Medical Aid industry prepares for CPA compliance

Matthew Gibson

“Don’t tell me that complicated documents are ‘the nature of the beast’. If it was written by a human being, it can be simplified.”

This was the message from Mamodupi Mohlala, Commissioner: National Consumer Commission (NCC) to delegates at the Board of Healthcare Funders (BHF) conference, held in Sun City this week. The conference, titled The Turning Point, attracted over 900 local and international delegates from the healthcare industry, including healthcare professionals, policy makers and regulators.

Mohlala was making specific reference to Section 22 of the Consumer Protection Act, which states that consumers have a right to information in plain and understandable language. A number of complaints have already been received by her office from consumers who say they do not understand the rules or the contexts in which they apply.

The Commissioner outlined a number of the Act’s provisions which have specific bearing on medical schemes, and explained that the medical industry was one of the three earmarked for special investigation this year. Preliminary discussions between the NCC and the Council for Medical Schemes (CMS) started on May 25, 2011.

Consumer law expert Matthew Gibson from Edward Nathan Sonnenbergs confirmed that the provisions of the Act had not come as a surprise to the medical schemes industry, and that some aspects of the new law had formed part of existing laws dating back to the 1950s.

“The CMS is considering applying for exemption from the Act,” he said, “on the grounds that the Medical Schemes Act applies. But the Minister will have to agree that the existing legislation offers the same protection as the Consumer Act ... and the Consumer Act is really comprehensive.”

He warned delegates that although the new CPA was based on European law, it is not a facsimile “so European best practice doesn’t mean that you are compliant in South Africa.”

The Commissioner confirmed that her office has a mandate to negotiate agreements with any regulatory body, and that she is willing to engage with any statutory and non statutory bodies, including the BHF, on matters of common interest or that have impact on consumers.

The aim of the discussions and the investigations are to enter into a memorandum of understanding, so that any issues of concern can be dealt with. These areas relate to specific provisions of the Act, as they apply to the medical services sector.

Providers of healthcare goods and services in South Africa are bound to observe the following CPA provisions, amongst others:

• Section 8: Protection against discriminatory marketing;
• Section 22: Right of information in plain and understandable language;
• Section 23: Disclosure of price of goods or services;
• Section 40 Unconscionable Conduct (Right To Fair and Honest Dealing);
• Section 48: Unfair, unreasonable or unjust contract terms;
• Section 54: Consumer’s rights to demand quality service;
• Section 55: Consumer’s rights to safe, good quality service; and
• Section 61: Liability for damage caused by goods.

“As an example, we are looking at the issue of Section 23 in relation to Section 48,” she said. “People are complaining about hospital treatments, saying that their medical aid doesn’t pay the full amount and the consumer is forced to pay an amount they did not expect or understand.”

She also explained the relevance of Sections 40 and 48: “There have been many queries around the access to chronic medications. Consumers feel they have little recourse because it is an issue of life and death. They are forced to pay, and the people who are the most affected are often elderly and financially challenged. They object to having to pay for chronic medications at a rate that is the same as other, economically active consumers.”

Mohlala reassured delegates that, in their investigations, her office would be mindful of issues around competition and other relevant aspects.

Gibson reminded delegates that the Act should be taken very seriously.

“Even if we get exemptions, we are going to have to make changes to ensure that we engage with consumers in ways that comply with the Act,” he said.