BHF responds to ‘Medical aid battle’ reported in The Times

According to an article published in The Times today (6 March 2014), medical scheme members could find their cover reduced if a legal battle to have the prescribed minimum benefits (PMBs) capped is successful. The article states that the South African Municipal Workers' Union Medical Aid (SAMWUMED) and Genesis Medical Scheme have taken Minister of Health, Aaron Motsoaledi, to court to have the regulation requiring cover of prescribed minimum benefits - irrespective of the cost - struck down.

However, SAMWUMED has taken issue with the article. “No journalist from the publication called us to validate any facts,” said principal officer, Neil Nair. “We would appreciate a correction to the article. SAMWUMED has decided to withdraw from the High Court application in the matter of having Regulation 8 set aside.  The main reason for this decision was to allow the Minister an opportunity to amend Regulation 8.  To this end a Task Team has been established by the national Department of Health – of which SAMWUMED is a participant.  Further to this, we expect a more expeditious resolution to the problems brought about by the current interpretation of Regulation 8. SAMWUMED is also encouraged that the Board of Healthcare Funders (BHF) is actively engaging with the Department on this matter. This decision shall be reviewed by the SAMWUMED board based on developments.”

The Department of Health is currently reviewing proposed amendments to Regulation 8, which requires all PMB-related benefits to be paid in full by medical schemes, regardless of what the provider chooses to charge. “We hope to reach a solution that will be fair to patients, providers and funders,” said deputy director-general of health, Dr Anban Pillay.

The article quotes Christoff Raath, joint CEO of Insight Actuaries whose analysis is cited in the court papers, as saying that some specialists charge significantly more for PMB procedures than for illnesses not covered by the minimum benefits. Raath said that it was not illegal for doctors to charge what they wished. However, the law that their costs will be covered in full removes the incentive for doctors to enter into price negotiations with medical schemes - and negotiations on price are needed to keep costs down.

That providers can charge whatever they choose for PMB-related conditions (diagnosis, investigation, treatment and hospitalisation) is a serious issue for the BHF, which represents some medical schemes including SAMWUMED. The article states that the BHF ‘tried to get the benefits struck down in 2011 but was disqualified on a technicality’, which is a gross misrepresentation of what in fact took place. CEO Dr Humphrey Zokufa has expressed his grave concerns at the article’s unfortunate handling of an important and sensitive issue. “The narrative is distorted and has needlessly whipped up much negative emotion by suggesting that we are attempting to disadvantage the consumer, when we are actually working to their benefit,” he said.

The BHF is wholly supportive of the principles underlying the PMBs. “The problem lies with the implementation of the law,” said Zokufa, “which has had unintended consequences. If schemes are compelled to pay in full, regardless of what providers charge, that would constitute irresponsible and wasteful utilisation of members’ premiums. That there is no regulation or guidance currently applicable to what providers can charge makes the schemes vulnerable to abuse. The outcome has been a vicious circle of escalating premiums and reduced benefits that disadvantage the consumer.”

“Our court action in 2011 was therefore undertaken with a view to getting an independent, neutral legal opinion on the interpretation of Regulation 8’s ‘pay in full’ clause, as opposed to that of the Council for Medical Schemes, which we feel is erroneous. A scenario that gives providers a blank cheque is untenable and unsustainable. There is a gap here that needs to be closed and this was the issue at the heart of our legal action in 2011, not an attempt to have benefits ‘struck down’. We are hopeful that the amendments currently being discussed with the Department of Health will address matters, meaning that from the BHF’s perspective there is now no need for further legal action, hence SAMWUMED’s withdrawal of its application. I cannot underscore enough my regret that this irresponsible and misinformed article should have raised so much negative emotion unnecessarily.”

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