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CMS to address Undesirable Practices

The Council for Medical Schemes published Circular 39 of 2017, calling for industry input on its intention to declare certain practices irregular or undesirable.

Regulation 8 of the Medical Schemes Act entitles medical schemes to select certain healthcare providers to provide members with diagnosis, treatment and care in respect of prescribed minimum benefit (PMB) conditions. If a member uses a designated service provider (DSP), no co-payments may be imposed and the member’s invoice must be funded in full.

Regulation 15E(2) further provides that a medical scheme may place limits on the number or categories of health care providers with whom it may contract to provide relevant healthcare services, provided that there is no unfair discrimination and provided that the selection is based upon a clearly defined and reasonable policy which furthers the objectives of affordability, cost-effectiveness, quality of care and member access to health services.

The Registrar has since obtained information suggesting that some medical schemes are acting beyond the scope of these regulations.

It therefore intends to declare the following practices as irregular/undesirable:

  1. The selection by a medical scheme of healthcare providers as designated service providers without engaging in a tender process which is fair, equitable, transparent, competitive, and cost-effective.
  2. Imposing a co-payment in terms of Regulation 8(2)(b) that exceeds the quantum of the difference between that charged by the designated service provider of the medical scheme and that charged by a provider that is not a designated service provider of such scheme.

Interested parties are invited to make written representations which must reach the Registrar’s office within 21 days of the date of publication of the Government Gazette notice. Representations can be sent to legal@medicalschemes.com.

Click here to access a copy of Circular 39 of 2017.

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