The Board of Healthcare Funders (BHF) has commissioned a study that will expose wrongdoing among its members who could be exploiting consumers.
The study, which will be tabled on the second day of the BHF’s 2013 conference today (Monday Aug19), was commissioned to find out how medical schemes managed to jump from a R459.6 million deficit in the 2010/11 financial year to a surplus of R1 billion in 2011/12 at a time when most of them complained about escalated prescribed minimum benefits (PMBs) claims and costs.
In addition to the R1bn surplus, medical schemes received another R3.4bn in investments and other income. In total, they had a final surplus of R4.3bn.
Since the North Gauteng High Court threw out BHF’s case opposing the “pay in full” clause in the PMB regulation, medical aid schemes have reported an increase in PMB claims. The increase had put their financial standings at risk as “paying in full” meant they had to foot the bill for whatever price a healthcare provider charged since their prices are not regulated.
The BHF managing director, Dr Humphrey Zokufa, said with these increased claims’ costs, it remained a mystery how medical aid schemes managed to accumulate surpluses.
He said the BHF saw it necessary to investigate if schemes were subjecting members to higher co-payments, if they were refusing to pay legitimate claims, or if they were shrinking members’ benefits in the chase to accumulate surpluses.
“If that’s what they are doing, then our argument that schemes are at risk because of Regulation 8 fall by the wayside. If the study really finds shrinkage of benefits, it will be a bad reflection on the industry,” he said.
Zokufa said even though there was a risk of reputational damage to medical schemes if the study, which was carried out by the Health Monitor Company, confirmed that medical schemes were exploiting their members, the BHF, as a representative body, had to be the one to bring this to light. “We can’t sit and do nothing about it because the fragmentation of healthcare in South Africa is costing the patient,” Zokufa added.
In its 2012 annual report, the Council for Medical Schemes (CMS) said the R1bn surplus was largely due to the fact that medical schemes had a lower claims ratio in 2011. The industry’s claims ratio decreased to 86.5 percent in 2011 from 87.3 percent in 2010. The CMS is due to release the 2012/13 figures in a couple of weeks.
Zokufa said all their members have reported that they were “bleeding” because of PMB claims and suspected that service providers were registering non-PMB conditions as PMBs so that they would have a blank check.
He said the BHF was still investigating the sudden surge in PMB claims.
At the 2012 BHF conference, the Minister of Health, Aaron Motsoaledi asked the Parliamentary portfolio committee on health to close the gaps in Regulation 8 of the Medical Schemes Act which deals with PMBs.
The medical schemes’ registrar and the chief executive of the CMS, Dr Monwabisi Gantsho, has however, said that in the Medical Schemes Amendment Bill, the definition and interpretation of “pay in full” had been addressed.