Slindile Khanyile: Business Report,

MEDICAL aid schemes were losing millions of rands in undisclosed rebates and discounts, which healthcare providers kept for themselves, Rajesh Patel, the head of benefit risk at the Board of Healthcare Funders (BHF), said this week.

Patel said in the past 12 months healthcare providers, excluding hospital groups, charged medical aid schemes hidden costs of up to R1 billion.

This was because healthcare providers who sold services and products were using the rebate inclusive price instead of the net acquisition price, Patel said. Equipment companies were also not charging the true wholesale price.

"Device companies need to explain, and we need more transparency of these costs.

"There are 48 items that have increased while only 5.8 percent had decreased. The rebate inclusive price business outside hospitals has not been addressed," said Patel.

The Department of Health has introduced guidelines for billing which are voluntary. Anban Pillay, the department's chief director for economic cluster, said it was clear that they had to introduce regulation because not all parties were adhering to the

Pillay said that the Medicines and Related Substances Amendment Bill before parliament would make rebates illegal and everything would have to be sold at the net price. There would also be device regulation "because we are not sure where these rebates and discounts are going to".

Last year Patel accused private hospitals of overcharging medical aid schemes and their members by at least R2 billion a year. He claimed that hospitals were getting vendors to inflate invoices and then received off-invoice discounts or rebates that schemes were not aware of.

The hospital sector is dominated by three groups. Netcare removed the rebates on anaesthetic gases while Patel had to apologise to Life Healthcare and Medi-Clinic who were not using the discount model.

Shortly after that the BHF lodged a formal complaint to the consumer affairs council within the department of trade and industry to conduct an investigation into the matter.

Patel said the council should speed up the investigation and declare the practice illegal, which would lead to an immediate abolishment.

He said that theatre drapes and protection items had fallen by 10.9 percent and 19.4 percent, respectively.