Medical schemes regulator ‘abuses power’
One of SA’s key medical scheme associations has accused the sector’s regulator of abusing its power, wasting money on unnecessary litigation and failing to conduct regular reviews of prescribed minimum benefits.
Allegations by the Board of Healthcare Funders (BHF) are contained in a 10-page legal letter sent to Council for Medical Schemes (CMS) council chair Thandi Mabeba and health minister Joe Phaahla on February 16.
The BHF warned that if it did not get a response by March 8, it would lodge a complaint with the public protector.
The BHF represents medical schemes and administrators covering 4.5-million beneficiaries, about half the market. It is waging a legal battle with the CMS to compel the regulator to hand over its records on developing a regulatory framework for low-cost benefit options, which proponents say could open the stagnant medical scheme market to millions of low-income workers.
REGISTRAR ACCUSED OF STALLING LOWCOST BENEFIT OPTIONS, DESTABILISING WEAK SCHEMES AND INTIMIDATING TRUSTEES
The letter, a copy of which has been seen by Business Day, alleges CMS registrar Sipho Kabane deliberately delayed the introduction of low-cost benefit options, destabilised weak schemes and used curatorship to intimidate the boards of trustees of medical schemes.
“The registrar misuses the remedy of curatorship rather than other, more reasonable solutions ... Medical schemes suffer undue harm in the process as a baseless curatorship application can cause reputational damage … [and] the medical scheme may spend a significant amount of money on legal fees fighting a matter that could have been resolved by other means,” it says.
The BHF said several members voiced concern that the registrar was trying to exhaust smaller schemes into winding up or consolidating. It accused Kabane of failing to
comply with the Medical Schemes Act’s requirement to review prescribed minimum benefits (PMBs) every two years. PMBs set out the minimum basket of care that all schemes are obliged to offer their members.
It says that for the past five years the CMS’s regulatory stance appears to have been informed by the National Health Insurance (NHI) Bill, passed by parliament in December but still not signed into law.
“In our client’s view the registrar has been incompetent in key respects ... in that he has apparently abused and unjustifiably exercised his power in an unfair manner. It appears the council has failed or neglected to manage the registrar, or to hold him accountable to its own policy directives,” says the letter, drawn up by law firm Bowman Gilfillan
BHF spokesperson Zola Mtshiya said the CMS used legal instruments to bully the medical schemes sector.
“Are they doing it because NHI is coming? We’re not sure but it … feels that way. We’d like them to put the industry first, in the interests of beneficiaries. We are supposed to be working together not against each other.”
The NHI Bill will, if enacted, reduce the role of medical schemes, as it prohibits schemes offering cover for services provided under NHI.
RESPONSE
The BHF had not had a response from the CMS to its questions and requests for information by close of business on Thursday. The council indicated it was deliberating on issues raised in the letter and would respond “within a reasonable time”, said Mtshiya.
In its letter, the BHF accuses the CMS of wasting public money on expensive, unsuccessful litigation and asked for a report on its legal spending and success rate in the high court over the past 10 years.
The health minister’s spokesperson did not answer Business Day’s questions.
CMS spokesperson Stephen Monamela said the council told its legal team to provide advice on the BHF letter and urged “those that have entrusted the CMS to regulate private healthcare to be patient”.