Medical Schemes Face "Unfair Burden'
Medical schemes are facing heavy fines over what the Council for Medical Schemes (CMS) claims is non-compliance with the regulations around minimum payments for medical treatment and services.In a recent strongly worded letter sent to medical funds and administrators, the CMS demanded that medical aids comply with the regulations or face the loss of their accreditation. But according to Blum Khan, CEO of Metropolitan Health Group, there is nothing "minimum" about the extent of the coverage, and the CMS' interpretation of the guidelines places an unfair burden on medical schemes.
"It is inconceivable that the Prescribed Minimum Benefits (PMBs) have allowed a situation where healthcare providers could charge any rate they wish in a setting where the PMB legislation imposes unlimited liability on the medical schemes," Khan said.
PMBs were first introduced to mitigate against medical schemes trimming benefits in critical areas of chronic conditions. In the past, medical schemes would manage the risks by using maximum annual limits for chronic medication, with the result being that members risked running out of benefits, thereby incurring huge expenses on their depletion.
"The reasons for PMB regulations remain valid," Khan said. "What needs to be reviewed urgently is how the tariffs for PMB conditions should be determined and whether the current extent of PMBs is in fact inhibiting the development of affordable healthcare for all South Africans."
Medical schemes are obliged to pay in full for the treatment of conditions that fall within the PMB guidelines. The problem arises because, according to current legislation, there is no limitation on the tariffs chargeable by health practitioners, thus turning the "minimum" payment by medical schemes into a moving target.
An additional problem is that there has been an inconsistent implementation of the international diagnosis coding system (version ICD-10).
"In order to identify the condition and hence to determine whether the condition is one of a PMB nature you need comprehensive and consistent adoption of the ICD coding system, and this is not happening," Khan said.
It is not difficult to see why PMBs in the current formulation and without effective risk equalisation across all schemes is unsustainable and may even lead to some schemes viability being challenged. According to Khan there is a solution.
"We have been challenged to establish a pricing structure and we seem to have done this successfully for medicines through the development of a single exit price system, the removal of bonusing and incentives for providers that pharmaceutical companies were engaging in.
"Surely we could follow a similar process to determine a fair pricing structure for the treatment of PMBs conditions," he said.
