Draft Amendments to Regulation 5 and 8 of the Medical Schemes Act

The Minister of Health has, on 14 July 2015, published draft amendments to the General Regulations to the Medical Schemes Act and provided interested parties a period of three months to comment on same.

The South African Medical Association expresses its concern at the intended revision of these regulations which pertain to the provision of and payment for Prescribed Minimum Benefits. In particular, the revision of Regulation 8 which will, in essence, limit the liability of medical schemes to pay for the diagnosis, treatment and care of prescribed minimum benefits according to the 2006 Reference Price List adjusted for inflation in terms of CPI. While this will undoubtedly provide medical schemes with certainty in respect of their financial exposure in this regard, SAMA has concerns that this certainty will come at a cost to medical scheme members as well as to practitioners who elect to become Designated Service Providers.

This revision is regarded as ill-advised by SAMA. Simply put, the 2006 Reference Price List is almost 10 years out of date and its deficiencies cannot be remedied by applying an adjustment for inflation. There have been numerous advancements in medical technology and procedures over the last decade which are not included in the 2006 RPL list. The effect on medical scheme members would be significant as they would no longer be funded for optimal and up-to-date treatment if this treatment does not appear in the 2006 RPL.

It should also be noted that the Medical Schemes Act does not empower the Council for Medical Schemes or any other entity the authority to set tariffs or fees to be charged by medical practitioners. This Act and its Regulations are confined to regulating medical schemes, not medical practitioners.

While it has been stated that the intention is to afford medical practitioners and medical schemes the opportunity to negotiate tariffs for the payment of PMB services, the reality is that such individual negotiation on tariffs does not occur and SAMA is of the view that any such collective negotiation on tariffs may, in fact be in contravention of the Competition Act.

SAMA is in the process of compiling a considered and comprehensive submission in response to the proposed amendments published by the National Department of Health. It is our intention to examine the legal validity of the intended amendments, as well as the practical implications for both its members and the patients who receive medical services for prescribed minimum benefits.