Dear Doctor and Staff

1. Introduction

The management and staff at HealthMan and E2 Solutions wish all our clients and their staff and those of you who also receive this newsletter a prosperous 2010. This year will indeed again be challenging with expected legislative changes that could have major impacts on private healthcare in 2010/11. Amongst others, these challenges will include:

  • Finalisation of the Reference Price List (“RPL”) processes which were not completed by the Department of Health in 2008/9. In this regard the South African Private Practitioner Forum (“SAPPF”) and 22 other Associations have lodged an application against the Department of Health (“DoH”). The Application will be heard in the Gauteng North High Court on 22nd – 24th February 2010. The Application has been joined with similar applications brought by the Hospital Association of South Africa (“HASA”) and Netcare 911 & ER24.
  • Introduction of the Risk Equalisation Fund in 2011/12. This process has been delayed for a number of years but may be introduced as a forerunner to the introduction of National Health Insurance (“NHI”).
  • An expansion of full clinical validation of ICD10 codes as pressure on Prescribed Minimum Benefits (“PMBs”) increase.
  • Pressure on Medical Schemes to appoint Designated Service Providers (“DSPs”) in both General Practice (“GP”) and Specialist Practice. GP DSPs are already in place for Polmed, Discovery, Bankmed & certain schemes administered by Medscheme. Specialist DSPs could follow the appointment of Hospital DSPs for in-hospital PMBs. In this regard Spectramed has recently appointed Life Health as its hospital DSP.
  • Re-defining of Prescribed Minimum Benefits as a Basic Benefit Package and possible price regulation thereof. The Council for Medical Schemes (“CMS”) has recently cautioned Medical Schemes to get their houses in order as to the proper administration of PMBs.
  • Greater interference by Health Professions Council of South Africa (“HPCSA”) in private practice matters as evidenced by the attempt to scrap the Ethical Tariffs during 2008/9. We expect that the HPCSA will review its position following the court application against the DoH in February 2010.
  • A re–introduction of the National Health Amendment Act to Parliament in 2010. This was successfully opposed by various Societies and Management Companies during 2008, but will be required if Government wants to price regulate healthcare services in South Africa.
  • The release of the long awaited Discussion Document on the introduction of National Health Insurance to South Africa. This document will be followed by a “White Paper” and draft legislation. Timing is uncertain and could in fact take many years until implementation.
  • As part of the HealthMan input to the Private Sector Task Team on NHI we will be doing electronic research amongst Private Practitioners in the first quarter of 2010.

2. Tariffs 2010

2.1 SAMA Doctors’ Billing Manual 2010 (DBM)

The Doctors‟ Billing Manual (DBM) is a comprehensive manual containing important information on the codes and descriptors for doctors‟ services, interpretation of various billing guidelines, as well as relevant legislative and ICD-10 guidelines.

As no RPL has been published by the Department of Health it is expected that the 2010 DBM will only be published towards the end of February 2010. It is our view that SAMA should proceed to publish a DBM as soon as possible as any references to an RPL which is outdated and in fact “irregular” merely serves to confuse practitioners and leads to Administrators and Schemes applying codes
and rules that does not correctly reflect the “Scope of Medical Practice” in South Africa.

2.2 RPL 2010 – Department of Health

In terms of a Court Order granted during September 2009 the DoH undertook not to publish a „Reference Price List‟ prior to the conclusion of the Court Application to be heard on 22nd-24th February 2010. In fact the Court could go as far as prohibiting the DoH from publishing any RPL pending the specific findings and directions that the Court may make.

2.3 Scheme Rates 2010

Legally there is no longer a RPL. In the absence of any guidance to schemes as to what tariffs to apply in 2010 the Acting Registrar of CMS issued Circular 40 on 21st December 2009. It states “…the Honourable Dr A Motsoaledi has agreed to a 7.9% tariff adjustment as an interim and temporary measure in as far as the RPL is concerned”.

As there is no RPL, Scheme Rules will not be able to rely on a RPL in its benefit structures. They will have to adopt a specific Scheme Tariff as Discovery Health has done. These Scheme Tariffs should be placed on web sites and be made available to all Practitioners and members on request.

The reality is however that as most Schemes and Administrators do not have capacity or insight into coding structures, they merely prefer to blindly follow the published RPL. The 7.9% announcement will therefore form the basis for Scheme Rates 2010 and allows for a 7.9% increase over the 2009 tariffs. It is essentially still based on NHRPL 2006 and therefore does not contain all changes to codes, descriptors, rules and modifiers approved by SAMA and other Associations for 2006 to 2010. It is also inconsistent in many respects. Disputes between Practitioners and Schemes will increase and ultimately Scheme members will be worse off.

2.4 Balance Billing

It has been HealthMan‟s view for a number of years that „Balance Billing‟ is an effective mechanism to promote healthy competition between various parties. The CMS has however called for a statutory provision to be made that will enable the development of no-balanced billing tariffs for health services by means of effective negotiations between providers and funders of health care. Proposals for DoH‟s consideration were developed at a meeting held in June 2007 by a CMS committee. Input from the Board of Healthcare Funders (“BHF”) and other key stakeholders present at the meeting was taken into consideration.

Outside of the no-balanced tariff, individual funders and providers will be able to negotiate alternative billing arrangements as long as such negotiations are free of collusion and result in discounts off the centrally negotiated tariff. Certification criteria outlined in the legislation would allow for Ministerial determinations of the tariff where inappropriate, late or insufficiently representative submissions are made. The Minister of Health has recently indicated that they wish to expand on the possible re-introduction of centralised bargaining in 2010. This will however require amendments to current legislation.

2.5 Healthman Reference Price List (HRPL)

The HealthMan website www.healthman.co.za includes a “HRPL” for disciplines commissioned to do such studies. Certain of the results have now been published in the Public Domain and will be updated over the next few months. These tariffs represent the results of various studies and can be used for reference purposes.

We are in the process of refining the studies for “surgical” disciplines and will present the results when available. Please email any comments to casperv@medmall.co.za . We will also be sending all disciplines their 90% basket of codes with comparative tariffs over the next 2 weeks. Tariffs on the web site will be updated by 31 January 2010.

2.6 Discovery Health Tariffs And Payment Arrangements

The base Discovery Health Rate (DH Rate) will increase by 6.75% in 2010. This will apply to all codes and all disciplines except where Discovery has entered into separate arrangements with a discipline that we are not aware of. According to the scheme‟s Premier Rate Payment Arrangement, specialists will receive either 160% of the DH Rate for out-of hospital claims and 135% of the DH
Rate for in-hospital claims (Premier Rate A); or an average 145% of the DH Rate for both in- and out-of hospital claims (Premier Rate B) for patients admitted under Essential, Coastal or Classic plans, and 300% of the DH rate for both inand out-of hospital treatment for patients on Discovery‟s Executive Plan.

For the Classic Direct Payment Arrangement, participating specialists will receive 100% of the 2010 DH Rate for out-of-hospital claims and 215% of the DH Rate for in-hospital claims for members on the Classic plans. Specialists can balance bill above the 100% for out-of-hospital claims, but not balance bill above the 215% for in-hospital claims. Specialist will only be allowed to institute
balance-billing above the 100% rate pay-outs on Essential and Coastal plans for both in and out-of-hospital plans. Members on the Executive Plan can be billed at 300% for all claims, but no balance billing above 300% The above arrangements do not apply to Key Care members for which separate arrangements are put in place.

Anaesthetists have a separate arrangement with Discovery.

Discovery Health Rate % of 2010 DH Rate

  • Premier Rate – Essential, Coastal & Classic
  • Premier Rate A (In Hospital) 135%
  • Premier Rate A (Out of Hospital) 160%
  • Premier Rate B 145%

Classic Rate

  • Essential and Coastal Plans (Can Balance Bill) 100%
  • Classic Plans (In Hospital) (No Balance Bill) 215%
  • Classic Plans (Out of Hospital) (Can Balance Bill) 100%
  • Executive Plan 300%

2.7 Momentum Health Associated Specialist Arrangement

As from 1 January 2010 Momentum Health Medical Scheme will pay specialist claims directly to participating specialists at the following rates:

2.7.1 High Income Plan (Summit)

200% of Scheme rate for in-hospital claims and 215% for out-of-hospital claims.

2.7.2 Middle Income Plans (Custom, Incentive & Extender)

135% of Scheme rate for in-hospital claims and 150% of scheme rate for out-ofhospital claims.

2.7.3 Low-income plans (Base & Access)

100% of scheme rate for all claims.

Comments:

  • Approx 85% of members are on the middle-income plans.
  • If you wish to participate e-mail specialistpartner@momentum.co.za
  • Where coding issues are raised, please advise the HealthMan offices.
  • Whilst the Scheme rate has only increased by 7% above 2009 RPL we recommend that you apply 7.9% in order that there is a consistency in the schemes administered by Momentum.

3. Comparative Consultation Tariffs 2010

Note: As there is no RPL 2010, we have adjusted the RPL 2009 by 7,9% to arrive at the expected Scheme Tariffs for 2010. O & G tariffs are R13.55 higher for Scheme tariffs in the various categories, no differentiation for Discovery. Neither the Scheme tariffs nor Discovery Health differentiates between Tiered Consultations. There is also no justification in the 3 differential sets of tariffs
between groups, other than the “historical accident”.

4. Summarised Rand Conversion Factors (RCFs)

Based on the RPL 2009 RCFs which we have adjusted by 7,9%, we have calculated the Schemes RCFs. Please note that these are the RCFs we expect Schemes will be applying, except where we have indicated to the contrary. These RCFs do not represent the actual costs of running private practice.

5. HPCSA & Tariffs

The HPCSA has given no indication as to whether they will apply Ethical Tariffs in any disciplinary hearing. The current RCF used by HPCSA is of no value and for all intent and purposes can be ignored.

We however strongly advise all practitioners to advise all patients, where practical, what their tariff structures are.

6. Malpractice Insurance

The malpractice insurance rate increases continue to exceed inflationary adjustments. We continue to provide Practitioners with alternative cover through our arrangements with Glenrand and Alexander Forbes. These rates are in general well below that of MPS and can be structured in various levels of cover.

7. Important Changes at Medical Schemes

7.1 Medicover

All Medicover options have been discontinued and merged with Liberty Life. VMed continue to be the administrators. Please ensure that members are valid prior to rendering any services.

7.2 Oxygen

As at the last notification by CMS, no Oxygen Medical Scheme options have been approved by the CMS. A conservative approach would be to treat such members as Private Patients pending the obtainment of further information. We are also aware that the Scheme is under severe financial pressures. For the time being Oxygen administration will remain at Medscheme.

7.3 Pure Health

The Scheme has been liquidated with effect 31 December 2009 and all patients should be treated as Private Patients.

7.4 Resolution Health

Following a continuing dispute with CMS the administration of Resolution Health has been transferred to Agility Global Health Solutions. Agility is in essence a revamp of the old MX Health & Full Circle and now possibly includes structures of the previous Resolution Health Administrators and Managed Care. We will keep members informed as to our views on the future viability of the Scheme as they continue to lose members.

7.5 Telemed

All Telemed options have been discontinued and merged with Bestmed with effect 1 January 2010. Please ensure that members are valid prior to rendering any services.

7.6 Medcor

The scheme has been deregistered with effect 1 January 2010 and all members transferred to GEMS. Please ensure members are valid prior to rendering any services.

7.7 Quantum Medical Aid

As per the last notice of CMS the Options of the Scheme have not been approved. We will keep you informed and suggest that patients be treated as Private Patients.

7.8 Retail Medical Scheme

As per the last notice of CMS the Options of the Scheme have not been approved. We will keep you informed and suggest that patients be treated as Private Patients.

7.9 Tsogo Sun

As per the last notice of CMS the Options of the Scheme have not been approved. We will keep you informed & suggest that patients be treated as Private Patients.

7.10 University of KZN Medical Scheme

As per the last notice of CMS the Options of the Scheme have not been approved. We will keep you informed and suggest that patients be treated as Private Patients.

7.11 Transmed Medical Scheme

The Ubuntu and Private Cover Plus Savings Options have been discontinued.

7.12 Spectramed

The administration has now been taken over by VMed.

8. General Disclaimer

The information disclosed above is based on information available in the healthcare industry and which we believe would be of assistance to you.

HealthMan will not be responsible for any losses incurred by a practitioner relying on the information as stated above, and where any doubt exists, we recommend that you make direct enquiries with the relevant schemes as to the eligibility of members, availability of benefits, etc.

Regards
Casper Venter, Ernst Ackermann
Director HealthMan