The Council for Medical Schemes is probing SA’s two biggest medical schemes — Discovery Health Medical Scheme (DHMS) and the Government Employees Medical Scheme (GEMS) — following allegations that they are not paying their members claims in full. GEMS’s administrator Metropolitan Health is also under the spotlight due to a surge in consumers’ complaints last year.
DHMS is SA’s biggest open medical scheme, and wields considerable market influence by virtue of its size and its consistent innovation. As an open scheme, it is available to anyone who can afford its fees and had 2.75-million beneficiaries in 2017, according to the Council’s 2017/2018 annual report. GEMS is a restricted scheme, limited to civil servants and their dependants.
It is important not only because of its size — it had 1.8-million beneficiaries last year — but also because the government has proposed that all the schemes that currently cater for state employees be merged with GEMS as it implements National Health Insurance (NHI). That plan has already run into opposition from the Public Servants Association, which earlier this month questioned GEMS’s capacity to absorb more members.
Inspections into the schemes have been conducted in terms of section 44 of the Medical Schemes Act, the council’s head of compliance and investigations Stephen Mmatli said on Wednesday.
An inspection into DHMS and its administrator Discovery Health had been initiated following allegations that members’ claims for Prescribed Minimum Benefits (PMB’s) were not being paid in full, in contravention of the Medical Schemes Act. PMB’s are the basic basket of healthcare benefits that all schemes must provide to all their members. The Council had also received a complaint from a pharmacy alleging it had been forced to sign an acknowledgement of debt in order to have its claims paid, he said at a press briefing in Cape Town.
DHMS said it had fully co-operated with the council’s inspector during the process, which was not yet complete. “We have received initial reports and have responded to these. We are not able to provide further comment until the process is completed,” it said.
Discovery Health CEO Jonathan Broomberg said there had been several court judgments in the company’s favour with regard to the allegations made by the pharmacy, which had committed serious fraud. “Our conduct in dealing with this fraud has been beyond reproach in all respects,” he said.
Mmatli said the inspection into GEMS was triggered by allegations that it was not paying PMB claims in full, and a sharp increase in member complaints during the course of 2017. “It may be suggestive of a governance issue,” he said. “We have also been looking at the role of the administrator: are they (the complaints about non-payments) systemic, and if so, who is complicit,” he said.
Consumer complaints to the council about GEMS rose from 0.5 per 1000 beneficiaries in 2016 to 0.6 per 1000 beneficiaries in 2017, catapulting GEMS into sixth place in the top 10 offenders among restricted schemes.
The head of the council’s complaints division, Thembekile Phaswane, said it had received complaints from GEMS members about claims that were declined without valid reasons, delayed payments, waiting periods imposed in contravention of the Medical Schemes Act, and complaints and queries to its administrator Metropolitan Health that were ignored.
She said the council had raised its concerns about the performance of Metropolitan Health with GEMS’ board of trustees and with the administrator.
GEMS principal officer Guni Goolab declined to comment on the inspection as it had yet to be finalised. He said Gems had tackled the issues raised by the Council about complaints and had changed its procedures for processing claims. “GEMS has already seen a significant decrease in overall complaints in 2018 through a focused intervention in service, monitoring, reporting and root cause analysis. Further attention has been given to member and provider education,” said Goolab.
Mmatli said investigations were also underway into two smaller open schemes, Resolution Health and Bonitas Medical Fund. The Council was probing allegations that Resolution’s principal officer provided loans to employees without following proper procedures, and that the scheme’s board of trustees was failing in its fiduciary duties because it its administrator Agility was not providing value for money, he said.
Bonitas was inspected following allegations that there was a lack of an arms’ length relationship with its service providers, including its administrator, Medscheme. There were also suggestions that some of its trustees had conflicts of interest, he said.
Bonitas, which had 728,943 beneficiaries in 2017, ranked third-highest among open schemes for complaints laid with the regulator: it had 2.6 complaints per 1000 beneficiaries in 2017.