Introduction
Regulation 8 of the Medical Schemes Act 131 of 1998 deals with Prescribed Minimum Benefits (PMBs) for a range of 270 medical conditions [1]. Every medical aid scheme must cover all these conditions. Specifically, Regulation 8 sets out rules for the payment for expenses of the diagnosis, treatment and care costs of a PMB benefit condition. These payments are met by the medical aid scheme with copayments by members under certain conditions
A draft amendment was circulated by the Department of Health on 14 July 2015. Neil Nair of Principal Officer of SAMWUMED [2] has described it as follows:
The fundamental implication of the amendment, when passed by Parliament, shall mean that all registered healthcare providers subscribe to a regulated tariff.
But what the amended regulation means is not luminously clear. We have struggled to interpret it and we offer our understanding below. If we have it wrong, we would welcome correction.
Regulation 8 states (amendment in italics):
(1) Subject to the provisions of this regulation, any benefit option that is offered by a medical scheme must pay in full, without co-payment or the use of deductibles, the diagnosis, treatment and care costs of the prescribed minimum benefit conditions.
(2) Subject to section 29 (1) (p) of the Act, the rules of a medical scheme may, in respect of any benefit option, provide that— (a) the diagnosis, treatment and care costs of a prescribed minimum benefit condition will only be paid in full by the medical scheme if those services are obtained from a designated service provider in respect of that condition;
(b) a co-payment or deductible, the quantum of which is specified in the rules of the medical scheme, may be imposed on a member if that member or his or her dependant obtains such services from a provider other than a designated service provider,
provided that no co-payment or deductible is payable by a member if the service was involuntarily obtained from a provider other than a designated service provider and:
either
(i) in respect of any service rendered by a health care professional who is registered with the Health Professions Council of South Africa, medical schemes are liable for payment for services in accordance with the billing rules and the tariff codes of the 2006 NHRPL tariffs published by the Council, the Rand value of which has been adjusted annually in accordance with the Consumer Price Index as published by Statistics South Africa;
or
(ii) schemes may negotiate alternative tariffs with any provider of any relevant health service for which no co-payment or deductible is payable by a member
(3) For the purposes of sub-regulation (2) (b), a beneficiary will be deemed to have involuntarily obtained a service from a provider other than a designated service provider, if— (a) the service was not available from the designated service provider or would not be provided without unreasonable delay; (b) immediate medical or surgical treatment for a prescribed minimum benefit condition was required under circumstances or at locations which reasonably precluded the beneficiary from obtaining such treatment from a designated service provider; or (c) there was no designated service provider within reasonable proximity to the beneficiary’s ordinary place of business or personal residence.
(4) Subject to sub-regulations (5) and (6) and to section 29 (1) (p) of the Act, these regulations must not be construed to prevent medical schemes from employing appropriate interventions aimed at improving the efficiency and effectiveness of health care provision, including such techniques as requirements for pre-authorisation, the application of treatment protocols, and the use of formularies.
(5) When a formulary includes a drug that is clinically appropriate and effective for the treatment of a prescribed minimum benefit condition suffered by a beneficiary, and that beneficiary knowingly declines the formulary drug and opts to use another drug instead, the scheme may impose a co-payment on the relevant member.
(6) A medical scheme may not prohibit, or enter into an arrangement or contract that prohibits, the initiation of an appropriate intervention by a health care provider prior to receiving authorisation from the medical scheme or any other party, in respect of an emergency medical condition.
The logic of Regulation 8 as amended:
Expenses incurred by a medical aid scheme member for a PMB condition are met by the scheme, with or without a copayment by the member. Our understanding of the logic that the amended Regulation 8 sets up can be put as follows:
1. Does the medical aid scheme designate service providers?
If the answer is NO, there is no copayment by the member.
If the answer is YES, go to Question 2.
2. Was the service provided by a designated service provider?
If the answer is YES, there is no copayment by the member.
If the answer is NO, go to Question 3.
3. Was the choice of a non-designated provider voluntary (see subsection 3 above)?
If the answer is NO, there is no copayment by the member.
If the answer is YES, go to Question 4.
4. Has the medical aid negotiated an alternative tariff with the non-designated provider?
If the answer is YES, there is no copayment by the member (see subsection 2(b)(ii)).
If the answer is NO, a copayment equal to the difference to the fee charged by the provider and the NHRPL tariff is due from the member.
What does this mean for medical aid scheme members?
The regulation as amended means that in most cases, a member of a medical aid scheme will not have to make a copayment for expenses incurred for a PMB condition. The exception is when a member of a scheme with designated service providers chooses a non-designated provider voluntarily and the scheme has not negotiated an alternative tariff with that provider.
Accordingly, we are puzzled by the SAMWUMED statement. We don’t see that the amended regulation 8 was implying that all registered healthcare providers subscribe to a regulated tariff. For one thing, different medical aid schemes may set different tariffs for the same service when they designate service providers. Secondly, when medical aid schemes negotiate with non-designated service providers, new differences in tariffs may emerge. Thirdly, non-designated service providers with no medical aid scheme contracts remain free to set their own tariffs.
Rather, it seems to us that the main effect of the amendment is to establish a minimum medical aid scheme contribution (equal to the NHRPL tariff) in cases where copayments are required. This was not done by the unamended regulation 8. Of course, the amendment like the current regulation 8 means that the consumer may have to meet large co-payments under certain circumstances [3]. In a July interview with the Department of Health Head of Regulation and Compliance, Anban Pillay, stated that patients did face risks but he assured the Board of Healthcare Funders that consumers would be protected [4].
Umunyana Rugege from Section 27 has observed that medical aid scheme members will no longer have the certainty as to whether their emergency, chronic conditions or cancer illnesses will be paid in full [5]. She went on to state that the Minister of Health’s proposals have not been accompanied by any policy documents or analysis of the medical schemes industry. Section 27 also stated in a press statement issued on 24 July that, even though the amendment does refer to the 2006 NHRPL Tariff, this tariff was intended to be an interim measure, and, even at the time when it was introduced, it did not reflect the actual cost of providing health care services. [6].
On our interpretation, medical aid members will be able to avoid copayments if they wish to. Where service providers are designated, their use will not attract copayment. Moreover, copayments will not be required if, in an emergency, a non-designated provider has to be used. In non-emergency situations, medical aid members will have to weigh up the benefits of using a non-designated provider against the cost of copayments. This calculation will be made if a member expects superior service from a non-designated provider.
More controversy around regulation 8 and PMBs
The Genesis Medical Scheme wants the Cape Town High Court to get rid of the requirement that schemes pay for the prescribed minimum benefits in full. Genesis states that the regulations under the Medical Schemes Act have no legal standing, since they go beyond the powers afforded to the Minister. Genesis CE Brian Watson said that “a better question to ask is: are doctors charges justified? The real issue is doctors are being given a blank cheque” [7]. Some believe that Genesis has gone to Court on the basis that it faced potentially ruinous claims for PMB conditions; however this was denied by Mr Watson [8].
The South African Private Practitioners Forum is challenging Genesis’s Court application and a multitude of parties, including the Council for Medical Schemes, Hospital Association of South Africa and the South African Private Practitioners Forum have also applied to oppose such an application. Treatment Action Campaign (TAC), South African Depression and Anxiety Group (SADAG) and People Living with Cancer (PLWC) have applied to be friends of the court in this matter. These groups argue that the Minister has the power to make regulation 8 and that regulation 8 is necessary to give effect to the right to access healthcare services under section 27 of the Constitution [9].
Dr Archer from the South African Private Practitioners Forum stated that the amendments offered protection to medical schemes at the expense of the consumer as it allowed them to limit their exposure to a reimbursement rate set in 2006 (as stated above) [10].
Conclusion
Regulation 8 and the proposed amendments have attracted criticism by various stakeholders. It seems to us that this amendment is intended to balance protection of members against the protection of medical aid schemes in light of very high claims. Will it work? Only time will tell.
Arvitha Doodnath
arvitha@hsf.org.za
Legal Researcher
Sources:
1. http://www.medicalschemes.com/medical_schemes_pmb/
2. http://www.health24.com/Medical-schemes/News/Medical-Schemes-Act-proposed-amendments-to-PMBs-20150721
3. Council for Medical Schemes speaks on prescribed minimum benefits by Tamar Kahn accessible on: http://www.bdlive.co.za/national/2015/07/31/council-for-medical-schemes-speaks-on-prescribed-minimum-benefits
4. Ibid.
5. Medical aid change to benefit funders by Tamar Kahn accessible on: http://www.bdlive.co.za/national/health/2015/07/20/medical-aid-change-to-benefit-funders
6. Hands off our PMBs by Section 27 issued 24 July 2015 accessible on: http://section27.org.za/2015/07/patient-groups-hands-off-our-pmbs/
7. Doctors and Genesis scheme in benefits row by Tamar Kahn accessible on: http://www.bdlive.co.za/national/health/2015/08/13/doctors-and-genesis-scheme-in-benefits-row
8. Ibid.
9. Note 5 above.
10. Ibid.
