What's realistic?

Medical schemes and the industry regulator have turned to the law to resolve their battle over prescribed minimum benefits (PMBs). In September the Board of Healthcare Funders (BHF) is taking the Council for Medical Schemes (CMS) to court over the definition of PMBs. At issue is regulation 8 of the Medical Schemes Act, which says PMBs must be paid for "in full" and at cost by medical schemes. The BHF says the PMB package, covering 270 medical and 25 chronic conditions, is orientated towards high-cost hospital and specialist treatment, and has the potential to bankrupt the R85bn industry. Medical schemes want PMB payments to be based on scheme rates and not service provider rates. BHF MD Humphrey Zokufa says the current PMB definition is a blank cheque for service providers to charge as they please in the absence of tariff regulation in the healthcare industry. He says if the body representing medical schemes and administrators were to meet the CMS requirement, it would eventually bankrupt medical schemes. Zokufa said the board of trustees of each scheme was expected to spend member money prudently. If they adhered to this they would be recklessly spending membership money. It was on this basis that the BHF has applied for a declaratory order from the high court, he said.

The regulator argues PMBs protect members against incidents where individuals lose their medical scheme cover in the event of serious illness. CMS registrar Monwabisi Gantsho says medical schemes must pay for PMBs without members paying any additional costs. He said there was no evidence that healthcare costs of PMBs were unaffordable, adding that the council was still waiting for funders to prove there had been service-provider abuse. Until the law is changed the regulator says it will enforce the requirement. It recently sent a letter to medical scheme administrators threatening a review of their administrator licences if they did not comply with PMB law. Zokufa says they would have preferred reasonable behaviour from the CMS, to not enforce their PMB interpretation pending a high court ruling. Health Minister Aaron Motsoaledi has decided to allow the regulator and funders to find their own solution. He said that whoever won, it would not change the system, as the crux of the issue was to look at what costs what and whether it was realistic.

Xolile Bhengu: The Financial Mail, 15 July 2011