The fate of a LCBO framework
In March 2019, the Council for Medical Schemes released a discussion document seeking industry inputs on how best to go about implementing Low Cost Benefit Options (LCBOs), with the intention of introducing measures to provide the protection of healthcare cover on medical schemes for low-income households.
“In December, the Council for Medical Schemes (CMS) announced that no further exemptions to the insurance products would be granted and the replacement LCBOs too would no longer be developed and rolled out – no exemptions, no exceptions,” emphasised Patrick Masobe, Chief Executive Officer of Agility Health and former Registrar of the Council for Medical Schemes (CMS).
An extensive engagement exercise
Recently, however, the CMS wished to update all stakeholders on the progress in addressing the fate of the demarcation products through a LCBO guidance framework.
The Council undertook an extensive engagement exercise with the key stakeholders to explain the rationale and context behind the issuing of Circulars 28, 30, 80 and 82 in March and December 2019, respectively. These circulars were accompanied by two key research outputs namely: a detailed discussion paper on the feasibility of the introduction of a low-cost benefit option, and a comparative analysis between the demarcation products and the medical schemes.
These stakeholder engagements included a broad range of stakeholders including National Treasury, the Financial Sector Conduct Authority (FSCA), Prudential Authority (PA), Board of Healthcare Funders (BHF), Health Funders Association (HFA), medical schemes, administrators, Managed Care Organisations (MCOs), brokers, insurances and related service providers.
Establishing two committees
Although these engagements are continuing, they have been very productive and have led to the joint decision of establishing two stakeholder-based advisory committees. These will be tasked with:
- Addressing the challenges faced by different stakeholders concerning their product offerings;
- Developing a road map leading to end March 2021;
- Serve as a platform for engagements on the draft LCBO framework that CMS has developed; and
- Provide the inputs on the LCBO framework before it is submitted by CMS for approval by the Minister of Health.
The terms of reference of these advisory committees are appended for stakeholder comments. Ms Avril Jacobs is the designated Chairperson for the Insurance stream, and Mr Michael Willie will chair the Administration and Funders stream.
Inputs to these ToRs, as well as nominations (including CVs) — preferably through industry associations — are to be emailed to [email protected] by 28 February 2020.
Continuing engagements with stakeholders will proceed immediately after the constitution of these advisory committees. As these advisory committees are a priority, the CMS therefore encourages inputs within the set timelines.
It has been noted that some stakeholders have lodged appeals to the CMS in terms of the provisions of the Act. These are noted and will be dealt with internally. The CMS requests all the concerned parties to allow the engagement process to proceed with their cooperation.
The Demarcation Regulations
The CMS confirms its concurrence with the media statements issued by National Treasury on 28 October and 23 December 2016, which unpack the purpose of the demarcation regulations: The regulations seek to demarcate the responsibility for supervision of medical schemes and health insurance products, and ensure that health insurance products do not undermine the social solidarity principles inherent in medical schemes, resulting in better protection for consumers. Accordingly, the regulations do not allow insurers to continue to provide primary healthcare insurance policies. These types of benefits will, going forward, be provided in accordance with the MSA.
It should be noted that in terms of the Demarcation Regulations, demarcation products were outlawed as early as 2017 and only exist through the exemption framework that was jointly developed by Treasury, NDoH, FSCA and CMS for this purpose. This framework applied between April 2017 and March 2019 but was further extended to 31 March 2021, in consultation with the abovementioned parties.
This extension was not intended to apply in perpetuity but was meant to provide a transitional arrangement for the migration of demarcations products to the medical schemes’ regulatory environment.
It is, therefore, in the best interest of all stakeholders to ensure that the work that will be dealt with by the advisory committees proceeds promptly. Should there be no significant progress in addressing these challenges, the CMS will find it difficult to continue providing exemption to these products.
The final LCBO guidance framework has to be comprehensive and tackle both the challenges faced by medical schemes and primary healthcare insurance providers. Medical schemes are therefore also encouraged to ensure that they participate in these advisory committees for their inputs to be considered.
Writer’s Thoughts:
With the joint decision of establishing two stakeholder-based advisory committees, lets hope all stakeholders involved participate for their inputs to be considered. As mentioned above, with no significant progress in addressing these challenges, the CMS will find it difficult to continue providing exemption to these products. Do you agree? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
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#HandsOffLCBO TASK TEAM OFFICE
TO: THE REGISTRAR & BOARD OF DIRECTORS COUNCIL FOR MEDICAL SCHEMES
RE: OFFICIAL NOTICE FOR BOYCOTT OF COUNCIL FOR MEDICAL SCHEMES ADVISORY COMMITTEES
DATE: 27 FEBRUARY 2020
OFFICIAL NOTICE FOR BOYCOTT OF COUNCIL FOR MEDICAL SCHEMES ADVISORY COMMITTEES
The Healthcare Stakeholders Forum, its members and affiliates would like to inform the Council for Medical Schemes of their decision to BOYCOTT CMS's call for establishing the 2 Advisory Committees due to the reasons stated below:
1. FACT: The CMS industry leadership has deteriorated under Dr. Sipho Kabane who turned out to be a chauvinist bully who is busy bullying his own Council’s staff members who disagree with him and the sector stakeholders by imposing his irrational will and desire to undermine and openly disrespect stakeholders.
2. FACT: The Circular 80/82 of 2019 removes LCBO effective from 31 March 2021, as an option for medical insurance and low-cost benefit products, thus creating a crisis in the medical insurance and primary healthcare providers industry.
3. FACT: Circular 12 of 2020 added to the confusion by reintroducing LCBO as a way forward, completely disregarding the press releases and articles which the Registrar Dr. Kabane himself had issued previously.
4. FACT: The data findings that were presented to support Circular 82/82 of 2019 by CMS were skewed to favour the Council's argument to justify the Council's heinous attack on the industry by still upholding Circular 80/82 of 2019. These circulars must be reversed immediately and only thereafter can stakeholders engage on a meaningful dialogue with the Council.
5. FACT: Medical aid membership have been deteriorating under the current leadership, the current stunts will also not increase the medical aid numbers, but rather burden the government infrastructure and increase the public Healthcare bills.
6. FACT: The Registrar, Dr. Sipho Kabane, has on many occasions misled the public and failed to honour basic agreements he made as commitments to stakeholders. Last week, the Council on his command made promises to protesters who came to CMS to lay grievances in a permit-based protest March, that he will be present this week 27th February 2020 Thursday to receive the Memorandum of Demands from protesters and stakeholders.
Days before the March his office said that the Registrar will not be available to receive the Memorandum of Demands from protesters since he will be out of town and office on Thursday, yet it was him who made this agreement and arrangement. So, the Registrar Dr. Kabane cannot be trusted as a CMS Registrar serving as a public servant in such a high office which requires highest levels of ethics and morals.
We strongly oppose this move and demand that Circular 80 and 82 of 2019 be withdrawn immediately before any further engagements with CMS on any of their Advisory Committees.
CMS must acknowledge that the Circular 80/82 of 2019 was erroneously issued and was an unwarranted attack on the medical & healthcare insurance industry, the workers, the poor, professionals and the experts who work within the industry including communities who benefit from these products the industry provides who will be most affected by CMS's irrational decision to scrap LCBO Exempted products.
As long as Circulars 80 and 82 of 2019 are still in effect, we call on all stakeholders across the healthcare industry to boycott any further discussions, initiatives or engagements sessions with the CMS. The CMS is opportunistically using this Advisory Committees and sessions as part of their claim to following due process and will use these Committees against the industry to carry on justifying their blatant attack on the LCBO industry.
As the HSF, we demand the opportunity to be allowed access and sight of the analysis data set referred to by the Council in order to establish how correct the conclusions are and what indeed the data indicates regarding to the circular 80/82 of 2019 LCBO decision. We are vehemently opposed to the Registrar and CMS’s views and opinions they use to discredit our sector.
The CMS and the Registrar have been unsuccessful in expanding healthcare to those most at risk. Instead of engaging with us, they have attempted to slander and cause a crisis by limiting private access to quality low cost healthcare. The CMS and the Registrar have no intention of finding a solution. They will continue to doggedly pursue their own agenda which in no way is to the benefit of the industry and communities that are desperate for access to affordable healthcare solutions.
In essence, the Registrar’s move results in job losses, lower GDP, lower tax revenues and effectively a poorer economy compared to if the primary healthcare market had to continue. Ironically because of this it also makes it harder for government to implement the NHI as the economy is in a relatively poorer state.
For more details regarding this letter please contact Lubabalo Mashiqana COMMUNICATIONS HEAD 071 911 8827.
We trust that you will find this in order.
Yours Faithfully,
HEALTHCARE STAKEHOLDERS FORUM | TASK TEAM
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I guess for now the committees were formed to provide input on the framework before it is submitted by CMS for approval. Report Abuse