Health MEC Theuns Botha
Health MEC Theuns Botha

Medical aids ‘owe state hospitals millions’

Time of article published Sep 14, 2011

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Health Writer

THE Provincial Department of Health says its hospitals are owed millions of rands by medical schemes that have not settled their members’ medical bills on time.

The department has also expressed concern that medical aids may be “dumping” patients into the public health care system once they have depleted their medical aid funds in the private sector.

According to the department, the bills add up to R22.1 million, with some of the debt older than a year.

The latest figures for August show that R13.6m, or 62 percent, of the debt is within the allowed four-month grace period in which medical aids can still settle their account without penalties, while the remaining R8.5m is older than four months.

According to Helene Rossouw, spokeswoman for health MEC Theuns Botha, by the end of August about 22 percent of the total debt or R4.8m was under one year, while 17 percent, or R3.7m, was older than a year.

The department didn’t release the names of the medical schemes involved.

In July, the total debt by medical schemes stood at R34m, of which R23m fell within the grace period.

In a parliamentary response recently, Botha revealed that while the department received about R200m from medical schemes annually, and had a memorandum of agreement of understanding with more than 40 medical schemes, they were closely monitoring the potential “dumping” of patients by medical schemes into the public health care system.

This dumping was a usual practice in the industry when medical aid members ran out of funds in the private sector.

Botha said that the department met each of the 40 medical schemes every year to discuss different issues, including the dumping of patients, reasons for non-payment and other operational matters.

According to July figures, some of the public health institutions that were owed exorbitant amounts of money by medical schemes was Tygerberg Hospital, which was owed in excess of R10m; Groote Schuur Hospital was owed about R9.3m; Red Cross Children’s Hospital was owed just over R5m; and Emergency Medical Services and Karl Bremer were owed just more than R1m each.

Botha said that a service provider, MediKredit, which collected money on behalf of the department, had since 2005 successfully collected 89 percent of the claims.

As a standard practice, the department was also penalising medical schemes that were either dumping patients or overusing the public health-care services.

Rossouw said a utilisation analysis was conducted annually for all schemes with designated service provider agreements.

According to the agreement, should a scheme exceed the set criteria – which includes the length of stay of a private patient in a public hospital – it shall reimburse the department about 20 percent of the total invoice.

This additional amount of money was payable within 30 days of receiving the total medical bill.

Rossouw said that the purpose of the penalty was to limit the overuse of state health care by private patients, who sometimes required long-term care in hospital.

She said that no penalties had been issued to medical schemes recently after a utilisation analysis showed no undue use of the public healthcare services.

The department has also not taken legal action against any of the schemes.

“Given the co-operation between the schemes and the department in terms of the service agreement, the department has not yet had a reason to consider legal action against any of the schemes.

“It should also be noted that the Medical Schemes Act stipulates that the member is ultimately liable for their outstanding claims,” said Rossouw.

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