Business Maverick


Court orders Council for Medical Schemes to cough up source documents on low-cost benefit options

Court orders Council for Medical Schemes to cough up source documents on low-cost benefit options

The Council for Medical Schemes (CMS) has until 24 July to produce all the documentation and reports that led to it barring medical schemes from offering low-cost benefit options (LCBOs) to consumers.

The Board of Health Funders (BHF), which represents a large portion of the country’s medical schemes and healthcare funders – serving nearly 4.5 million individuals – lodged a high court application in August last year requesting that medical schemes be allowed to offer low-cost benefit options. The application was also for the CMS to explain its decision to bar medical schemes from offering low-cost options by providing all the supporting documentation and source documents on which the decision was based. 

On 10 July, Judge Botha ruled in favour of the BHF and ordered the respondents – the CMS, the Registrar of Medical Schemes, Sipho Kabane, and Health Minister Joe Phaahla – to pay the costs of the application.

In his ruling, Botha noted that the respondents frequently requested indulgences, starting in April 2022. 

“The latest was an indulgence to file their answering affidavit in this application,” he says, adding that any attempt to frustrate court procedures should be met with displeasure. 

“Horrendous shopping list”

In response to the respondent’s counsel describing the list of required documents as a “horrendous shopping list”, Botha said the fact that the documents sought are voluminous and the list quite extensive is of no concern.

In its application, the BHF notes that the CMS only provided information already publicly available on its website. However, the source documents upon which decision-making was based and reflecting deliberations were not made available.

In the main application lodged on 8 August, the BHF requested the high court to:

  • Lift the moratorium preventing medical schemes from providing LCBOs … pending the finalisation of LCBO guidelines.
  • Declare that the failure to develop and implement the LCBO guidelines is irrational, unreasonable and unlawful.

Charlton Murove, head of research at the BHF, notes that the protracted process of crafting a framework for LCBOs has taken more than seven years and is yet to be finalised. 

“Many policymakers have criticised medical schemes for their lack of affordability. The proposed solution aims to address these concerns and move closer to the principles of universal healthcare, ensuring that the healthcare system grants everyone access to quality and affordable healthcare,” says the BHF.

Murove says the intention of the application is to drive a progressive agenda for the public and private healthcare sectors, fostering collaboration to alleviate the current challenges in our healthcare system. 

“Progress with LCBOs has been hindered by the CMS’s failure to take the necessary steps for reform, despite the publication of demarcation regulations in 2016,” he says.

Potential NHI clash

Simphiwe Mofokeng, healthcare consultant at Chartered Employee Benefits, notes that the proposed implementation date for LCBOs is 1 January 2024. 

“It remains to be seen whether the LCBOs will be implemented and, if so, for how long, taking into consideration that once National Health Insurance (NHI) has been fully implemented, medical schemes may only offer complementary cover to services not reimbursable by the fund. 

“Interestingly, the current LCBO proposed benefit structure is similar to the primary care services that will be included in the NHI offering,” she observes.

Dr Rajesh Patel, head of health systems strengthening at the BHF, says LCBOs would benefit the entire healthcare ecosystem as they would provide an affordable option for primary healthcare coverage for the health citizen. Patel says the process should have taken six months, at the very least, since the foundation for setting the LCBO framework already exists.

When contacted for comment, the CMS referred Daily Maverick to John Letsoalo, senior manager of legal services. Although Letsoalo read the WhatsApp requesting comment, he did not respond. Calls were first unanswered and subsequent calls went straight to voicemail. DM


Comments - Please in order to comment.

  • Mike Lawrie says:

    Does the BHF actually understand the problem? I wonder.
    The organisations that it represents control a massive flow of funds. Thr ANC wants to get control of those funds, no doubt so that their well-connected cadres can get their cotton picking hands on most of it.
    What is the solution to this problem? It’s obvious, surely? Throw out the ANC.

  • Josie Rowe-Setz says:

    This would be an excellent short to medium term intervention and help many.

  • Derek Duckitt says:

    This would seem to be extremely anti-competitive behaviour by the Council for Medical Schemes, and only serves to reinforce the perception that the NHI initiative is merely another ANC scheme aimed at getting their grubby corrupt paws on the private Medical Aid subs.

  • Brian Ruff says:

    It is very important that schemes provide affordable care by strategic purchasing designed to commission effective structures and efficient processes, aimed particularly at avoiding unnecessary use of hospitals, which they mostly currently don’t do. They instead provide low cost cover by discounting GP practice fees and restricting access to often poor quality services. Reducing benefits in a Low Cost option is also not a palatable solution. GEMS work (including with us) on Value Based Care, where value creation is supported and rewarded is the sustainable road.

  • Grant Turnbull says:

    The ANC have hitched their horse to the NHI post and are driving it to stay in power politically. They believe that this one bitbof legislation is going to keep them in power. They dont want the BHF / med aids to create a better product for the masses – then who needs the ANC since they have messed up everything they touched.

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