PPE procurement contract in a public hospital—saving taxpayers millions and reminding us why internal reporting systems are so critical.



Smartchoice’s Role in Strengthening the System

Our commitment is clear: to help our partners operate ethically, efficiently, and transparently. Fraud isn’t just a cost line—it’s a structural risk to the future of healthcare. By embedding fraud prevention tools into the Smartchoice ecosystem, we enable schemes to move from reactive to proactive, from firefighting to forecasting.




Our technology works in tandem with people: empowering administrators to act faster, giving members visibility into their usage, and supporting regulators with real-time reporting.




Looking Ahead: Trust Is Our Greatest Asset

As South Africa transitions toward National Health Insurance (NHI), the spotlight on financial governance and fraud prevention will only intensify. The NHI Bill itself proposes a dedicated anti-fraud unit within the fund—a recognition that trust in the system is non-negotiable.




At Smartchoice Technology, we believe this trust starts with clarity, continues with collaboration, and thrives with innovation.




We invite you to join us in building a healthcare system that works for everyone—not just on paper, but in practice.