Health minister Aaron Motsoaledi stated he would seek changes to Medical Schemes Act that regulates 'intrusive' administrators
The Department of Employment and Labour (DEL) has its hands tied when it comes the medical aid scheme ‘racism’ report, while the health department is pressing on with plans to reform the sector.
Both departments provided updates on their positions earlier in August via written responses to parliamentary questions on the matter.
In July, a Section 59 investigation report accused certain medical aid schemes of racial bias in their handling of fraud, waste and abuse (FWA) investigations against healthcare providers.
The report was compiled by Advocate Tembeka Ngcukaitobi and the findings were based off an algorithm that the accused parties consider to be vague and flawed.
‘No legal basis’ for labour department
The parliamentary question sent to the DEL asked what immediate corrective measures would be taken, how the situation would be monitored, and if there would be any investigation into the medical aid schemes.
Minister Nomakhosazana Meth explained that there was no legislation that permitted DEL’s involvement and that any dispute was between commercial entities.
“Even the Employment Equity Act (EEA) provides no legal mandate that could place it as a respondent to the specified report.
“There will be no immediate corrective measures that the department will be undertaking to address the specified practices in the public health working environment,” stated Meth.
The question posed of the DEL called for the implementation of anti-discrimination policies and asked if the minister supported legal action against medical aid schemes.
Meth stressed the EEA existed to promote equal opportunity and fair treatment in the workplace, but no measures relating to the report would be considered.
“There will be no investigation conducted by the department into the discriminatory practices of the medical schemes because it falls outside the ambit and regulatory framework of the EEA.
“The department has no legal powers to collaborate with other relevant stakeholders to develop and implement anti-discrimination policies,” Meth concluded.
Medical aids fighting waste
Medical aid schemes vehemently defended themselves, stressing that the report made no legal findings and that the data was “unreliable”.
“This inaccurate narrative undermines the integrity of medical schemes and their duty to protect members’ funds from being paid out inappropriately,” stated the Health Funder Association (HFA).
“The statistical findings in the final report were derived from analyses conducted by a single expert who classified health providers by race using their surnames. This methodology has been widely criticised as unreliable and flawed,” the HFA explained.
The Board of Healthcare Funders (BHF) was equally dismissive of the report, highlighting the cost of FWA.
“Fraudulent claims, over-servicing, abuse of benefits, and improper billing practices cost South Africa’s medical schemes around R30 billion each year,” stated BHF Managing Director Katlego Mothudi.
“We will not be deterred by unfounded claims of racial bias – corruption is corruption and must be rooted out,” he added.
Motsoaledi’s plans
Health Minister Aaron Motsoaledi’s response stated that the department was working with the Council for Medical Schemes to appoint a firm to form a legal opinion on their behalf.
He explained that this opinion would determine the department’s course of action, but confirmed he supported legislative reforms; even using the Financial Sector Conduct Authority and the Prudential Authority to “strengthen deterrence” against discrimination.
“I do support legislative and/or regulatory amendments to provide stronger oversight and enforcement powers over medical schemes engaging in discriminatory conduct,” stated the minister.
The report suggested the establishment of a tribunal and greater transparency over schemes’ adjudication software, which Motsoaledi said would be overseen by an internal task team.
The minister said he would seek “urgent amendments” to Section 59(3) of the Medical Schemes Act which outlines how medical aids are able to claim funds back from healthcare providers.
“[This section] is light on regulatory detail and could be expanded upon so that it properly regulates the more intrusive aspects of the FWA systems developed by schemes and their administrators over the last decade,” stated Motsoaledi.
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