Medical schemes and their members cannot continue to pander to “ridiculous, unjustifiable tariffs” that healthcare providers are implementing, and they cannot wait for a solution to come out of the Competition Commission’s inquiry into private healthcare.
This is the view of the Board of Healthcare Funders (BHF), which represents medical schemes and their administrators. The BHF is seeking a way for schemes to publish guideline billing codes and tariffs for medical services and procedures.
The billing issue is on the agenda for the annual BHF conference at the end of July. The issue is also before the Competition Commission’s inquiry.
The BHF’s head of benefit and risk, Dr Rajesh Patel, says the current system is not working and the regulators of the healthcare and healthcare funding industries have not intervened to protect the public and members of medical schemes from out-of-pocket payments. Schemes cannot wait two to three years for a solution to come out of the inquiry, he says.
The South African Private Practitioners Forum (SAPPF), which represents medical specialists, has, however, made a submission to the inquiry recommending the establishment of a body to oversee the setting of appropriate billing codes, and according to its chief executive, Dr Chris Archer, the inquiry has asked for more information on this proposal.
In the meantime, Patel says doctors are making changes to their billing codes and are “unbundling” the codes, which, in effect, means that they are charging more for the same procedures or services.
Both the South African Medical Association (Sama) and the SAPPF have recently introduced new billing codes for medical procedures and services.
Patel says the new codes have resulted in procedures that previously had few codes now having multiple codes, and in some cases the number of units (see below) assigned to a particular code has been increased. This means that you or your scheme could be paying more for the same procedure.
Doctors use these billing codes, which are published in the Medical Doctors’ Coding Manual, to determine what to charge you. Each procedure or service is assigned a number of “relative value units” based on the work involved, the cost of doing business or running a practice and the risk of the practitioner facing a malpractice claim. Doctors apply their own fee per relative value unit, but the manual sets out the number of units for which they can charge per procedure.
Kevin Aron, the chief executive of medical scheme administrator Medscheme, says that most administrators have not accepted coding changes from Sama since 2011 because of the lack of transparency on coding guidelines and their alignment with a coding system developed by Harvard University and published by the American Medical Association, known as current procedural terminology (CPT).
Aron says the knock-on effect is that, as a member, you may face more out-of-pocket payments. Alternatively, especially in cases where you get pre-authorisation from your scheme yourself and are not able to give your scheme the correct code information, your scheme may give authorisation and later discover that you received services your benefits do not cover. Schemes then have to pay for the service or they deny payment, resulting in you facing an out-of-pocket payment.
Archer says doctors have used the American Medical Association’s CPT coding for some time, but where the American system contains multiple codes for a single procedure, with the diagnosis determining which one applies, South African doctors have used a single code for each procedure. This led to accusations that practitioners were choosing codes that resulted in the highest payments for them, Archer says.
Sama and the SAPPF have now decided that when medical disciplines need to make changes to their billing codes, they should use multiple codes in line with the American system.
Archer says the charges that result from these billing codes will, in future, be higher or lower, depending on the condition treated, but the overall financial impact should not be worse for consumers and schemes.
Patel says the BHF disagrees with this view, and believes that implementing the US coding system without its coding rules will push prices higher.
Archer says the codes that different medical disciplines adopt are subject to peer review, but a few disciplines are not co-operating.
Aron says some medical practitioners are using a hybrid of the US CPT coding and home-grown codes and rules to derive maximum benefit.
Sama and the SAPPF recently invited the BHF, the Council for Medical Schemes, the regulator of medical schemes, the Department of Health and the Competition Commission to a meeting at which they outlined the need for changes to the billing codes and presented proposed codes for next year.
There have been no guideline tariffs in place since 2010, when a court struck down the guideline Reference Price List drawn up by the Department of Health.
The department published its list after the Competition Commission in 2003 put a stop to and fined schemes and healthcare providers for negotiating tariffs that schemes would use to reimburse your claims.
In its submission to the Competition Commission’s inquiry, the BHF says medical specialists have become a huge cost driver for medical schemes due to the excessively high tariffs they are charging. The top five specialities – orthopaedic surgeons, anaesthetists, oncologists, cardio-thoracic surgeons and pathologists – are the major concern, it says.
Patel says the BHF is now exploring legal ways in which to publish codes or tariffs that reflect reasonable levels of pricing and provide certainty, affordable healthcare access and sustainability for all like-minded stakeholders.
Patel says because billing codes concern the scope of medical practice and professional services – and not pricing – the BHF believes it is within its mandate to discuss them with stakeholders.
Aron says the Competition Commission has not been very forthcoming in supplying guarantees that discussions around coding structures and the unit values assigned to these codes do not amount to collusion, and the fear of retribution has has “paralysed” the industry.