According to the Council for Medical Schemes (CMS) proposed amendments to Regulation 8 of the Medical Schemes Act aims to assist both members and the schemes. The regulation pertains to prescribed minimum benefits (PMBs).
The CMS explained: “PMBs include 270 serious health conditions, any emergency condition, and 25 chronic diseases. Regulation 8 of the Act explains that concerning PMBs, the medical scheme must pay in full, without co-payment or the use of deductibles, the diagnosis, treatment and care costs of the PMB conditions.”
The regulation was designed to offer maximum protection to members of schemes irrespective of which option they are on.
The CMS said that PMBs aim to ensure that when members face catastrophic healthcare events it does not ruin them financially.
“It also aims to avoid incidents where individuals lose their medical scheme cover in the event of serious illness and the consequent risk of unfunded utilisation of public hospitals, and to encourage improved efficiency in the allocation of private and public healthcare resources,” said the CMS.
Regulation 8 of the Medical Schemes Act
Regulation 8 of the Act states that medical schemes must cover PMBs, however, there are methods in place to allow the schemes to manage the cost of the treatment for these PMBs in an effective manner.
The Medical Schemes Act “was introduced with the specific intention of providing medical scheme members with access to care, protection from being risk-rated, full cover for a minimum set of benefits, and enabling members to utilise private healthcare facilities,” revealed the CMS.
Dr Jonathan Broomberg, Discovery Health CEO elaborated: “Schemes may establish Designated Service Provider (DSP) networks to supply these services in order to pay for these services at a pre-agreed rate. Where members use non DSPs on a voluntary basis, members may be faced with co-payments. However, where use of a non DSP is involuntary (due to life threatening emergency or lack of access) the scheme is currently obliged to fund PMB treatments in full, regardless of the amounts charged by the practitioner. This obligation presents an unpredictable obligation for schemes as there was no limit to what a provider could charge.”
In addition, medical schemes also make use of “drug formularies and other tools such as managed care interventions, protocols and the requirement to obtain pre-authorisation before services are rendered” to manage the cost of the treatment, revealed the CMS.
More certainty for schemes
“The intention of the recently published draft regulations is to establish more certainty about the obligations of schemes with respect to these conditions. The implication of the proposed regulations is that when health professionals treat any PMB condition, medical schemes are only obliged to pay the health professional at an agreed rate, or where there is no agreement, the scheme is only obliged to pay the 2006 NHRPL rate inflated by CPI,” explained Broomberg.
He added: “It is not however clear what the implications of this regulation are for the ability of health professionals to set their own charges for treatment of PMB conditions. One interpretation, which appears to be the intention of the National Department of Health (NDoH), is that health professionals will remain free to set their own charges for PMB treatments.”
Broomberg said that if this is the correct interpretation, it does mean that where schemes do not have payment arrangements, members of those schemes might face more frequent and perhaps higher co-payments, since doctors will continue to charge at above the scheme rate (generally equivalent to NHRPL 2006 inflation adjusted) for all services.
This means that schemes will no longer be obligated to pay these fees in full for treatment of PMB conditions.
According to Broomberg, one of the possible impacts of the introduction of these amendments to Regulation 8 would be that tariff prices might increase.
“If the regulations are implemented as proposed, those schemes which have not implemented contracted payment arrangements would now have to decide whether to increase their tariff costs by introducing payment arrangements, in order to avoid their members experiencing PMB co-payments.
“It may also encourage those providers who have not entered into such contracts to join contracted payment arrangements, since they may otherwise face an increase in bad debts and collection costs as they will have to collect co-payments much more frequently,” said Broomberg.
Hospital account changes
In addition to amendments to Regulation 8 of the Act, amendments have also been proposed to Regulation 5 of the Act.
“Regulation 5 of the Medical Schemes Act currently sets out all the details that must be included in an account from the supplier of a health service to a medical scheme. This new amendment adds a clause requiring the submission of a discharge summary together with an account for hospital care,” explained Broomberg.
A discharge summary is a way of capturing a patient’s diagnosis and care that is internationally recognised. It is also important for the effective monitoring of the patient.
According to Broomberg, “This is a very positive development and is based on recommendations from the industry to the National Department of Health (NDoH). This will provide Discovery Health (DH) and its client schemes with a much richer set of clinical data on hospital treatments. We will be able to use this data to improve HealthID, to strengthen our efforts to improve quality of care, and in some instances, to make claims risk management more effective as well.”
For the reactions to the proposed changes from healthcare professionals, click here.