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In response to Mr Neil Nair’s e-mail of the 15th October, sent to all Principal Officers, BHF would like to respond as follows:
- BHF is fully behind schemes in their claim that the legal requirement of “payment in full” for PMB services is inequitable.
- This is a long-standing issue that BHF has raised on numerous occasions with the National Department of Health and the Council for Medical Schemes, the most recent example of which includes the submission to the Private Healthcare Indaba, called by the Minister of Health in September this year, where we stated that medical schemes are unable to manage their risk and control increases in contributions due to the open-endedness of their liability for PMBs.
- The BHF has also raised this issue in the context of an application for exemption from the Competition Act for medical schemes which is currently with the Competitions Commissioner.
- In its policy response to Circular 8, BHF called upon the Registrar to completely review the regulation.
- In the view of BHF, it is the regulations themselves which are a problem as opposed to any rulings by the CMS on the subject. There are only two ways of dealing with regulations which are problematic.
The first is to lobby the authorities for their alteration. The Minister of Health undertook, at the close of the Indaba, to take action on the issues raised, one of which was the PMBs. The Minister is aware that the regulations effectively provide a ‘blank cheque’ to providers and has committed to address the issue. She has requested that BHF come up with proposals on ways in which the process can be taken forward.
The second action is to establish whether the regulations could be attacked on one or other legal grounds in a court of law. It is the considered view of BHF, in light of the Minister’s undertakings at the end of the Indaba, that litigation, if it were feasible, would only serve to antagonise the Minister and the Department of Health. It would also be unnecessary because the Minister has already undertaken to deal with this matter.
It is BHF’s view that to institute litigation at this point would be evidence of bad faith on the part of the medical schemes’ industry, given the support by the industry of the Indaba process. Apart from this, litigation is also extremely costly and could take up to two years or more before a final decision is handed down, whereas the Minister of Health is able to amend the regulations within a period of four or five months.
