Prescribed minimum benefits a blessing and a curse
Over the past year a battle has raged in the North Gauteng High Court as stakeholders in the healthcare industry square up over the provision of prescribed minimum benefits (PMBs). On 7 November 2011 the Court handed down a ruling upholding Regulation 8 of the Medical Schemes Act 131 of 1998. This section of the legislation was challenge by the Board of Healthcare Funders (BHF) on behalf of a number of medical schemes and administrators, including the South African Municipal Workers’ Union National Medical Scheme (SAMWUMed). PMBs are defined in the Act as the minimum level of diagnosis, treatment and care that a medical scheme is obliged by law to cover.
A double-edged sword
The regulation has become a bit of a double-edged sword. On the one hand it directs medical schemes to “pay for the diagnosis, treatment and care of all PMB conditions in full, or at the price charged by the healthcare provider.” Medical schemes members must be compensated in full, from the medical schemes’ risk pool, for 270 serious health conditions (such as tuberculosis and cancer), any emergency condition and 25 chronic diseases (including epilepsy, asthma and hypertension). Medical schemes are prohibited from dipping into member savings to fund PMBs!
The flipside of the debate is that medical schemes’ costs are going through the roof, partly as a result of a law designed to protect their consumer rights... In an apparent attempt to limit the costs of PMB, the BHF (and others) petitioned the court for a more favourable interpretation of Regulation 8. They wanted to provide treatment for PMB conditions only up to the scheme tariff, with members chipping in the rest. The Council for Medical Schemes (CMS) and 12 others stood as respondents to this action and held sway in this instance. (The CMS is the custodian of the Medical Schemes Act and has always stood by a straightforward interpretation and implementation of the provisions on PMBs.)
The Court ruled that PMBs remain in place and that the law which prescribes them stands – a decision welcomed by the CMS. Medical schemes will have to continue to pay for PMBs in full as intended. Costs can be kept in check by directing scheme members to use designated service providers (DSP) when seeking treatment for PMB conditions. Most medical schemes have some form of DSP system in place, whereby members make use of the schemes’ first choice healthcare providers (doctors, pharmacists and hospitals) to avoid incurring unnecessary costs.
Unhappiness in certain quarters
The BHF has since issued a press release to express their disappointment at the ruling. “The merits and principles of the matter appear not to have been considered by Judge Pretorius,” they say. Among the reasons for the ruling was that the BHF, an industry body not directly affected by the outcome, lacked locus standi. Is the decision good or bad for medical schemes members? On the face of it there shouldn’t be any change – because medical schemes have been instructed to continue with business as usual.
But the reality is that the CMS victory will probably turn out badly for medical scheme members. The BHF believes the ruling will lead to further uncertainty with regards the pricing of healthcare. They say that further cost increases are inevitable as medical schemes adjust their practices to comply fully with the Act… The load financial burden carried by individual members will have to increase further.
One of the risks is that healthcare service providers will overcharge for work in the PMB area because schemes have no choice but to pay… “We believe that this judgement may 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 PMBs,” observes the BHF. “We are concerned that medical scheme members will be negatively affected as their schemes will be subjected to an open ended liability and may have no choice but to raise contribution premiums.”
Going backwards?
Healthcare prices have been impacted by other regulations. Healthcare pricing guidelines fell by the wayside largely due to competition concerns... The healthcare coding structure fell by the wayside as a result. The BHF concludes: “The current unruly nature of charging for healthcare is undermining the reforms being proposed by government to make healthcare more accessible, equitable and affordable.” A possible solution will be for industry stakeholders to establish a Pricing Negotiating Forum – a step backwards – but necessary to ensure fair reasonable tariffs for provider, medical scheme and medical scheme member.
Editor’s thoughts: It seems as if medical schemes have pushed the boundary when it comes to compensating members for PMB expenses. Members aren’t aware of their rights and certainly don’t take the time to go through the bills and invoices submitted to their medical schemes… And given the shrinking commissions paid to medical schemes brokers it seems unlikely members can count on their intervention. Who should hold medical schemes to account to ensure scheme members receive their legal entitlements? Please add your comment below, or send it to [email protected]
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