BHF: Registrar of Medical Schemes to de-register medical schemes is a great concern
The BHF views the recent announcement by the Registrar for Medical schemes, to de-register a medical scheme based on its refusal to pay for Prescribed Minimum Benefits (PMBs) in full, with great concern and believes that this action can be detrimental to the healthcare industry.
The Registrar’s insistence that medical schemes pay the full cost of what a healthcare provider charges, no matter what that cost is, will negatively affect the consumer. BHF is deeply concerned that enforcing this payment ‘in full’ on ‘invoice’ at a time when there is no regulated process on how those who provide healthcare services should charge, to a large extent undermines the reforms being proposed by government, and will lead to increased contributions thereby making medical scheme membership unaffordable.
The funds of a medical scheme, which are made up of member contributions, are looked after by a board of trustees. These trustees must ensure that the members’ funds are used responsibly. By enforcing a ‘pay in full at whatever cost’ rule, the Registrar is removing that fiduciary duty from the trustees and effectively creating an open-ended liability for the scheme and an open cheque book for the healthcare provider. The only recourse for the scheme would be increasing the premium which the members must pay each month.
The Registrar’s assertion that the North Gauteng High Court handed down a ruling which states that all of the nearly 300 PMB conditions listed in the Medical Schemes Act must be paid in full at the price charged by the healthcare provider is erroneous. The judgement dismissed the case on a legal technicality and therefore did not rule on the merits and principles of the matter relating to payment of PMBs by medical schemes.
As a result of the lack of judgement on the interpretation of the Regulation, the uncertainty with regards to pricing of healthcare continues. It is evident that this will negatively affect the sustainability of medical schemes, which have been under severe financial pressure due to the opportunistic and reckless charging by some healthcare providers for Prescribed Minimum Benefits. BHF is also 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 Minister of Health has cited spiralling costs in the private sector as one of the reasons to usher in NHI. Therefore, the actions by the Registrar and the current behaviour by some providers simply reinforces the need to regulate costs relating to healthcare services. The current unruly nature of charging for healthcare is undermining the reforms being proposed by government to make healthcare more accessible, equitable and affordable.
The BHF is of the view that the Registrar’s insistence that schemes make use of Designated Service Provider (DSP) arrangements is misguided. Since there is no legal compulsion for a provider to join a DSP, it is likely that an increasing number of providers will opt out of these arrangements when they realise that schemes are forced to reimburse them at whatever their charge. This viewpoint has been reinforced by a legal opinion distributed by South African Medical Association (SAMA) which SAMA which effectively states that providers could earn more if they do not enter into DSP arrangements with schemes.
The BHF is calling for the Minister of Health to step in to stem the tide which could see some medical schemes and their members being fleeced of their funds.
