Medical scheme members are often baffled by the decisions made by their schemes. But there is usually a reason for a decision, and understanding the rules of your medical scheme can help you to accept the decision and plan your healthcare budget accordingly.

Many scheme members ask why they cannot limit their contributions to their medical savings accounts.

Mr D, a member of a large open medical scheme, says he is not being paid interest on the balance in his savings account. The balance exceeds R40000.

He says he was advised that, while the balance is earning interest, the transaction fees equal the interest and so, in effect, the balance will neither increase nor decrease.

Mr D would like to limit the balance to a lower amount, but he has been advised that the scheme will not allow this.

Schemes are obliged by law to keep the contributions to your medical savings account in a bank account separate from the scheme and they are obliged to pay interest on a positive balance, Elsabe Conradie, the spokesperson for the Council for Medical Schemes, says.

Your scheme may deduct from the interest, any bank charges and investment fees incurred before it allocates the net interest to your account.

The Council for Medical Schemes, which regulates schemes in terms of the Medical Schemes Act, instructed schemes to operate accounts in this way some four years ago after the council obtained legal guidance on the interpretation of a High Court judgment concerning medical savings accounts. The 2007 judgment concerned Omnihealth, a scheme that ran into financial difficulty in 2005. The High Court confirmed that the funds in your medical savings account belong to you, not your scheme, and they should be paid to you if your scheme goes into liquidation. The funds should not be regarded as an asset of the scheme.

The fees your scheme can deduct from the interest you earn on a positive balance include the cost of lending you the contributions that you have yet to make for the rest of the year. You have a right to be informed of the interest and the costs, Conradie says.

Conradie says the interest paid and the transaction costs are governed by the rules of the scheme, which should be available to you, the member.

If you have accumulated a large balance in your account, you cannot ask your scheme to suspend your contributions temporarily. Medical scheme options are governed by the scheme’s rules, which specify how much you must contribute to your savings account.

More than a decade ago, schemes were allowed to offer members who belonged to the same option a choice of savings account contribution levels. The council put a stop to this practice, and schemes are now obliged to set a single savings account contribution level for all members on the same option.

The only way to stop paying contributions to a medical savings account is to move to an option that does not have such an account. However, you should first find out the implications of changing options, which could include lower reimbursement rates for in-hospital doctors, or lower cancer benefits.

Broken limbs

You may assume that your scheme’s benefits cover treating a broken limb, but there could be times when they will not. And there could be times when your scheme should pay a claim as a prescribed minimum benefit (PMB) but won’t unless you query why it wasn’t paid as a PMB . This is the lesson in the case of the child of Mrs P, a member of a large open scheme, who fell and fractured a bone in her arm at the start of a public holiday weekend.

The child was taken to the casualty section of a nearby hospital, and the arm was put in a temporary cast. After the public holiday weekend, the child saw an orthopaedic surgeon, who said the fracture needed to be manipulated under anaesthetic before a permanent cast could be put on. The account for the casualty consultation and the X-ray was settled using the money in Mrs P’s medical savings account, while the scheme paid the orthopaedic surgeon and the hospital.

Medical schemes are obliged by law to pay for the diagnosis, treatment and care of conditions covered by the PMBs.

The PMBs include cover for the “deduction or relocation” of “open” or “closed” fractures and dislocations of limb bones, as well as the medical and surgical management of “open” fractures and dislocations. They also include cover for all medical emergencies.

Conradie says the fracture of a limb is an emergency and is covered by the PMBs, and so the scheme should have paid all the bills related to the fracture.

But Dr Jonathan Broomberg, the chief executive of Discovery Health, the administrator of the country's largest open medical scheme Discovery Health Medical Scheme, says the Medical Schemes Act defines an emergency as a limb- or life-threatening event, while the Council for Medical Schemes defines it as the sudden and, at the time, unexpected onset of a health condition that requires immediate medical or surgical treatment, where failure to provide such treatment would result is serious impairment of bodily functions, or serious dysfunction of a bodily organ or part, or would place the person’s life in serious jeopardy. Therefore, Broomberg says, an uncomplicated fracture does not automatically fall within the definition of a PMB emergency. Some fractures would, whereas others would not, he says.

When Mrs P queried the account with her scheme, she was asked to resubmit the claim and include a PMB form that had been completed with the help of her doctor.

Mrs P is puzzled as to why the scheme could not determine from the treatment by the orthopaedic surgeon that her daughter had broken a bone that required treatment and, therefore, that the visit to casualty should have been covered by the PMBs.

Broomberg says any of more than 10000 diagnostic codes could be attributed to a PMB diagnosis. In many cases, a scheme does not receive adequate information about a claim to determine whether or not the claim should be paid based on the PMB rules. In many of these cases, it is necessary to obtain additional information from the treating doctor. This was acknowledged when medical scheme stakeholders drew up a code of conduct regarding the PMBs, he says.

Claims are often processed quickly before further claims come in. In Mrs P’s case, the claim for the treatment in casualty was processed before the scheme’s administrator received the hospital and orthopaedic surgeon’s claims.

Broomberg says scheme administrators do not have the ability to link claims, and it would not be prudent for them to pay every claim that could be a PMB before establishing that all of them are indeed PMB claims.

He says that, in addition to requiring further information to confirm whether or not a claim is a PMB, schemes require information about the treatment that was provided, and to allocate a basket of care to be funded. This applies to most out-of-hospital PMBs conditions, but it does not usually apply to chronic conditions, where you are typically expected to register with your scheme once and thereafter your claims are paid automatically.