Tag: medical aid schemes

Categories : Healthcare Politics and RegulationsTags :

CMS Provides Clarity over BHF’S Court Challenges

On By ModernMedia

Various stakeholders within the medical schemes value chain have sharply raised concerns over the unending court challenges brought by the Board of Healthcare Funders (BHF) against CMS. As an agile regulator, the CMS endeavours to clarify any misconception and confusion over BHF’s court challenges.

Chronology of Events

Initially, the main issue brought by BHF in this case was to request the court to grant them a general exemption for medical schemes to offer low-cost benefit options and to declare an alleged moratorium unlawful by the CMS and Ministry of Health in order to prevent medical schemes from offering low-cost benefit options.

In response, the CMS vehemently opposed the application on the basis that there was no moratorium as alleged by BHF and it would be thus unlawful to grant BHF a general exemption for medical schemes to offer low costs benefit options.

“It must be noted that while the main case/dispute was still ongoing (even after CMS submitted an extensive record of documents that were compliant with relevant information and documents having been exchanged between CMS and BHF), surprisingly BHF brought an interlocutory application alleging that CMS and the Minister were hiding certain information.”

Accordingly, the interlocutory application requested CMS and the NDOH to release an exhaustive list of documents which the CMS believed were irrelevant and had no bearing on the main application.

Despite CMS’s vehement contestation to the court on the additional requested documents by BHF, Judge Botha granted the BHF the order they sought, and the CMS, as well as the Minister of Health were ordered to produce the documents listed in Notice in terms of Rule 30A within 10 (ten) days of the Court Order, being 24 July 2023. 

Before the expiration of rule 18 of the superior court, CMS filed leave to appeal the court order of Judge Botha as CMS believed that the order was flawed in law and that the judge had no reasons for ordering CMS and the Minister to produce those documents.

While the CMS legal team was studying the order, BHF concurrently lodged a contempt of court on an urgent basis.

CMS, through its attorneys, moved swiftly and wrote to BHF urging them to withdraw the contempt application as the CMS had already lodged its leave to appeal the court order of Judge Botha and this meant that the court order by Judge Botha would been suspended. 

BHF refused to withdraw the contempt application and the application was heard on 8th August 2023 and the court dismissed BHF’s application on 10 August 2023 with costs in favour of CMS and Minister.

Citing Judge E van der Schyff who emphasised that “in the Practice Manual of the Gauteng High Court Division that while an application maybe urgent, it may not be sufficiently urgent to be heard at the time selected by an applicant” and also strongly highlighted that it does “not mean that applicants can indiscriminately approach the urgent court on the basis of extreme urgency without having regard to the context and facts of each individual application.”

Based on this order, the contempt application is now in our view moot or rather has been overtaken by the leave to appeal lodged by CMS and the Minister and CMS/NDOH. The leave to appeal will be heard somewhere September 2023.

The main application brought by BHF is likely to be heard in later parts of 2024.

Categories : Healthcare Politics and RegulationsTags :

High Court Ruling for Affordable Medical Scheme Benefits in South Africa not Adhered to

On By ModernMedia
Photo by Tingey Injury Law Firm on Unsplash

In the recent judgement handed down by the Pretoria High Court in favour of Board of Health Funders (BHF), the Council for Medical Schemes (CMS), Registrar of Medical Schemes and the Minister of Health were ordered to deliver a complete record, which will shed light on the moratorium on granting exemptions to medical schemes to provide LCBO benefits.  The order directed the CMS and the Minister of Health to deliver all documents or information requested under Rule 30A within 10 days of the order, but all the respondents failed to meet the deadline.

After the ten-day deadline had passed and noting that the documents were still not produced and there was no appeal to the court order, the BHF was forced to return to court to seek answers. The BHF filed a contempt of court order on an urgent basis. In this application, the BHF highlighted that no complete record had been submitted even though the deadline for the Minister of Health and CMS to do so was on 24 July 2023. In response, the CMS and the Minister of Health opposed the contempt of court action and appealed the rule 30A judgement delivered on 10 July 2023. The Minister of Health, acting through his attorneys, allowed his own team to submit certain documents in terms of rule 30A, and the attorneys have stated that the delivery of the documents demonstrates good faith. This is despite the appealing of the judgement and order delivered in the rule 30A application.

The legal battle against the CMS and Minister of Health not only highlights their failure to comply with the court’s order, but also raises concerns about transparency and accountability within the healthcare system. This delay not only hampers the progress towards implementing affordable healthcare solutions, but also undermines public trust in the decision-making process of these regulatory bodies.  This lack of adherence to court orders highlights the urgent need for effective enforcement mechanisms to ensure that court decisions are respected and implemented by the relevant parties.

Categories : Healthcare Politics and RegulationsTags : 1 Comment

Council for Medical Schemes Approves 5% Increase – but no Details on Low-cost Options

On By ModernMedia

In a media briefing on Tuesday, 8th August, the Council for Medical Schemes (CMS) sought to clarify its process and recommendations over the approved 5% increase to medical aid scheme contributions, levels above which the medical schemes must motivate for. As for low-cost benefit options (LCBO), the CMS indicated that they would only provide a report to the Health Minister by the end of the month. This could prevent medical schemes from applying for new LCBOs in 2023.

Mr Mondi Govuzela, Senior Manager of Benefits Management, explained that the 5% approved increase is based on the Consumer Price Index (CPI) for 2022, which indicated a 4.9% increase. Schemes therefore may raise contributions by 5%, in line with the Reserve Bank’s inflation prediction for 2024. A prudent percentage markup should be incorporated to take into account cost increases and demographic changes, he advised. Before COVID, contribution increases have typically been 2.4–5% above CPI. The years 2020 to 2022 saw contribution increases dip below CPI.

One of the cost drivers that Mr Govuzela noted in the media briefing was supplier pressure stemming from fewer doctors and specialists, who were pushing for higher remunerations. Increased costs elsewhere in the healthcare industry. On the member side, growing rates of chronic diseases, membership ageing and coverage for medical services also added pressure.

LCBO would appear to be a solution for many individuals to access private healthcare for at least some urgent conditions, but the CMS has yet to comply with a Pretoria High Court ruling ordering that they provide a report on their moratorium on granting exemptions to medical schemes to provide LCBO benefits. The case was brought by the Board of Health Funders (BHF).

As to what the CMS’s response to the LCBO ruling was, CMS Registrar Dr Sipho Kabane said that the CMS was preparing a report that would be delivered to the Health Minister “by the end of the month”, but would not be drawn on what it might say. The deadline for registering new benefit options is September 1.

In their circular explaining the decision increase, the CMS acknowledged the persistent macroeconomic headwinds facing medical schemes and their members, with a meagre 1% increase predicted for SA’s GDP next year. “Against the backdrop of the current adverse macroeconomic conditions characterised by multi-year higher interest rates due to stubbornly higher inflation rate, volatile domestic currency and surging energy prices and overall lacklustre economic growth, it is evident that most household budgets will remain constrained for a foreseeable future, leaving most consumers under a precarious financial position. To cushion members of medical schemes against further financial distress and the probable risk of losing their health insurance cover due to affordability constraints, medical schemes are advised to limit their cost increase assumptions for contribution increases for the 2024 benefit year to 5.0%, in line with CPI.”

Categories : Healthcare Politics and RegulationsTags :

High Court Ruling Paves the Way for Affordable Medical Scheme Benefits in South Africa

On By ModernMedia
Photo by Bill Oxford on Unsplash

The recent judgement by the Pretoria High Court in favour of the Board of Health Funders (BHF) carries substantial implications for medical schemes in South Africa. This follows BHF’s court application, which sought to compel the Council for Medical Schemes (CMS) to give a complete record, providing light on the LCBO’s decision-making process thus far.

The Court ordered the Minister of Health and the CMS to provide all of the papers listed in Rule 30A within 10 days of receiving the applicant’s notice of motion. The completion of this crucial milestone hinges on the provision of several documents, which we eagerly await.

This significant victory brings us closer to the ultimate goal of granting Medical Schemes exemptions to offer Low-Cost Benefit Options (LCBOs), which aim to provide greater access to affordable medical scheme benefits for low-income earners. The BHF’s success aligns with the mission of improving
healthcare accessibility and advancing progress towards universal healthcare coverage (UHC) in the country.

In the main application lodged on 8 August, the BHF requested the High Court to:

  • Lift the moratorium that prevents medical schemes from offering LCBOs when the Council for Medical Schemes (CMS) refuses to grant applications for exemptions to medical schemes, pending the finalisation of LCBO guidelines.
  • Declare the failure by the respondents to develop and implement LCBO guidelines as irrational, unreasonable, and unlawful, as per Section 6 of the Promotion of Administrative Justice Act and Section 1(c) of the Constitution.

The BHF represents the majority of the country’s medical schemes and healthcare funders, encompassing schemes and administrators serving nearly 4.5 million individuals.

According to Charlton Murove, the protracted process of crafting a framework for Low-Cost Benefit Options has taken over seven years and is yet to be finalised. Many policymakers have criticised medical schemes for their lack of affordability. The proposed solution aims to address these concerns and move closer to the principles of UHC, ensuring that the healthcare system grants everyone access to quality and affordable healthcare.

Murove stated, “This application seeks to drive a progressive agenda for the public and private healthcare sectors, fostering collaboration to alleviate the current challenges in our healthcare system. The Council for Medical Schemes and the Minister have pivotal roles in implementing policies that enhance access to healthcare. However, progress with LCBOs has been hindered by the CMS’s failure to take the necessary steps for reform, despite the publication of demarcation regulations in 2016.”

The BHF’s victory in the High Court represents a significant step forward in the pursuit of affordable and accessible medical scheme benefits. By addressing the current burdens faced by the state and ensuring that medical scheme premiums remain affordable, we can strive towards a healthcare system that benefits all South Africans.

Categories : General Interest Medical IndustryTags :

AcciCare and Standard Bank Partnership Makes Private Medical Care Accessible to all Commuters

On By ModernMedia

Public transport is used by more than 10 million commuters in South Africa every day. It’s how people get to work, how they get to the grocery store, how they get their children to school. It’s quite simply a way of life.

For many of these commuters, there is no alternative to minibus taxis. They are an indisputably dominant pillar of the informal public transport system, but they are also notoriously unsafe. The constant threat of an accident is a real concern for commuters, especially those who cannot afford private medical aid.

“We live in a country where 73% of the population doesn’t have access to private medical aid. Couple this with the high number of road accidents in South Africa, and what recourse do the vast majority of commuters have if they are involved in a road accident?” asks Rikus Scheepers, managing director at AcciCare Medical Service Providers.

AcciCare is a medical funding company that assists people who do not have medical aid, to get access to private hospital care when they are involved in a motor vehicle accident. Scheepers started AcciCare in 2017, with the intention of making private medical care accessible to all commuters.

“We started AcciCare in a few hospitals and had limited capital to work with but soon realised the extensive need for this type of service. As a start-up without a long trading history, it became impossible to grow the business to meet the demand. We needed a business partner who shared our vision to supply this essential service throughout the country, and so we approached Standard Bank,” says Scheepers.

“AcciCare is a unique concept not offered in South Africa,” says Jocelyn Hamilton at Standard Bank. “When they approached us for finance we had to apply some out-the-box thinking in order to provide a working capital solution that would enable the business to grow and expand into more provinces in the country.”

In the event a person is injured in a motor vehicle accident, AcciCare will assist treating doctors and hospitals to collect and complete the correct documentation in order for medical costs to be claimed back from the Road Accident Fund (RAF). AcciCare provides financial assistance to these service providers, so they don’t carry the costs while waiting for the RAF to settle accounts.

“We firmly believe that all commuters should have access to private medical care when they need it the most. Through our partnership with Standard Bank we are expanding our footprint and we have exciting initiatives in place for 2023, to educate more people about the reliable private care that is available to them,” says Scheepers. “Together with Standard Bank, AcciCare has saved countless lives and has significantly improved the quality of life of those who have unfortunately been involved in a motor vehicle accident.”

“Our business banking model is centred on partnering with clients to grow their businesses in the communities in which they exist. While we came in as a working capital solution that would see AcciCare achieve their vision, in return we indirectly partnered in improving the long-term quality of life for those unfortunate enough to be in need of medical care at critical times. We hope to continue with this partnership, as they take their business to new heights,” says Hamilton.

Categories : Expert Opinion Medical IndustryTags :

Act Now to Stop the Bleed on Medical Schemes Industry

On By ModernMedia

By Junior Biola

Last year, fraud and abuse of medical aids resulted in a loss of R22 billion for medical scheme funds according to The Board of Healthcare Funders – a loss which could be avoided with the implementation of fraud mitigation services.

Medical aid fraud is certainly nothing new: for years, medical schemes have railed against members collaborating with medical practitioners – from doctors to pharmacists – for personal gain. There are the members who convince practitioners to admit them to hospital, for example, and pocket the monies received from their hospital cash back plans; the pharmacists who bill their customers for ‘medicine’, when their baskets are in fact filled with non-medicinal items; or even the practitioners who bill patients for treatments which never take place.

Since the advent of the Covid pandemic, such activities have escalated. In fact, it is no longer rogue pharmacists or practitioners taking advantage of medical aids; the industry is now affected by dishonest members and criminals using stolen cards to deplete medical savings accounts or take advantage of benefits.

The results are catastrophic for an industry which is frequently accused of charging members exorbitant fees. In truth, players are under siege from the steeply rising costs of healthcare, and while they are doing their best to limit the impact on members, this is no easy task when those very members are, in effect, stealing from the scheme through fraudulent claims.

The impacts are far-reaching for all stakeholders. Medical funds have no choice but to raise the price of contributions – after all, they need to maintain a steady pool of funds in order to be able to pay out claims, and if members are dipping into that pool for illicit reasons, it needs to be replenished. Naturally, this affects members severely, especially as many are already challenged by the rising cost of living. On the other side of the equation, practitioners also take a hit: when the pool of medical funds decreases, a less profitable practice is inevitable.

The prevalence of fraud is understandable when you consider that few controls are in place to prevent it. Think of the average consumer entering a retail chain pharmacy, for example: they may be asked to present their loyalty card, and while this may be considered a form of identification, the reality is that it is rather ineffective as a verification tool. The absence of an identification photo means that the purchaser could well be someone besides the patient for whom the script was written; nor is there anything to stop them from adding over-the-counter items to purchase and claiming them from their savings.

The good news? Fraud mitigation is both effective, and simple to implement. Establishing a ‘safety net’ of identity and biometric recognition makes it possible for medical schemes to ensure that members claim only for medicines and treatments they have been prescribed, while also protecting against scripts that have been falsified.

The result? A healthier medical aid industry – for the benefit of all.

Junior Biola is CEO of Johannesburg-based fintech company, Bitventure, a provider of state-of-the-art real-time automated verification and payment solutions. www.bitventure.co.za

Categories : Healthcare Politics and RegulationsTags : 1 Comment

Will NHI Mean the End of Medical Aid in South Africa?

On By ModernMedia

Once again, concerns are being raised over the implementation of the proposed National Health Insurance (NHI) scheme. This time, it is over the future of private healthcare and medical aid under the contentious Section 33 of the Bill.

Many previous discussions have focused on the NHI’s affordability, accountability, the potential mass flight of healthcare professionals from the country, and even whether NHI is even possible to achieve given South Africa’s challenges.

In a new healthcare stakeholder opinion report [PDF] published by Section 27 and the Concentric Alliance on Monday, 20 June, it is noted that private healthcare is a major contributor to the economy. May public and private sector respondents believe it could play a significant role in achieving health reform thanks to its resources and capacity.

However, Section 33 of the NHI Bill states that medical schemes may only provide “cover that constitutes complementary or top-up cover and that does not overlap with the personal health care service benefits purchased by the National Health Insurance Fund on behalf of users”.

This basically means medical schemes which are not gap cover will no longer operate – something which does not sit well with the private sector respondents in the report, who argue that even in countries with the best developed public health systems, private healthcare funders still exist.

A carrot vs stick approach

An academic respondent suggested incentivising people into switching to a public healthcare funder, rather than removing private healthcare funding. A private sector respondent also suggested the idea of competition with private funders as a means to improve the NHI’s efficiency. Indeed, it may even be necessary the NHI to function well.

The report makes note of Section 33 of the NHI Bill becoming “something of a hill to die on”. The report says that “During the six-a-side engagements between Business Unity and the National Department of Health, urgent discussions on NHI were nearly derailed by demands that Section 33 be re-opened for discussion and one respondent in the NDOH stating that the Bill was now before parliament. This respondent stated that they would rather see this point litigated, than back down. The current approach to this draft provision has the potential to undermine the implementation of the NHI and delay urgent reform to the health system.”

Categories : Healthcare Politics and RegulationsTags :

A Trend of Amalgamations is Underway for Medical Schemes

On By ModernMedia
Image by Gustavo Fring on Pexels

A trend of amalgamations is underway in the South African private healthcare industry, in the face of growing challenges and the impending introduction of National Health Insurance (NHI).

Escalating healthcare inflation and costs, a declining and ageing membership, the impact of the COVID pandemic and a growing burden of disease are all impacting the not-for-profit Medical Scheme industry, which is highly regulated.

Medical scheme consolidation is one of the prominent trends, particularly given the prospect of NHI on the horizon, where smaller schemes will not compete, said Lee Callakoppen, principal officer of Bonitas Medical Fund.

The Council for Medical Schemes (CMS) advises that schemes that cannot compete sustainably on price should consider amalgamation partners, Callakoppen said.

“The trend towards amalgamations is not only for the sustainability of the medical scheme but for the benefit of members who ‘own’ the fund’.

“It is not only the call from CMS for schemes to join forces but also strict regulations around minimum solvency ratios and reserves which are more difficult for smaller schemes to maintain.”

It is a requirement of the Medical Schemes Act that medical schemes shall at all times maintain their business in a financially sound condition. They need to have sufficient assets for conducting business, providing for liabilities and having the prescribed solvency requirements of 25%, said Callakoppen.

“It’s a big ask for small schemes in this volatile and uncertain healthcare market,” he said.

A trend of amalgamation for small schemesThe CMS provides regulatory supervision of more than 80 medical schemes registered in the country and oversees amalgamation prospects.

One proviso for amalgamation is that schemes should complement each other and provide a more comprehensive offering to members.

“One clear indicator of risk is the size of the pool of lives being covered,” said Callakoppen. “Schemes with smaller risk pools are struggling to survive and experience more volatile claims”.

“Amalgamation into a bigger scheme means cross-subsidisation of costs. It is a trend I believe will continue, if not accelerate. In fact, in the past decade, we have seen 28 amalgamations approved by the CMS and the Competition Commission.”

The NHI has been criticised for potentially stifling innovation in healthcare, as well as not actually being able to fix the country’s flawed and unequal healthcare system.

Source: BusinessTech