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All eyes on medical schemes court verdict

Oct 02 2011 12:57 Nellie Brand-Jonker

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Cape Town - The health industry is holding its breath, waiting for a court decision on what medical schemes must pay for prescribed minimum benefits.

The matter was heard in the North Gauteng High Court in Pretoria on September 22 and 23 and Judge Cynthia Pretorius indicated that she would give her decision as soon as possible.

Medical schemes led by the Board of Healthcare Funders (BHF) and Samwumed (a medical fund for municipal workers) approached the court for an declaratory order on the payment of prescribed minimum benefits.

The first respondent is the Council for Medical Schemes (CMS) and the second the Minister of Health, who did not oppose the application.

A total of 12 parties opposed the application, including organisations representing doctors and pharmacists, Mediclinic and the Hospital Association of SA.

BHF spokesperson Heidi Kruger said the court had been approached for a declaratory order on the meaning of the words “pay in full”, as they appear in the regulations and act with regard to prescribed minimum benefits.

Since 2007 a dispute has existed between suppliers and medical schemes around the payment of prescribed minimum benefits because of differing interpretations of the act.

Regulation 8 prescribes that the medical scheme should pay in full for prescribed minimum benefits, without a requirement for any excess payment.

Suppliers are being accused of looking upon this as "blank cheque" to push up the prices of prescribed services and products.

Kruger said the BHF did not believe that the intention of the act was unfettered liability.

The fact that there is moreover no reference list aggravates matters, said Kruger.

Medical schemes might have to contend with runaway costs if they have to pay in full - the CMS's interpretation - because this would amount to unrestricted liability.

And this is an expense for which medical schemes cannot budget, “because they don't know what suppliers could charge", reckoned Kruger.

The parties opposing the order apparently argue that the legislation makes provision for medical schemes to enter into tariff agreements with suppliers.

Kruger says medical funds are not legally obliged to enter into such agreements.

"Bigger schemes would find it easier as they have bargaining power, but smaller schemes would find it more difficult.

"And because there is such a shortage of specialists it would be difficult to conclude agreements with them."

She said it was obvious that doctors will not enter into such agreements as long as they believe medical schemes will pay unlimited amounts.

The court application was the response to a circular from the CMS declaring that medical schemes should pay in full for services and products on the basis of invoices received it not in line with tariffs set down in schemes' rules.

Following an investigation by a task team, the CMS sent out another circular confirming its view.

Earlier this year a CMS circular had expressed concern that administrators and medical schemes were not complying with the requirements of Regulation 8 as regards payment of prescribed benefits and costs, although its view on the issue was clear.

All prescribed minimum benefits should be paid at cost or invoice price and it was unacceptable and illegal for members to be held responsible for excess payments, it said.

 - Sake24

For more business news in Afrikaans, go to Sake24.com.

 
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