If the SA Society of Physiotherapy’s (SASP) should succeed in its court bid to declare unconstitutional Section 59(3) of the Medical Scheme Act (MSA) that allows medical schemes to reverse payments to healthcare, it could set a precedent that could be catastrophic not only to schemes, but also to healthcare practitioners who depend on payment of claims within 30 days of submission.
This is according to legal consultant to the Board of Healthcare Funders (BHF), Dr Debbie Pearmain. Speaking at a BHF webinar on Fraud, Corruption and Ethical Conduct in Healthcare, Pearmain said it would make the administration of medical schemes extremely difficult and even unworkable if schemes are barred from recovering mistaken or erroneous payments unless they are prepared to institute legal action to prove fraud or theft before a payment is reversed.
Healthcare providers have the claw back of medical scheme payments for years, saying that they are often unsubstantiated and are crippling practices financially to the extent that some practices have been forced to close their doors. Last month the SASP, which claims to represent most physiotherapists in the country, took all the country’s medical schemes to the Gauteng High Court, demanding that section 59(3) be declared invalid and unconstitutional. The society also wants an independent party to be appointed to make the final decision on whether reversed payments were justified, and a review of all contested reversals over the past six years.
Expressing doubt about the case’s chances of succeeding because of the many unintended consequences of striking down the section of the act, Pearmain however advised medical schemes to contest the action as it could provide them the opportunity to explain the intricacies of the claiming and payment processes and to highlight the industry’s problems with fraud, waste and abuse in court.
Pointing out that there is nothing sinister about the reversal of payments as it allows medical schemes to recover money paid in error, Pearmain referred to 59(2) of the Act which requires medical schemes to pay claims within 30 days after submission. Given the heavily automated nature of claims payment and the huge volume of claims that needs to be verified within the 30-days timeframe, there should be an understanding that mistakes could occur, she noted.
“If Section 59(3) is going to be done away with, schemes will have to take longer to process claims because the level of scrutiny would have to be increased dramatically and that is only for non-problematic claims. In disputed claims where fraud or theft are suspected, these cases will have to be taken to a criminal court to prove liability while suspected negligence, misconduct or abuse will have to be handled by the providers’ statutory professional bodies which could take a long time,” Pearmain explained.
Referring to the SASP’s request that an independent auditor or legal professional be appointed to scrutinize and adjudicate all clawbacks, Pearmain said it would add an additional tier to schemes’ administration, making it financially unsustainable. In addition, the technological sophistication of medical scheme systems as well as the complexities of issues such as scheme rules and coding require a high level of expertise which would be very hard to find outside the medical scheme environment.
Locus standi of SASP questioned
Pearmain also questioned whether SASP has locus standi to take the matter to court on behalf of all physiotherapists as all physios are not part of the legal action. Furthermore, as Section 59(3) applies to all healthcare providers and not only physios, the court could dismiss the case as it did when BHF applied for a declaratory order on the interpretation of Regulation 8 requiring medical schemes to pay in full for the treatment of Prescribed Minimum Benefits.
“BHF lost not because it didn’t have a case but because the court found that not all of its members were part of the legal action and that it therefore had no locus standi or right to apply on the matter,” Pearmain explained.
However, she stressed that medical schemes cannot afford to ignore the case, not fight it, or try to settle it out of court to avoid litigation.
“Medical schemes should see it as an opportunity to explain how they work and to defend themselves against these allegations. The system is not perfect, but I think there needs to be a distinction between how medical schemes and other sectors in commerce do business because of the volumes of claims involved and the requirement that schemes pay within 30 days of receiving the claim,” Pearmain observed.
It would also afford schemes the opportunity to emphasise the extent of fraud, waste and abuse in the industry, why it is not feasible for funders to pursue criminal prosecutions for each and every contested claim and propose solutions that could be fairer, Pearmain said.
Taking a swipe at the Minister of Health and the Council of Medical Schemes over what she described as their hostility towards funders, Pearmain said presenting a strong case could force the CMS and the Minister to take notice of the complexities that schemes are dealing with, how many claims they have to pay, how often they paid, how they sustain the private healthcare provider side and the devastating impact it could have on the industry if the court should find in favour of scrapping Section 59(3).
Why the SASP went to court
In an earlier media release to explain its decision to go to court, the SASP argued that despite continued allegations of procedural unfairness and a comprehensive investigation launched by the CMS with certain findings being made, no decisive action has been taken to amend or curtail the practice of claw-backs.
“While this issue has been affecting medical practitioners across all disciplines, the physiotherapy profession has been especially hard hit in recent years. When the extent of the trauma and financial damage that its members had been subjected to became clear, a formal investigation was launched within the Society of Physiotherapy to ascertain the extent of the problem, engage with practitioners and to evaluate possible remedies,” the SASP noted.
It says despite attempts to engage with funders about their processes, it became clear to the Society that there was a deep-rooted unwillingness to accept that their forensic units were acting in a manner which constituted bullying where physiotherapists were being forced into signing acknowledgments of debt for amounts not conclusively proven to have been erroneously billed.
“When it became clear that the audits were continuing unabated despite the concerns raised, the SASP was left with no choice but to consider legal action on behalf of its members to challenge the constitutionality of Section 59 (3) which has provided funders with the authority to conduct these forensic processes.”
The society adds that it respects schemes and administrators’ position on fraud waste and abuse. However, it feels that such processes must be adjusted to not allow funders or administrators to adjudicate their own cause, that strong measures are required to ensure that practitioners who commit coding errors are not unjustly tarred as fraudulent or criminal, that these errors are identified in a timeous manner and that any losses to schemes are accurately quantified to avoid the financial devastation of the current status quo.