Medical schemes will have to do a better job of informing you of the benefits you, as a member, enjoy. And when you undergo medical treatment schemes will have to clearly warn you if their liability is limited and, together with healthcare providers, ensure you know which part of the bill will be for your account.
This is a result of the Consumer Protection Act (CPA), which became effective in April, speakers told delegates at the Board of Healthcare Funders (BHF) conference at Sun City this week.
In terms of the CPA, you have the right to be informed about goods and services in plain and understandable language.
Although the National Consumer Commission (NCC) has been operating for only 13 weeks, it has already launched an inquiry into the medical schemes industry as part of an inquiry into the medical and pharmaceutical industries, Mamodupi Mohlala, the commissioner of the NCC, told the conference.
Mohlala said her office had received complaints from medical scheme members, particularly elderly ones, that they do not understand their schemes’ rules. Her office discussed the complaints with the Council for Medical Schemes, which agreed that scheme rules are technical but said there is no alternative.
But, Mohlala said, her office disagrees and believes that any piece of writing can be simplified. Consumers should fully understand the terms and conditions to which they are bound, she says.
Members have complained about thick medical scheme documents printed in such a way that they can hardly be read, Mohlala said.
Matthew Gibson, a consumer law expert at law firm Edward Nathan Sonnenbergs, said at the conference that the CPA states that plain understandable language means language that can be understood by an ordinary consumer from the class of people, be they metal workers or chartered accountants, for whom the contract is intended. In terms of the Act, such a consumer is one with average literacy skills and minimal experience as a consumer of the goods or services being offered, he said.
The NCC plans to produce guidelines on how schemes should communicate with you in plain language, Mohlala said.
Dr Monwabisi Gantsho, the Registrar of Medical Schemes, said his office also plans soon to publish a circular giving guidelines on how schemes should communicate with members.
Mohlala said her office is also investigating complaints from members who obtained pre-authorisation before undergoing medical treatment only to find that they were liable for a portion of the medical bill. The members felt obliged to pay the bills for fear of being blacklisted.
Section 23 of the CPA deals with the disclosure of the price of goods and services, while section 48 deals with unfair, unreasonable or unjust contract terms, she said.
Gibson said the Act prevents suppliers of goods and services from requiring you to waive any of your rights, assume any obligation or waive their liability in a way that is unfair, unreasonable or unjust. It also prevents suppliers from imposing such terms as a condition of entering into a transaction.
Mohlala said the complaints that the commission has received about pre-authorisation will be considered in the light of these sections of the Act, taking into account members’ expectations based on their understanding of the contract and the liability they subsequently faced.
Gibson said that if a contract, such as that for medical scheme membership, limits the scheme’s liability, your attention must be drawn to the relevant clauses before you conclude the transaction.
Another issue the commission is looking into is the pricing of chronic medicines, the consumption of which are often matters of life and death, Mohlala said.
Consumers feel they have little influence over the price of these medicines, and the elderly, who often have limited financial means, pay the same price for these medicines as economically active consumers, she says.
Other sections of the CPA that are most likely to have an impact on the healthcare sector are those that protect consumers against discriminatory marketing, give you the right to fair and honest dealing, give you the right to demand safe and quality service, and make providers of goods and services liable for damage caused by their goods, Mohlala said.
EXEMPTION FROM THE ACT
The Council for Medical Schemes has applied for an exemption from some of the provisions of the Consumer Protection Act (CPA), but speakers at this week’s Board of Healthcare Funders conference say schemes will not escape the Act’s provisions entirely.
Dr Monwabisi Gantsho, the Registrar of Medical Schemes, told the conference that the council has applied to the Minister of Trade and Industry for the medical schemes industry to be exempt from some of the provisions of the Act, in particular those that pertain to the adjudication of complaints and appeals.
He said the council has a working steering committee in place with the National Consumer Commission (NCC), and agrees with NCC head Mamodupi Mohlala that dispute resolution procedures will be duplicated if medical schemes, administrators, managed care entities and medical scheme brokers are not exempted from the provisions of the Act, because the CPA also provides for dispute resolution.
Mohlala told the conference that the commission has held preliminary discussions with the Council for Medical Schemes with a view to signing a memorandum of understanding on the role of the two regulators, particularly where consumer complaints to the NCC relate to scheme rules that have already been approved by the council.
However, she said, the NCC cannot contract away its right to protect consumers.
The commission has raised its concerns with the council about:
* The protection of consumers during the liquidation of schemes;
* The prescribed minimum benefits;
* Scheme contracts and benefit schedules that are not in plain and understandable language;
* Discriminatory practices by schemes;
* The treatment of pregnant women; and
* The amendment of medical scheme rules and the extent to which members are involved in these amendments.
Mohlala said the NCC and the council have agreed to develop a code of conduct for schemes and service providers, and the council will establish a steering committee to oversee the code.
Matthew Gibson, a consumer law expert at Edward Nathan Sonnenbergs, said at the conference that many industries have applied to the Minister of Trade and Industry for an exemption from the CPA. However, the minister may grant an exemption only when existing legislation offers consumers the same level of protection as that afforded by the CPA, he said.
Even if the medical schemes industry or the Council for Medical Schemes obtains an exemption from the CPA, the way in which schemes do business will have to change, Gibson said.
If the CPA also deals with issues covered by the Medical Schemes Act, the provisions of both Acts apply concurrently, Gibson said.
If the provisions of the two Acts are inconsistent, the provision that extends the greater protection to a consumer will prevail, he says, adding that in most cases it is likely that the CPA will prevail.
Gibson said the CPA came into force on April 1 and is generally not retrospective. Medical scheme membership is generally renewed on January 1 each year. In most cases, the CPA’s provisions will apply only to members who signed up after April 1. However, all members should expect to see more consumer-friendly benefit schedules and other communication from their schemes from this year, he said.
A recent survey by OMAC Actuaries and Consultants found that almost half of the 1 000 medical scheme members surveyed did not read their benefit schedules.