The Council for Medical Schemes (CMS) was in the process of deregistering a medical scheme that had deliberately not complied with Regulation 8 of the Medical Schemes Act, which relates to the payment of prescribed minimum benefits (PMBs), the regulator said last week.
The registrar of medical schemes and chief executive of the CMS, Monwabisi Gantsho, said some medical schemes had indicated that they would not abide by the regulator’s interpretation of Regulation 8, which says that schemes must pay for the diagnosis, treatment and care of all prescribed conditions “in full”, or at the price charged by the health-care provider. However, many had since agreed to comply with the CMS’s interpretation.
The North Gauteng High Court ruled earlier this month that treatment for all of the nearly 300 PMB conditions listed in the Medical Schemes Act must be paid in full at the price charged by the health-care provider and not “in full” in terms of scheme rates, as schemes had contended.
After this ruling, Gantsho promised that the regulator would act against schemes that had been non-compliant and against their administrators.
The CMS said its complaints adjudication unit received 5 617 complaints in the 2010/11 financial year. It said the number of complaints reaching this unit had been increasing every year.
But Gantsho said that not all complaints relating to PMBs necessarily translated to the contravention of Regulation 8.
“The member could have voluntarily used a non-designated service provider, which means that the scheme had acted within its rights by imposing a co-payment or paying related claims at the scheme rate and not in full. In other instances the scheme will realise that they made an error and pay the claims in full after a complaint would have been lodged,” he said.
Nevertheless, he said there were schemes that deliberately did not pay full PMB benefits.
“At this stage there is only one scheme that is deliberately not complying with Regulation 8; our compliance and investigations unit is attending to the matter (in terms of) section 27 proceedings to deregister the scheme,” he said.
The 2011 CMS annual report showed that an inspection into Sizwe Medical Fund found that the scheme had not been complying with PMB regulations. Fedhealth had also not been paying in full for PMB conditions ever since it had obtained a legal opinion which advised the scheme that “payment in full” meant “payment at scheme rate” and not at cost.
Gantsho said he did “not think it would be appropriate” to name the scheme that could be deregistered or those that the regulator had already found guilty of non-compliance.
Possible punitive measures would include penalties and deregistration of the medical scheme, all in terms of the relevant sections of the Medical Schemes Act of 1998.
Fedhealth said it had been paying PMB claims in full since August and it had not seen much of an impact on reserves as a result, but the scheme said it was concerned that in future it may see PMB costs escalate.
“Fedhealth has supported the Board of Healthcare Funders (BHF) decision to seek a declaratory order on the meaning of the disputed regulation because this, it believes, is in its members’ best interests. The scheme has also sought its own legal opinion, however, it will not appeal the court ruling on its own stead but, if anything, under the auspices of the BHF,” Fedhealth’s acting principal officer, Peter Jordaan, said.
The BHF, which represents 95 percent of medical schemes in the country, said it believed the ruling in favour of the CMS might negatively affect medical schemes that had been under financial pressure due to the “opportunistic and reckless charging by some health-care providers for PMBs”.
“We are concerned that medical scheme members will be negatively affected as their schemes will continue to be subjected to an open-ended liability and may have no choice but to raise contribution premiums,” the organisation said.
But Clayton Samsodien, the managing director of Genesis Capital’s health-care subsidiary, Genesis Healthcare Consultants, said this was the right decision as a ruling in favour of the BHF would have been likely to result in a reduction in benefits for consumers.
“Many consumers already feel that they are paying more each year for fewer benefits. In fact, medical aid inflation already outstrips consumer price inflation,” he said. - Londiwe Buthelezi