Battle over medical aid benefits
IF YOU are a member of medical scheme, you may need to take note of what's happening in the courts.
An estimated hike of almost 20% in your medical aid tariffs may be at stake.
The legal tussle between the medical schemes on one side and the authorities, hospitals and other healthcare providers on the other focuses on prescribed minimum benefits (PMBs).
PMBs are conditions that medical schemes are legally obliged to cover. These include any emergency condition (for instance, if you need life-saving surgery after an accident) as well as 26 chronic diseases like asthma, diabetes, epilepsy and HIV/Aids.
While most medical schemes cover the treatment costs of these conditions in full, some have started to pay up to a certain level, as stated in the rules of the scheme.
Some industry representatives say PMB bills have rocketed because hospitals and other healthcare providers know schemes are obliged to pay for these treatments.
The Council for Medical Schemes (CMS) has now taken legal action to oblige all medical aids settle all the medical bills for these conditions. The law says these treatments have to be covered "in full".
In reaction, the Board of Healthcare Funders (BHF), which represents the medical aids, has taken the matter to court, claiming that "in full" means that the schemes have to pay out the level of coverage provided for in their own rules.
The Johannesburg High Court recently postponed the case after a number of other parties – including organisations representing medical specialists and pharmacists, as well as Medi Clinic - asked to intervene in the case.
Medi-Clinic ignored a request for comment and CMS spokesperson Aleksandra Serwa said that the matter is sub judice and her organisation cannot get into the merits of the case at this stage.
"Just to point out, the Medical Schemes Act has not changed and provisions on the prescribed minimum benefits have not changed either. Medical schemes must cover PMB conditions in full – this is the law," she added.
But Heidi Kruger of the BHF contests this and says that such an interpretation will hurt already vulnerable medical schemes and their members.
According to conservative estimates, the move could mean a 20% hike in medical claims, which will push up member contributions by more than 18%.
Some medical scheme industry members claim that hospitals and healthcare providers are hiking the costs of PMB treatments because they know the schemes are obliged to pay.
There is currently no limit on what medical practitioners and hospitals can charge.
Specialists who have no heart
Government's reference price list (RPL), which basically set a guideline base price for treatments, was scrapped in July. The Health Professions Council of South Africa used to have an "ethical price list", which set maximum rates (roughly three times the RPL), but it has also now been abolished.
Healthcare providers are now able to charge any outlandish amount, and medical schemes will have to pay it, she says. The result of this is an open-ended liability for medical schemes and their members, says Kruger.
This is a particular problem with specialists. There is a huge shortage of specialists, with long waiting lists, and they can basically charge what they want.
One of the priciest PMBs is emergency treatment for heart attacks and strokes. Triple bypass surgery can cost up to R150 000.
Len Deacon, principal officer of the TopMed medical scheme and board member of BHF, says that the viability of medical schemes is being threatened.
According to the Council for Medical Scheme's latest annual report, medical schemes are already paying out R2.5bn more than they get in from contributions, which could have a knock-on effect for members.
"Given that there are no ceiling prices on treatments, the financial impact of paying rising PMBs at whatever the provider wishes puts the member and the medical scheme at risk, which is why clarity is needed."
But Serwa says there is no evidence to support allegations that member contributions will have to be hiked, and that schemes will be threatened.
"The Council for Medical Schemes has in fact been asking for this evidence for the last few years."
A date for the new court hearing is expected to be set in the first quarter of 2011.