Psemas mess laid bare

The Finance Ministry was advised as far back as 2010 to urgently appoint a board of trustees to manage the government medical aid fund, but has done nothing.

20 March 2017 | Government


The Public Service Employees Medical Aid Scheme (Psemas) has made headlines since January, with accounts of massive fraudulent claims by local and foreign doctors, pharmacies and clinics, as well as the fact that roughly N$180 million is owed to service providers which the scheme cannot pay.

However, a report in possession of Namibian Sun indicates that the finance ministry knew as far back as April 2010 that there were major gaps in the fraud management system regarding claims managed by the fund administrator, Methealth. It had also received a list of suspect doctors, clinics and pharmacies that had submitted questionable and false claims, along with risk analyses. The ministry was also advised to urgently appoint a board of trustees to manage the fund effectively.

However, in the same year, Methealth Administrators was awarded a new five-year tender to continue administering the medical aid scheme and doing the claims processing and payouts. That tender has since been extended annually. Methealth has been administrating Psemas since a merger with NamHealth in September 2003.

The 2010 report, in excess of 100 pages with spreadsheets, graphs, statistics and a detailed list of service providers under investigation, appears to have been ignored.

Commissioned by the finance ministry in October 2008, South African-based Savvy Solutions was appointed as independent consultants to Psemas to “focus on forensic audit investigations aimed at identifying and curbing irregular claims activities within the scheme to reduce costs and financial losses from fraud.” They inspected Psemas services providers for the period 2007 to 2009.

It makes for bizarre reading.

A doctor in Rundu had issued 391 prescriptions for the drug Pegasys, a potent drug that treats Hepatitis B and C. His total Psemas claim for this drug was N$1 292 603.48 and he was paid out N$1 185 603.02. When the investigators compared the dosage to the need for the drug, it was found that he had prescribed more Pegasys than was needed on the entire African continent.

Celestone too, is a very popular medication. It is a steroid that is used for a number of diseases including rheumatic disorders such as rheumatoid arthritis and systemic lupus erythematosus, among others.

The report indicates that 66 894 prescriptions were issued for this medicine. The numbers speak for themselves when compared to the number for scripts for the rest of SADC, which in the same period totalled 64 632. In the case of Pegasys, a total of 1 205 scripts were issued in Namibia and in the rest of SADC, a mere 20. The costs run into millions of dollars.

“Pegasys and Celestone are both over- and incorrectly prescribed. A simple comparison to SADC reveals that Psemas has overpaid by in excess of N$10 million just for these two medicines,” the report states.

The Savvy Solutions investigators found that “the scheme appears to have limited internal controls and coherent risk management mechanisms at various levels.”

They specifically highlighted an alleged lack of control at Methealth Administrators and the absence of a board of trustees for the medical aid scheme.

“Apart from the required accountability, Psemas’s current governance structure appears inadequate to meet increasing challenges and risks faced by the scheme.

“This includes the absence of key management structures in the form of a board of trustees with active board committees or any other clearly defined structures that could provide ongoing strategic management of the scheme.

“A typical medical aid scheme is governed by a strong board of trustees with specialist technical committees … and the key areas where board committees play a crucial role to mitigate risks.”

The report states that there were no protocols with regard to special authorisations, no tariff guidelines on some benefits, including transport and an inconsistent application of the rules.

“Some doctors claimed for procedures they could not possibly have performed and one doctor received a payout of N$3 million for medication prescribed although records indicate that he only had the value of N$140 000 in stock,” the report states.

That was seven years ago and the situation has only deteriorated. By all accounts, the report was shelved in 2010 and no action was taken.

Dave van Heerden at Savvy Solutions would not comment, saying the investigation and its results were confidential.

“I cannot comment but, I can confirm that is our report and I stand by our findings,” he said.

At the time of Savvy Solutions’ report, Prime Minister Saara Kuugongelwa-Amadhila was the minister of finance and the current permanent secretary, Ericah Shafuda, was already in that position.

In 2011, Insight Namibia asked questions about the re-awarding of the Psemas tender to Methealth in view of the fact that the then finance minister’s brother, Tylvis Kuugongelwa, owned a 20% share in Methealth through Bombax (Pty) Limited. While reports indicated that the tender procedure had been above board, new questions have now arisen due to the finance ministry’s inaction since that time.

Telephone calls to Shafuda remained unanswered.

Similar News


Over N$50m for Zim 'experts'

5 days ago - 16 August 2017 | Government

For a cash-strapped country which has now crossed the threshold to junk status – albeit challenged – Namibia is prepared to pay exorbitant amounts for...

No word on economic advisory council

1 week ago - 11 August 2017 | Government

The Presidency said it will only announce the composition of a new Presidential Economic Advisory Council when it is ready to do so.This is according...

Confusion over Zim professionals

1 week ago - 10 August 2017 | Government

OGONE TLHAGE The president of the Namibia Council of Architects and Quantity Surveyors, Kevin McNamara, has defended a decision to...

No rift between Geingob, Malima - Govt

1 week ago - 10 August 2017 | Government

The government has dismissed reports that there is simmering tension between President Hage Geingob and the director-general of the Namibia Central Intelligence Service, Phillemon Malima,...

Easy ride for Zim architects, quantity surveyors

2 weeks ago - 07 August 2017 | Government

A decision to grant 29 Zimbabwean architects and quantity surveyors exemption from professional competence examinations has been met with outrage.Works and transport minister Alpheus !Naruseb...

Premier eager to finalise NEEEF

2 weeks ago - 07 August 2017 | Government

Prime minister Saara-Kuugongelwa-Amadhila is eager to get the ball rolling as far as the implementation of the National Equitable Economic Empowerment Framework is concerned. ...

Call for calm ahead of land conference

2 weeks ago - 07 August 2017 | Government

OGONE TLHAGE Prime minister Saara Kuugongelwa-Amadhila has asked for cool heads to prevail ahead of the long-anticipated national land conference...

Wildlife Bill values human life less - NC

2 weeks ago - 07 August 2017 | Government

The Controlled Wildlife Products and Trade Amendment Bill places more value on wildlife than human life through the increase of fines, said majority of the...

Shortcuts lead to corruption – deputy PM

2 weeks ago - 07 August 2017 | Government

Deputy prime minister Netumbo Nandi-Ndaitwah says business people who seek to be successful by taking shortcuts end up being corrupt. Nandi-Ndaitwah was speaking at...

Tweya mum on NBCbailout

2 weeks ago - 03 August 2017 | Government

Information and communication minister Tjekero Tweya could not be drawn into commenting on the Namibian Broadcasting Corporation's finances during an information-sharing session held at State...

Latest News

Aandonga 'confused' by leadership dispute

12 hours ago | Cultural

Ondonga community members say they are confused about the ongoing leadership battle within the traditional authority. This was one of the concerns that came...

Ondangwa gambler robbed of N$60...

12 hours ago | Crime

OGONE TLHAGE A man was robbed of N$60 000 by two men at a bar in Ondangwa last week.The victim...

Panga killer gets 25 years

12 hours ago | Justice

The Oshakati High Court last week sentenced Ndilinawa Gabriel to 25 years in prison after he was found guilty of murder.Gabriel (29) was convicted of...

Infighting plagues NUNW

12 hours ago | Labour

The National Union of Namibian Workers this weekend removed its president, Ismael Kasuto, in what it says was a properly constituted meeting. The removal...

Bail system needs review

12 hours ago | Justice

The minister of environment and tourism, Pohamba Shifeta, has called for a review of the granting of bail by Namibian courts. This follows the...

Beaten to death for a...

12 hours ago | Crime

Two suspects have been arrested in connection with the murder of Manfred Karl Hartmann (78) in Swakopmund on Friday. Hartmann was beaten to...

Bank Windhoek - Always ready...

12 hours ago | Youth

An initiative such as the Hashtag Festival always is a good fit for Bank Windhoek, which is always prepared to support local sport and...

Swapo seeks experienced top four

12 hours ago | Politics

Anybody aspiring to be a candidate for election as Swapo president and vice-president must have been a party member for at least 30 years, of...

The rise and fall of...

12 hours ago | Opinion

The battle for control of the Rally for Democracy and Progress (RDP) has intensified after a faction led by the party's vice-president Steve Bezuidenhout recently...

Load More