A major proposal  that could assist in sustaining private practices that are struggling to stay afloat as the fall-out of COVID-19  takes its toll while enabling private health professionals to participate in the national response to the pandemic has been drafted and published and is now being discussed for approval by all major role players in the healthcare sector. If approved, the plan could see private practitioners receiving a guaranteed capitation payment of 70% of what they would have historically earned from medical scheme claims, regardless of the number of patients they see in a month over the next two years.

The plan was presented at a virtual media briefing last night. Spearheaded by the Progressive Health Forum (PHF) with the assistance of the Medical Research Council and developed by Wits School of Governance, Prof Alex van den Heever, the proposal has the endorsement of all the country’s major medical organisations representing 15 000 private doctors, specialists and allied health professionals. Discussions with the three major medical scheme administrators and selected corporate banks to get their buy-in and thrash out the details of a possible agreement are already at an advanced stage.

Representing the PHF, an organisation comprising of a network of concerned health veterans, professionals, clinicians and activists established in 2018, Dr Aslam Dasoo explained that the plan was aimed at enabling a comprehensive response to COVID-19 while ensuring that private medical practices remain sustainable despite the many financial and other challenges they will continue to experience, as the pandemic continues to ravage the health system.

“With the advent of COVID-19, we accepted and understood that there needs to be an integrated comprehensive response and full mobilisation of forces in the health sector. What we noticed instead was a public sector response without any private sector involvement,” Dr Dasoo said. Engagements with organisations such as SAMA, the SAPPF, the Radiology Association of SA, the SA Medical and Dental Association and the IPA Foundation showed that they were more than willing to participate but that their representations to government didn’t receive much traction, necessitating the establishment of a forum to act as a unity that could facilitate an integrated public-private response. However, the severe financial distress private practices were experiencing was not only threatening their closure but also the ability of these individuals to participate in caring for those infected, Dr Dasoo noted.

What is the plan?

Elaborating on the proposal, Prof van den Heever, said if approved the plan will guarantee practices a 70% advance payment each month over the next two years based on their 2019 claim history. If accepted, it is envisaged that the reimbursements will be made retrospectively from the beginning of April while some of the major banks have already given their support to providing bridging finance to practices until the framework is approved by all parties and the logistical issues addressed.

“It is intended as a smoothing mechanism in anticipation for future claims over the next two years and is not a grant or a bailout,” Prof Van den Heever said, adding that it will also assist medical schemes in their financial planning in the wake of the expected surge in expensive ICU and high care hospital admissions of COVID patients over the next months.

The framework of the plan entails the conversion of reimbursement models from full fee-for-service to a combination of a capitation fee component  offset against actual claims, (referred to as the capitation fee), equivalent to 70% of practitioners historical claims based on their 2019 claim history, and fee-for-service for the remaining 30% of historical claims.

This means that practices that are currently billing less than in 2019 due to dwindling patient numbers and other issues related to the pandemic, would be topped up to receive 70% of what they would have received for that particular month. However, when demand at practices exceeds the 70%, those claims will be offset against the top-up accrued in earlier months and practitioners will not be reimbursed for those services.

Global cap on payments

The second component of the plan is that the remaining 30% of billing would be paid as normal fee for service claims based on 2019 tariffs.  The arrangements will be subjected to a global cap that will apply for both the 2020 and 2021 financial years.  

“Essentially that is a risk that practices will be carrying, and the overall framework of this plan is therefore a shared risk model between medical schemes and providers. It is a classical managed care arrangement which means that practitioners can bill up to a ceiling and once they reached that ceiling, they won’t be reimbursed any further for the duration of the arrangement,” Van den Heever said.

This cap is aimed at addressing the risks of a resurge in demand when the pandemic starts easing and the expected increase in claims due to COVID-19. Medical specialties that are mainly dependent on income from medical savings accounts such as dental and ophthalmology practices would also be supported through this arrangement as the cap will apply to both risk and saving benefits.

Medical schemes’ annual tariff increases into 2021 will be fixed at the consumer price index to minimise the need for real medical scheme contribution due to the condition of the economy.

“While a conservative increase, it is suggested as a measure to manage uncertainty for members, funders and medical practices,” Van den Heever noted.

How long will it take to implement?

Commenting on the current status of the plan, he said it had been submitted and discussed with the three major funders, Discovery, Medscheme and Metropolitan whose comments have been included in the framework after they tested its feasibility. Although it does not need the approval of the Council of Medical Schemes because it is a voluntary framework, the council’s input will be needed on the contracting between the schemes and providers once the plan is finalised.

However, the final decision on the contracts that will be required will be made by the medical schemes and the medical practices themselves once the framework has been accepted and fully communicated to all parties, Van den Heever explained. Pointing out that the framework will allow a high degree of financial certainty for medical practices, the proposal urges providers to support the arrangement, warning that it is unlikely that schemes will support it if there is a significant opt out.

Freeing private doctors to care for COVID patients

According to Dr Dasoo, the purpose of the plan is to enable an integrated response of all health resources across the public and private sectors and  talks on the clinical collaboration will be continued once the reimbursement framework is finalised and approved.

“We have enabled a dialogue between private and public clinicians to agree on things like protocols, etc. What we have learned from the international experience is that all the doctors in a facility get roped in to assist in the COVID fight when the surge happens. So, no doctor that is willing to assist will be excluded as we need all hands-on deck in whatever setting we find ourselves but government will have to agree to this agreement. So far they haven’t engaged us in a coherent sense but once the schemes and the private doctors have agreed to this process and private practitioners can be made available without having to worry about the sustainability of their practices when they become involved in caring for COVID patients, the government will certainly be interested in utilising their services,” Dr Dasoo said.  “However, there is nothing on the table yet in terms of how the government will actually utilise these additional practitioners, but it seems to me almost impossible to ignore it if they want to address the crisis.”