HEALTH CARE COVER: NEW DISPENSATION UNDER THE MEDICAL SCHEME ACT 131, 1998 (THE ACT)
CATEGORY: GENERAL INFORMATION
Q1. When did the Medical Schemes Act come into operation?
The Medical Schemes Act 1998 (Act 131 of 1998) came into operation on 1 February 1999. Regulations were introduced by Government Gazette No 20556 dated 20 October 1999, with effect from 1 November 1999 and 1 January 2000 respectively.
Q2. How may a member ascertain what his obligations to the scheme are and what his rights, benefits contributions and limitations or benefits are from time to time?
A member is entitled on request, to copies of the scheme’s rules, financial statements, and annual reports upon payment of a reasonable fee for such documents. On admission to membership medical schemes are obliged to furnish members with a summary of the registered rules which comprise reciprocal rights and obligations of both the scheme and members and all benefit options and relevant contributions.
SELECTION OF SCHEMES AND BENEFIT PLANS/OPTIONS
Q3. How do I as an individual select an appropriate medical scheme?
1. Ensure that the scheme is duly registered in terms of the Medical Schemes Act 131 of 1998. The names, addresses and telephone numbers of all registered schemes are published on the website of the Council for Medical Schemes. The address is: http://www.medicalschemes.com/Consumer_Assistance/RegSchemes.aspx.
2. The list is furthermore published annually in the Government Gazette for general information. The office of the Registrar will also provide you with information on registered schemes.
3. Request information about benefits, contributions, limitations and exclusions from your selected schemes.
4. If you do employ the services of an agent, broker (intermediary), ensure thathe/she has been accredited by the Council for Medical Schemes and that your selection of scheme is based on informed consent. To ascertain whether a broker has been accredited prospective members should insist that brokers produce proof of accreditation with Council and/or verify the broker accreditation status on: http://www.medicalschemes.com/Consumer_Assistance/FindBroker.aspx.
5. Request the latest financial statements and annual report of the scheme to avail yourself of their financial position. These reports are available in the Council’s Annual Report. To view these Annual Reports, go to the following address on our website: http://www.medicalschemes.com/Publications/Publications.aspx?catid=11
Q4. How do I know which benefit option to select?
Ensure that you understand how the benefit options operate and elect according to your healthcare needs and what you can afford. The registered rules of medical schemes fully disclose detailed information regarding the relevant benefits and contributions. It is essential that you obtain the rules of the scheme or a summary thereof to verify all information relevant to enable you to make an informed choice.
MEMBERSHIP, CONTRIBUTIONS AND BENEFITS
Q5. What is a co – payment?
It is a portion of the cost for which you are responsible.
Q6. Is membership of a medical scheme available to any person?
Yes, except in a restricted membership scheme, for instance, where a particular employer, profession, trade, industry, calling, association or union has established a scheme exclusively for its employees or members.
Q7. Can I belong to more than one medical scheme at the same time?
No. It is illegal.
Q8. Can a minor become a member?
Yes, with the assistance of his/her parents or guardian, provided that the relevant contributions are paid by him/her or on behalf of him/her.
Q9. May a medical scheme refuse to admit my dependant?
No, in terms of the Medical Schemes Act, no medical scheme may refuse to admit persons who are dependent on the member. Dependants of a member are his/her spouse or partner, child under the age of 21 or older and a child who is dependent upon the member due to a mental or physical disability; immediate family in respect of whom the member is legally liable for family care and support and such other persons who are recognized by the scheme as dependants. Immediate family is classified as the mother, father, brother or sister of the member. The scheme concerned may require proof of such dependency and appropriate additional contributions in respect of such extended cover must be expected.
Q10. Must a prospective member apply for membership of a medical scheme through a broker?
No, there is no such provision in the Act. One can apply directly to the scheme or opt to use the services of a broker (intermediary).
Q11. If a member dies, will his registered dependants still be covered?
Yes, without any break in membership and provided contributions are paid. It is important to inform the scheme if one chooses not to continue.
Q12. Must I give notice to scheme in the event that I wish to terminate membership?
Yes, the notice period stipulated in the rules must be complied with.
Q13. Am I entitled to benefits while serving notice of termination?
Yes, until the last day of membership provided contributions are being paid.
Q14. Must my employer subsidize my contributions to the medical scheme?
No, subsidies are conditions of employment and the Act does not address such conditions.
Q15. What role does my employer play in my relationship with my scheme?
The employer may determine whether or not the employees are entitled to belong to one or more schemes or whether the employees have total freedom of choice of scheme. The employer also determines, generally within the framework of conditions of service, negotiations between the workforce and organized labour, such as trade unions/personnel organizations or staff, what level of subsidies will apply to different categories of employees or in general. Therefore, employers are not admitted to membership but they play an important role in collecting contributions and ensure payment thereof to the scheme concerned.
Q16. Is my scheme entitled to cancel my membership when the employer fails to pay the membership fees?
Yes, since the employer pays the contributions on behalf of its employees and since the scheme has a contract with the member. The Scheme must give the employer and or/member written notice that if the contributions are not paid up within the stipulated period in the rules membership may be cancelled.
Q17. Can my scheme terminate my membership of the scheme in the case of 1. retrenchment, 2. redundancy or 3. retirement?
Closed scheme – in case of 1 and 2 – Yes and 3 – No, Open scheme – No, you simply continue your membership provided contributions are paid.
Q18. May pensioners’ contributions be less than that of other members?
No, contributions to a medical scheme may only be based upon a member’s income and/or his number of dependants.
Q19. May medical schemes determine the contributions of retirees on their income immediately prior to retirement as a subsequent deemed income or salary.
Yes, unless proof of a reduced income is submitted to the Scheme.
Q20. May a medical scheme determine contributions on the basis of individual high claims or provide for discounted or preferred rates in respect of a particular group of members/clients for whatever reason?
No, contributions may only be based on a member’s income and/or the number of his dependants or both. The contributions apply universally to all members who are enrolled and their dependants.
Q21. If I do not claim from my medical scheme, may I receive a no-claim bonus or rebate?
No, the Act prohibits the payment of bonuses, rebates or re-funding of any portion of contributions other than in respect of savings accounts in certain circumstances.
Q22. On what basis may contributions vary?
1. Only in respect of the cover provided. Different benefit options/plans are priced differently depending on the level of cover afforded.
2. If the rules of the scheme so provide, children may be charged a reduced contribution.
Q23. May my medical scheme call upon me for increased contributions with retrospective effect?
No, in terms of the Act a medical scheme must give members advance written notice of any change in contributions and benefits or any other condition affecting their membership.
Q24. May a medical scheme request pre-authorisation or second opinions in respect of certain benefits?
Yes, except in an emergency where pre-authorisation should be obtained as stipulated in the rules.
Q25. What can I do if I am not satisfied with my current benefit option?
Instead of changing schemes and be faced with waiting periods, a member can either buy up in order to get better benefits or buy down for less contributions.
MINIMUM BENEFITS, WAITING PERIODS AND LATE JOINER PENALTY
Q26. What are prescribed minimum benefits (PMBs)?
The benefits in respect of relevant health services prescribed by the regulations under the Act, and rendered by State hospitals or designated service provider according to clinical protocols and criteria.
Q27. What is a designated service provider (DSP?)
A healthcare provider or group of providers selected by the scheme as the preferred provider or providers to provide to its members diagnosis, treatment and care in respect of one or more prescribed minimumbenefit conditions.
Q28. To what extent are the prescribed minimum benefits restricted?
No restrictions, co-payments, waiting periods or exclusions may be applied to any person in respect of the prescribed minimum benefits if the services are rendered by State hospitals or DSPs. In instances where services are voluntarily obtained from a non – DSP, co – payments may apply or waiting periods may be imposed only on those applicants who have never belonged to a medical scheme, or have not been beneficiaries for the preceding 90 days.
Q29. What constitutes the involuntary obtaining of services in respect of the PMBs from non – DSPs?
Involuntary obtained means:
1. the service was not available from the designated service provider or would not be provided without unreasonable delay;
2. immediate medical or surgical treatment for prescribed minimum benefit condition was required under circumstances or at locations which reasonably precluded the beneficiary from obtaining such treatment from a designated service provider; or
3. There was no designated service provider within reasonable proximity to the beneficiary’s ordinary place of business or personal residence.
Q30. What are the types of waiting periods?
There are two kinds of waiting periods i.e.:
1. General waiting period of up to three months.
2. Condition-specific waiting period of up to 12 months.
Q31. What does a waiting period mean?
A period during which contributions are payable without the member being entitled to benefits.
Q32. When do waiting periods not apply?
Waiting periods do not apply in respect of:
1. Prescribed minimum benefits other than specified in Q28
2. A child dependant born during the period of membership
3. A member moving between benefit options unless he has to complete the remaining period of previously imposed waiting periods.
4. When an individual has to involuntarily transfer to another scheme due to a change of employment.
5. In instances where an employer changes the medical scheme of hisemployees with effect from the beginning of the financial year.
Q33. How can I prove to a new scheme that I was a member of another scheme?
A scheme must within 30 days of termination of membership, or at any time at the request of a former member, or of a dependant of a member, provide such person with a membership certificate stating the period of cover and other prescribed information. The applicant is also entitled to produce a sworn affidavit in those instances where reasonable efforts to obtain documentary evidence of previous membership were unsuccessful.
Q34. What is a late joiner penalty?
It is a penalty by way of additional contributions, imposed on persons joining a scheme late in life i.e. an applicant who is 35 years of age or older who was not a member of one or more medical schemes as from a date preceding 01 April 2001 without a break in coverage exceeding three consecutive months since 01 April 2001.
Q35. What restrictions may a medical scheme impose on an applicant?
1. Late joiner penalty
2. Waiting periods
Q36. Can a medical scheme impose a condition – specific waiting period on pregnancy?
Yes, in those instances where the person was a beneficiary of a medical scheme for up to 24 months.
COMPLAINTS AGAINST SCHEMES
Q37. Where do I complain if claims are not paid timeously or when I am dissatisfied with a decision taken by the Scheme?
Any complaint must first be lodged with the scheme concerned. Written complaints would certainly be preferable, but all schemes should also have dedicated telephone lines to handle everyday complaints and enquiries. All schemes are also required to have independent disputes committees where members’ disputes may be settled. Members and or their legal representatives may be present at disputes committee meetings to present their arguments. Legal representation is not obligatory. Should all efforts fail to resolve an issue with your scheme, you can submit your complaint to the Council for medical Schemes Complaints Unit by either posting, faxing, emailing or submit online by going to the following website address: http://www.medicalschemes.com/Consumer_Assistance/CMain .
Q38. Is a disputes committee entitled to require the aggrieved member to pay any fees in relation to the dispute?
No, there is no such provision.
Q39. What remedies are available if I am not satisfied with the outcome of Q37?
Apart from your rights to the courts, you may appeal to the Council for Medical Schemes against such decision. The parties concerned may appear before Council in person or through a representative. Legal representation is not obligatory.
Q40. What recourse do I have if I am not satisfied with the decision of the Registrar?
You can lodge an appeal with the Appeal Board and only at this stage a prescribed fee will be payable.
Q41. How does one present such an appeal to Council?
In the form of an affidavit directed to the Council and furnished to the Registrar of Medical Schemes not later than three months after the decision concerned was made by the disputes committee.
Q42. Is the Council entitled to award costs when an appeal is considered?
No, there is no such provision.
CLAIMS, PAYMENT OF ACCOUNTS AND MEDICAL SAVINGS ACCOUNT (MSA)
Q43. Within what period of time must my account for services or claim reach my medical scheme?
The account must be submitted not later than the last day of the fourth month following the month in which the service was rendered.
Q44. May credit balances in my personal savings account be withdrawn in cash?
Only when you terminate your membership of the scheme or a benefit option, without joining another medical scheme or benefit option with a savings component.
Q45. May contributions be paid out of my savings account?
No, except on termination of membership. Funds in the MSA may be used by the scheme to offset any debt owed by the member which would include contributions.
Q46. Can co – payments in respect of PMB benefits be paid out of my MSA?
No, the Act specifically prohibits it.
Q47. How do I know whether or not my scheme has paid and what amount has been paid in respect of a claim?
Payment of claims is regulated by the Act, which includes the dispatch to a member of a statement containing full particulars of the transaction, including the amount charged for every service and the amount of the benefit awarded for each service.
Q48. Within what period of time must the scheme pay my claim?
If the account or claim is correct and acceptable for payment, it should be paid within 30 days of receipt of the claim.
Q49. What is an ex GRATIA payment and do I have a right to such benefits?
It is a discretionary benefit which a medical scheme may consider, normally when the member suffers undue hardship. Schemes are not obliged to make provision therefor in the rules and members have no statutory right thereto.
Q50. What is National Health Reference Price List (NHRPL)?
This is a price list for health services published by Council for Medical Schemes and is used to reimburse service providers.
Q51. Is a provider of a health care service entitled to charge more than the fees determined by medical schemes / the tariff specified in the NHRPL?
Yes. Health care providers are free to determine their own fees. Consequently, if an account is in excess of the fee determined by the rules of a medical scheme / NHRPL for a particular service, the difference is for the account of the member.
MANAGEMENT AND FUNCTIONING
Q52. Who manages the affairs of a medical scheme?
Board of Trustees of which at least 50% must be elected or appointed from the ranks of members. These persons must be fit and proper to perform their duties, ensure that the interests of members are protected and that the scheme is properly administered. If they are guilty of misconduct, or reckless trading, they may be held accountable for losses incurred.
Q53. How do medical schemes function?
Contributions are pooled for the benefit of members. Schemes are not-for-profit organizations and belong to the members. Therefore, any surplus made remains in the scheme on the trust principle, for the benefit of members and their dependants.
Q54. May I participate in the operation of my scheme?
Yes, in terms of the Act, a medical scheme must provide for annual general meetings (AGMs) where members may voice their views and present motions. Medical schemes may also hold meetings at different venues for the benefit of members or provide for regional meetings to maximize member participation.
Q55. Are insurance products regulated by the Medical Schemes Act?
Certain stated benefit type insurance products, like hospital plans, where the benefit is not coupled to a healthcare service and/or the cost of such service, are not controlled by the Medical Schemes Act. They fall under the jurisdiction of the Financial Services Board (FSB).
Q56. What certainty does a member have that the benefits offered by his scheme are guaranteed?
In terms of the Act a medical scheme must at all times have assets to cover its liabilities. Furthermore, a scheme must, over a period of time, hold surplus or accumulated funds equal to at least 25% of gross annual contributions to ensure financial stability.
Q57. As members of a group, may we leave the medical scheme to which we belong and claim our pro rata portion of the reserves?
No, in terms of the Act, such reserves are assets of that scheme and all moneys and assets belonging to a scheme must be kept by that scheme.
Q58. Can a medical scheme change its rules and thereby move the goal post?
Yes, there is provision in the Act and in the rules of every medical scheme on how the Board of Trustees may amend rules. All rule amendments must however be approved and registered by the Registrar of Medical Schemes as required by the Act. The scheme will still notify members of such changes as they entitled to it.
TERMINATION OF MEMBERSHIP BY THE SCHEME
Q59. When may my scheme terminate or suspend my membership?
Only on the grounds of failure to pay membership fees timeously or other debts owing to the scheme, submission of fraudulent claims, committing other fraudulent acts, or the non -disclosure of material information.