Cape Town - The health industry is holding its breath,
waiting for a court decision on what medical schemes must pay for prescribed
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
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
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
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
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
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
Following an investigation by a task team, the CMS sent out another circular confirming its
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.
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