DEPARTMENT OF HEALTH SAYS IT IS WATCHING THE LEGAL CHALLENGE THAT COULD AFFECT HOW THE REGULATION IS AMENDED
proceedings from the outset.
The intervention of these parties is crucial, because the Department of Health, after initially filing notice to oppose the application, earlier this month filed notice of its intention to abide by the judgment.
Maila says the department decided not to oppose the case in court, because it is in the process of amending the regulation.
In its application, Genesis argues that the Medical Schemes Act grants the Minister of Health the authority to prescribe by regulation “the scope and level” of minimum benefits that schemes must provide to their members. It says this does not give the minister the right to prescribe the minimum financial benefits to which members are entitled for PMBs or the extent to which medical schemes are financially liable for PMBs.
However, the regulation, which became effective in January 2004, states that medical schemes “must pay in full, without co-payment or the use of deductibles, the diagnosis, treatment and care costs of the PMB conditions”.
Medical schemes have long argued that regulation eight gives healthcare providers a “blank cheque” to charge medical schemes as much as they like for PMB services, because they know that schemes are obliged to pay in full.
In his affidavit with the application, the principal officer of Genesis, Dennis van der Merwe, says the Medical Schemes Act stipulates the financial benefits to which members are entitled, because it states that PMBs must be equal to the cost of obtaining the same services from a public hospital.
Van der Merwe says it is not up to the minister to impose a financially more onerous reimbursement regime; instead, the minister is limited to prescribing the medical diagnoses and treatment regimes that fall within the range of the PMBs.
His affidavit says that regulation eight is incompatible with two sections of the Medical Schemes Act that deal with the PMBs.
He says the regulation undermines the purposes of the Medical Schemes Act, “which results in potentially ruinous expenses for medical schemes, thereby threatening their very existence”.
The principal officer says schemes are not-for-profit entities that set their contributions to match the expected medical expenses of their members. Medical schemes are entitled to limit benefits other than those for the PMBs. Unlimited cover would make the contributions unaffordable, Van der Merwe says, and schemes are, in any event, prohibited from introducing steep increases in contributions.
Van der Merwe says Genesis also received numerous claims where practitioners charged well above the scheme’s rates and indicated that their services were for an emergency medical condition that is included as a PMB, whereas other evidence showed the condition was not an emergency.
In presenting the council and the registrar’s arguments for leave to intervene in the case, Daniel Lehutjo, the acting Registrar of Medical Schemes, says an order setting aside regulation eight will affect not only the council’s role and power, but also the rights and interests of millions of members and potential members of schemes, substantially and materially.
He says it was improper of Genesis to bring the proceedings without joining or giving notice to all parties interested in the matter.
While not conceding the right of the council or the registrar to intervene, Genesis’s legal team did not argue against the submissions from the council’s lawyers.
It also did not object to Section 27, representing the Treatment Action Campaign, People Living with Cancer and the South African Depression & Anxiety Group, from joining the application as friends of the court (amici curiae).
However, Genesis’s legal team argued that the other parties seeking leave to intervene did not meet the necessary legal requirements.
Judge Andre Blignaut reserved judgment on the applications for leave to intervene.
Genesis’s case is the second legal challenge to regulation eight. In 2010, the BHF unsuccessfully challenged the Council for Medical Schemes’s interpretation of regulation eight as meaning that schemes must pay whatever amount they are billed. The case was dismissed in 2011 on the grounds that the BHF did not have locus standi (the right or capacity) to bring the application. The merits of the arguments were not considered.