The battle for medical benefits

Disagreement over how to handle these contentious claims may leave members out in the cold, writes Neesa Moodley-Isaacs

Christoff Raath, an actuary and CEO of The Health Monitor Company, has revealed that some medical specialists have been overcharging for prescribed minimum benefits in what amounts to an abuse of the healthcare system.

His research shows that 40% of the largest anaesthetist practices in South Africa are explicitly charging more for their services when surgery happens to be classified as a benefit.

Raath also found that charges billed to medical schemes by general surgeons between January 2010 and July 2013 increased at an alarming rate when it related to the benefits.

Other findings include:
» A psychologist in KwaZulu-Natal had billed to the effect that he had consulted every patient in a particular hospital.
“His bills reflected that he was working 56 hours a day.”

» A dietician whose billing reflected that she had consulted several beneficiaries 50 to 70 times each in one month and claimed for a 100-minute consultation each time.

Raath points out that the increase in fees by specialists in the face of the cover may be undesirable, but it is perfectly rational given the incentives inherent in the system.

Under the current rules, a medical scheme must pay in full for any treatment of the benefit irrespective of the fee charged.

“If you know that you will be guaranteed payment, no matter how much you charge, wouldn’t you charge more?” asks Raath.

As a result of this incentive to overcharge, medical schemes are reluctant to pay out for the benefits resulting in increasing complaints from members.

The registrar of the Council for Medical Schemes, Monwabisi Gantsho, says that, last year, more complaints were received about the manner in which medical schemes and administrators pay for benefits than in any other complaint category.

Of a total 5 915 complaints received by the registrarCMS, 2 411 related to benefits.

Of these, 846 complaints related to instances where medical schemes incorrectly funded the benefits claims at their respective scheme rates and not in full.

Unfortunately, this results in members having to foot the outstanding balance of the bill.

According to the medical schemes act, your medical scheme must legally cover . . . 

1 Your benefit conditions in full, as per the invoice submitted by the healthcare provider.
2 Your scheme is not allowed to use your personal medical savings account to pay for benefit conditions.

3 The diagnosis, treatment, and care of roughly 300 serious and costly health conditions fall under benefits, including 270 diseases such as tuberculosis and cancer; and 25 chronic conditions including asthma, epilepsy and hypertension.

4 Your scheme is entitled to nominate a designated service provider such as a doctor, pharmacy or hospital as the ­first-choice provider when you need treatment or care for the benefit’s condition.

5 If you choose to use a nondesignated service provider and it is not an emergency situation, you may have to pay a portion of the bill.

6 If you have a condition that is classified as a benefit, most schemes require you to register for a benefit before they will start reimbursing you as per the benefit’s requirements.

Schemes avoid payments
Gantsho notes that medical schemes are not dealing with benefits in a uniform manner and different complaints bear testament to this:

» Some schemes have deliberately programmed their systems to fund members’ benefits accounts at scheme rates and then pay the balance only after the council investigates a complaint.

» Other complaints related to instances where schemes underpaid claims or made no payment owing to the fact that members did not use the services of the designated service providers of the scheme, whether voluntarily or involuntarily.

» “Some members did not qualify for benefits as their treatment did not form part of treatment protocols, but some protocols were contravening the (act) in that they were not evidence-based. This means members had been offered an incomplete package,” he says.

Calls for price regulation
Raath says while the benefits are “absolutely necessary”, he takes issue with the “draconian” way in which they are applied, as well as the lack of consultation about which medications and services should fall under this description.

There are also calls for price regulation of medical services.

In its annual report, the Council for Medical Schemes (CMS) states that it has proposed the establishment of a regulator to oversee price determination in the private health sector.

“During the year under review, the CMS held various discussions with officials in the competition commission, the Health Professions Council of SA as well as the minister of health and the department of health on the determination of healthcare prices in the private sector,” the report states.

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