South Africa is at present in a state of flux with respect to the tariffs that medical practitioners may charge for their services. Historically the South African medical Association brought out a list of procedure codes and Billing Practice Guidelines which stipulated the number of units one could charge for a consultation and /or surgical procedure. The value of a single unit was unfortunately unilaterally decided upon by the medical aids, in conjunction with the medical schemes council and defined as the National Health Reference Price List(NHRPL) or otherwise known as 100% medical aid rate or the Reference Price List(RPL), once the Department of Health(DoH) became involved. The South African Medical Association (SAMA) felt that this unit value should be 300% of NHRPL
Numerous medical aids subsequently defined their own medical aid rates, for example Discovery Health have a Discovery Health Rate(DHR) which is a little more than NHRPL, and most medical aids have differing policies depending at which level they preferred to reimburse the clinicians. The Executive plan for Discovery Health, for example, would pay out at 300% DHR, while the Classic/Coastal Classic plan would pay out at between 150 and 200%. By doing this they have accepted that the SAMA rate is a valid tariff. Obviously the higher the pay-out rate the higher the premiums. The patient’s have unfortunately not been informed that simply having a medical aid does not necessarily cover all the professional fees.
The Health Professional Council of South Africa, which is the institution that regulates clinical practice then came out with an Ethical Tariff rate at 314% of NHRPL and stipulated that this was the maximum amount a clinician could charge, and also that the clinician had to inform the patient of his/her rates.
The Government’s Department of Health then became involved and requested all the various specialities to perform surveys on among their members to determine the practice running costs for each speciality. This would provide a basis for future tariff guidelines. Not all these specialities got their act together, but amongst those who did was the South African Orthopaedic association. It was determined that in order to cover average practice costs consultation fees should be approximately R650.00 for every 30 minutes. Current consultation fees for GP’s and specialists alike, at medical aid rates, are approximately R250. This is clearly ridiculous.
Subsequent developments included the intervention of the High Court of South Africa, which determined on the 28th July 2010, that the NHRPL used by medical schemes to determine the rate at which they will reimburse health-care providers,was to be declared null and void. This ruling is applicable to the 2008 and 2009 NHRPL and is retrospective. Acting Judge Piet Ebersohn found the process by which the rates were determined to be unfair, unlawful, unreasonable and irrational. The Judge said that the process had resulted in tariffs that were “unreasonably low”, one of the reasons cited for the exodus of doctors from this country. This means that at present, medical aid rates are not valid and that essentially there are no current guidelines and that a clinician may charge any fee as long as the patient has been informed accordingly. The medical aids will pay out at whatever rate system they have, based on the policy that the patient has. Currently the original list of SAMA procedural codes and billing guidelines are used by clinicians and medical aids alike but the tariffs associated with these codes are in dispute. The procedural codes are always accompanied by a diagnostic code/s known as the ICD-10 code. Both these codes will be noted on the invoices.
Due to the discrepancy between what the medical aid policies payout and the professional fees, there is often a shortfall which the patient has to pay out of pocket. This led to a gap in the market noted by the short term insurers and the birth of GAP insurance cover. This relatively cheap insurance would cover the client for any shortfall between the fees and the medical aid payout, thus the patients would no longer be out of pocket. Thus a policy for in hospital events cover with GAP cover would work out cheaper than comprehensive medical aid cover. The government and medical schemes council tried to squash GAP cover as it lowered cross subsidization of the young for the older patients, but the courts intervened and stated that this was unconstitutional interference. It is interesting to note that Discovery now also have their own GAP cover offering.
The Cape Town Orthopaedic Clinic and its Associated Surgeons abide by the original South African Medical Association unit value rate, in other words 275 -300% of the now illegal NHRPL rate. For practical purposes we use the Discovery basic medical aid rate as a substitute for NHRPL as they have the largest market share. This policy will remain in place until such time as an appropriate tariff rate has been agreed upon by all the role players.
It should be noted that in order to be fully covered for all medical expenses we suggest that patient’s consult with their brokers and obtain the so-called GAP cover. This insurance will cover the difference between what the professionals charge and what the medical aids pay. A typical family of 4 will have to pay approximately R200 to R400 a month on average, and this will cover the difference for up to 4 times medical aid rate. The reason for this relatively small amount is simply because the professional fees form a relatively small part of the total medical costs related to any surgical procedures, with the majority of the expense due to the pharmaceutical or implant costs as well as the hospital costs. These costs are covered by the medical aid. The problem is that many brokers do not mention GAP cover, because there is no associated commission.
We hope that this note will enlighten you with respect some aspects of the costs of medical care in South Africa.