BHF MD Dr Katlego Mothudi Image: Roy Watson

The Board of Healthcare Funders (BHF) has refuted Council for Medical
Schemes (CMS) claims that medical schemes “are denying beneficiaries relief
despite extreme Covid-19 conditions” – a claim made in CMS Circular 50 of 2020
late last week in based on the number of schemes who had not applied for
exemption to provide financial relief to members (see Med Brief Africa Friday 25 July: “COVID-19: schemes ‘not acting in
best interests of members’*)

“The fact that some Schemes did not apply for the exemption does not
mean that they did not offer assistance. It means they were able to identify
areas within the scheme rules to support members without going through the
individual exemption application process,” BHF MD Dr Katlego Mothudi has
explained in a statement issued this morning.

He pointed out that at the beginning of the Covid-19 pandemic, the BHF
approached the CMS to grant collective exemptions to allow schemes to extend
relief such as financially distressed members a contribution holiday during
Covid-19 period.

“The CMS did not support the BHF recommendations noting that the
Regulator would not allow for a collective application; but requested that
medical aid schemes make individual applications for exemption consideration,”
he added.

Some of the schemes, the statement continued, submitted individual applications,
while others looked at their scheme rules to establish areas in which they
could provide support without making the applications to the CMS given that
members needed an immediate solution.

“Individual exemption application would have been a lengthy process,
especially after the collective application was declined. These processes,” it
added, “were assessed against the schemes’ rules and any departure from these
would have been adequately addressed through a resolution by the Scheme’s Board
of Trustees.”

The BHF further clarified that medical aid schemes have come up with
various innovative solutions, some allowing members to buy down temporarily
during this period to ensure that members remain covered while they manage
their finances. Payment holidays, determined through an individual needs
assessment basis, have also been provided while several schemes have enabled
members to utilise their accumulated savings to pay for contributions.

“Since the beginning of the pandemic,” Mothudi noted, “the BHF has made
a number of submissions to the CMS to support medical schemes to provide relief
to members. This includes a request for CMS to set up a framework to enable medical
aid schemes to collectively negotiate costs for all Covid-19 related cases.

“In April, the BHF submitted a draft framework to support this proposal.
It was accepted by the CMS with a view to seek ratification of the process from
the National Department of Health, however, to date the industry is yet to
receive feedback on the status of the proposed framework.”

A non-responsive regulatory environment presents a big challenge to the
various stakeholders, particularly the beneficiaries, Mothudi asserted: “At the
moment, medical aid schemes are compromised as they cannot collectively
negotiate for effective pricing for hospital admissions or anything related to
Covid-19, to increase affordability for members; because the proposed
negotiation chamber has not been established, as per our submission to the

Low cost options

The BHF also alluded to the delay in finalising the Low-Cost Benefit
Options (LCBO) framework, “which would have allowed the Schemes to register
these options as part of their service offering”.

“The LCBOs would have provided a much-needed financial buffer for
members who can no longer afford to pay premiums during this time. This process
was initiated almost four years ago when the BHF submitted an application on
behalf of the 52 medical aid schemes represented under the funding
representative body. The CMS,” the statement added, “declined the application
at the time as well.

“We are now in a crisis, and medical aid schemes find themselves in a
space where they have to carefully navigate the regulatory environment to
ensure that they continue to provide support to their beneficiaries,” said
Mothudi, stressing that the CMS needs to further engage with the
recommendations that have been put forward to enable medical schemes to do more
for members: “In addition, constant, clear communication between the Regulator
and the Medical Schemes is essential for the Council to understand
interventions that have been put in place by medical schemes for those members
in financial distress. The BHF is concerned that no attempts have however been
made to achieve this.”