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Proposed amendments to section 8 of the Medical Schemes Act of 1998

August 17, 2015

Chartered Employee Benefits comments on Aaron Motsoaledi proposed amendments to section 8 of the Medical Schemes Act 0f 1998. Click here to access the link.

Section 8 of the Medical Schemes Act states that emergency care, certain chronic conditions and certain types of cancer (referred to as Prescribed Minimum Benefits) must be covered in full by all registered medical schemes. The health minister’s proposed amendment seeks to adjust this legislation and provide a cap to the amount that medical schemes need to pay when paying for a PMB.

The main reason for this type of amendment is an attempt by the minister’s office to try to control the cost of care provided by medical practitioners. Currently, there is no regulation on healthcare providers and what they are permitted to charge for their services. As a result, medical schemes in South Africa have designed specific medical aid rates for procedures using procedure codes and diagnosis codes commonly known as ICD-10 codes. However, the current act supersedes the medical aid rates when it comes to paying for PMBs.

It is the view of the minister’s office (and many others) that, as a result of this legislation, providers are taking advantage and increasing the cost of their services, with the rationale that they need to be reimbursed in full. This creates a risk to medical schemes and is a contributing factor to the ever increasing medical inflation. It is our contention, however, that most medical schemes don’t pay PMBs in full; unfortunately this does not stop providers from inflating their prices.

We at Chartered believe that although this is a step in the right direction, the amendment needs to be carefully considered and a wider range of industry experts needs to be consulted.

If this amendment is passed, it ultimately means that members will bear the brunt of claims not covered in full by medical schemes. The real issue, though, is the rate at which medical costs is on the increase, hence this proposed amendment. We all need to have an open mind when it comes to regulation and we believe that the Council for Medical Schemes has members’ best interests at heart.

Ultimately the key is balance.  It is our hope that the minister’s office – in consultation with the Council for Medical Schemes – can come to some resolution in regard to  this complex problem.

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