CMS response to BHF’s LCBO media statement

The Council for Medical Schemes notes the media statement published by the Board of Healthcare Funders regarding Low-Cost Benefit Options (LCBOs).

At this stage, the CMS prefers not to respond directly to the contents of BHFs statement but would rather wait for the outcome of the court ruling proceedings.

For purposes of transparency, the CMS had engaged the 71 medical schemes Principal Officers and Board of Trustees on the progress and status of LCBOs. Accordingly, the CMS regards the matter as priority, and it is in constant engagement with NDOH on the next directive.

In 2015, the CMS guided by the NDOH, outlined a framework and guiding principles that would permit the introduction of LCBOs within the medical schemes industry. The published framework was not considered or approved by the Minister of Health then because ‘it did not address other priority areas of the health system,’ and the benefits package was lacking in that the scope of benefits included was deemed to not adequately address the target population’s burden of disease among other reasons.

CMS conducted a study under circular 80 and 82 to determine the desirability of demarcation products and LCBO products and found that these products do not fully offer members adequate financial risk protection and do not seem to be addressing the burden of diseases in the country.

Based on this outcome, from 2020 – 2022, CMS swiftly moved and conducted wide stakeholder consultations on the LCBO framework. Overall, the regulator received two hundred (200) comments from forty (40) stakeholders.

An open process, workstreams were established that included medical schemes funders, experts in the field of public policy, healthcare, actuary sciences, legal, advocacy and insurance to make proposals regarding market affordability, benefits and pricing, legislative compliance, risk and implementation.

Important to note that throughout the entire process, BHF was consulted and formed part of these workstreams. Due to the LCBO products and demarcation products requiring legislative changes for implementation, the process was then treated as a policy framework to ensure that the NdoH would be adequately informed on the requirements of any legislative implementation in respects of these products.

In 2023, the CMS finalised the LCBO Report and officially handed it over to NDOH to study the recommendations.

CMS would like to remind the public that any implementation of any LCBO must be supported by some form of legislative changes. This function is wholly guarded and implemented by the National Department of Health.

The CMS respects judicial proceedings and will be guided by any declaration that is made by the Court in respect of LCBO products. As the regulator of medical schemes, we again appeal for a dialogue and closer collaboration to arrest the declining membership and the rising burden of disease.

The CMS supports the process to have synergy with other policy developments, such as the current PMB review process (focusing on the PHC package) and broader health system priority programmes such as NHI.