The regulator of medical schemes and the Department of Health both moved this week to allay fears that proposed amendments to a controversial regulation would undermine your right to have your medical scheme pay the full cost of certain minimum benefits.

The department has proposed the amendments so that medical schemes will not be liable for the full cost of the prescribed minimum benefits (PMBs) no matter how much a doctor or other healthcare provider charges. The regulation has been blamed for making schemes unaffordable.

Some commentators have warned that the amendments could expose you, as a scheme member, to potentially high co-payments for essential medical services.

However, Dr Anban Pillay, the deputy director-general for health regulation and compliance management at the Department of Health, stated at a medical scheme conference this week that this is not the department’s intention, and, in fact, it wants to prevent co-payments by forcing providers and schemes to negotiate PMB tariffs.

The Council for Medical Schemes, which is headed by Daniel Lehutjo, said this week the proposed amendments to regulation eight of the Medical Schemes Act were narrowly confined to circumstances in which you voluntarily choose not to use the designated service provider your scheme expects you to use if you are to enjoy cover in full for the PMBs (see “Amendments apply only in limited circumstances, council says”, below).

Therefore, it says, the protection that medical scheme members have against co-payments for PMBs would largely remain in place.

Pillay told Personal Finance the department’s intention is for medical schemes and providers to negotiate the rate they will charge and pay for PMBs, and only where negotiations fail would schemes be obliged to pay a stipulated rate.

Earlier this week, he told the Board of Healthcare Funders conference that he hoped schemes and providers would support the department’s initiative to encourage both parties to negotiate a reasonable price for PMBs.

The PMBs ensure you have benefits for all emergency conditions, conditions that would affect your quality of life if left untreated and common chronic conditions.

Pillay says if schemes were obliged to pay a reasonable rate for PMBs, providers could still charge more, potentially exposing you to liability for the difference. But the Department of Health is hoping that providers will prefer not to have to collect part of their bills directly from you and will therefore be incentivised to contract with schemes to receive payment in full.

He says the intention of the proposed amendments is that, instead of being fully liable for PMB services, schemes should, when they are unable to contract with providers, pay in accordance with the billing rules and the tariff codes of the 2006 National Health Reference Price List published by the Council for Medical Schemes, the rand value of which has been adjusted annually in accordance with the Consumer Price Index.

The alternative in the amendments is that schemes negotiate a rate that the provider will charge for PMBs, with no co-payments for you, and Pillay says this outcome would be “the first prize”.

He says an agreement may have to be reached in cases where providers that are not contracted to your scheme treat you in an emergency and bill more than the tariff rate suggested in the proposed amendments, but he says that emergencies do not make up the bulk of the PMB costs.

The 2006 guideline tariffs published by the council are the most recent list of tariffs that have not been challenged in court or withdrawn.

Pillay says the proposed amendments to regulation eight are not intended to reduce your entitlement to the PMBs. It was also not the Department of Health’s intention to set tariffs for healthcare providers.

He says that, because there are such divergent views on the amendments, it may be necessary to have a workshop to find a middle ground and agree on an implementable regulation that will not mean more co-payments for you.

Pillay told the BHF conference that, in its submission to the Competition Commission’s inquiry into the private healthcare sector, the department has noted that some doctors are diagnosing and coding certain medical conditions as PMBs that previously were not coded as such. They are doing this to ensure that schemes pay for the treatment in full.

He says there has been divergence between the prices that some medical disciplines charge for the same services, depending on whether or not they are a PMB.

Pillay says that although only a minority of providers are perpetrating these practices, this can have a massive impact on a scheme.

AMENDMENTS APPLY ONLY IN LIMITED CIRCUMSTANCES, COUNCIL SAYS

The proposed amendments to regulation eight of the Medical Schemes Act do not change the requirement that schemes must pay in full, without co-payments or deductibles, for the cost of diagnosing and treating conditions covered by the prescribed minimum benefits (PMBs), the regulator of medical schemes says.

In a statement released this week, the Council for Medical Schemes says the amendments will not apply to emergencies, when you may be treated by a doctor who charges high fees, or to services for PMBs for which your scheme has not appointed a designated service provider (DSP).

According to the council, the proposed amendments apply only to a sub-section of regulation eight that states that your scheme can limit its financial liability for the PMBs by contracting with a DSP, which you must use to be covered for the PMBs in full. This sub-section says that if you voluntarily choose not to use that DSP, your scheme may impose a co-payment, and your scheme must disclose the co-payment in its rules.

The council’s statement says the Department of Health is proposing that this sub-section be amended to state that, if you voluntarily choose not to use a DSP, your scheme is obliged to pay for the service at at least the rate stipulated in the 2006 National Health Reference Price List, plus the Consumer Price Index for every subsequent year.

The council says that, currently, a scheme can decide arbitrarily what co-payment you should pay.

Another sub-regulation of regulation eight outlines the circumstances in which you may use a provider other than your scheme’s DSP and still be covered in full by your scheme. The council says the amendments do not propose to change these circumstances.

The circumstances in which you can use a non-DSP are in an emergency, where the DSP is unable to treat you without unreasonable delay, and where there is no DSP within reasonable proximity of your home or place of work.

But Stephen Harrison, a former legal adviser at the Council for Medical Schemes and a lecturer in emergency medicine at the Cape Peninsula University of Technology, says the council’s interpretation of the amendments fails to deal with the problem that schemes face when they are unable to contract with healthcare providers, such as specialists, because, in these cases, schemes would still be liable to pay for PMB services in full.

He says the wording of the proposed amendments, and the different interpretations of what effect the Department of Health intends the amendments to have, have given rise to an extremely confusing and unsatisfactory situation that is not in the best interests of consumers.

Dr Anban Pillay, the deputy director-general for health regulation and compliance management at the Department of Health, says the council’s interpretation relates to how the proposed amendments will apply, and this still has to be debated and agreed to. However, the department’s intention is to stop healthcare providers from charging schemes whatever they like and to avoid co-payments for members.