Schemes must pay surgical charges for obesity; CMS registrar’s conduct ‘deeply concerning’

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SurgeryDoctors may charge 50% more for surgery on obese patients and medical schemes must fund this, the appeal committee of the Council for Medical Schemes has ruled. The policy of Spectramed’s administrator, Agility Global Health Solutions, had been ‘highly discriminatory’ and the committee also slated the ‘deeply concerning’ conduct of the CMS registrar, which ‘brought the council into disrepute’ and ‘undermined’ its clinical review committee.

According to Rapport, a former member of Spectramed fought for more than a year to have her medical scheme, which has since merged with Resolution Health to form Health Squared, pay the so-called “obesity modifier” charged during her spinal surgery as her body mass index was more than 35.

Spectramed argued that it was being “abused” by doctors and they were therefore within their rights to exclude it from benefits if the condition being treated was not a prescribed minimum benefit.

The report says the CMS initially ruled that a scheme’s rules were binding on members, but its appeal committee agreed with the patient that the so-called exclusion was never part of Spectramed’s rules. The member also argued that the non-payment amounts to unlawful discrimination in terms of the Medical Schemes Act as Spectramed would fund surgery at 100% of its tariff for non-obese members and only at 66% for obese members.

Advocate Rebaone Gaoraelwe, chair of the Appeal Committee, agreed that an administrator’s policy excluding payment for the modifier was not the scheme rules as envisaged by the Act. He also found the policy of Agility Global Health Solutions, Spectramed’s administrator, to be “highly discriminatory”.

According to the report, Health Squared principal officer David Smith said the scheme had accepted the ruling.

The Appeal Committee finding had harsh words for the Registrar of the CMS, writes MedicalBrief. It found that in many instances the Registrar “became embroiled” in the dispute on behalf of the medical scheme, raised arguments on behalf of a party to the appeal that the party itself had not raised, and failed to seek the appropriate input of the Clinical Review Committee, thus “undermining” the role of that committee.

The judgment notes:

“The role of the Second Respondent, the Registrar of the CMS  during this appeal has not escaped our scrutiny. It has triggered deep concerns on the part of the Appeal Committee. To be precise, the duty of the Second Respondent, which in effect is a statutory injunction, is to resolve disputes between medical schemes and their members, and not to be embroiled in, or being at the centre of the dispute itself.

We have observed, with concern, many instances where the Second Respondent raises arguments in favour of a party to the appeal which that party had not raised in this dispute. Resolving disputes presupposes confining itself to the issues raises with it, or before it. 

“The moment the Second Respondent arrogates to itself the right to introduce into a dispute issues that were not raised by either party, it risks eroding the requisite objectivity and neutrality with which it is required by the Act to resolve disputes.

“Resolving disputes in effect implies the Second Respondent assuming a role of an arbiter or mediator, and the moment it introduces issues that were never raised by either party to the dispute, and which issues favour one party or the other, the Second Respondent in effect “enters the fray, the arena”, and wittingly or unwittingly take sides, and can be, rightly or wrongly, be viewed as aiding a party for which it raises additional issues that favour it. The Second Respondent therefore, in executing its statutory mandate to resolve disputes, should do so by confining itself to the issues raised with it.

“Unless the Second Respondent takes this caveat seriously, it risks compromising its legitimacy, in the eyes of its stakeholders (i.e. parties to dispute) to carry out its statutory mandate.

“We further observed that the Clinical Review Committee played no role in this matter. Resolution of disputes by the Second Respondent, presupposes it being armed with all the facts pertinent to the dispute. Conspicuous by its omission in this case, is the Second Respondent’s decision not to request the assistance of the CRC through the provision of a clinical opinion on issues in dispute in this appeal. 

“Generally, the Second Respondent almost invariably, and in its pursuit or quest to carry out its statutory mandate to resolve disputes lodged by members of medical schemes against medical schemes over claims-related disputes such as this one, would consult its Clinical Review Committee(CRC” for counsel and a clinical opinion. 

“This unexplained omission by the Second Respondent therefore suggests that, its decision either to seek or not seek the assistance of its CRC, is discretionary. It is further signalling that the Second Respondent, in making its Ruling on this matter, did not have all the information before it to make a correct, complete and informed Ruling. It is accordingly not far-fetched for the Appeals Committee to conclude that the Second Respondent may have made a different Ruling to the one it has made, had it sought the advice of its own CRC. 

“It is therefore questionable as to whether a Ruling by the Second Respondent regarding a claims-related dispute, is correct and complete, without the opinion of the CRC. The exercise of discretion by the Second Respondent should be exercised with great care and circumspection, and not in a manner that does not assist the appeal process in having as much information before us, as possible. 

“The Second Respondent must always bear in mind that, the role of the CRC benefits or assists not only them, but also the Appeal Committee when matters are escalated to this level.  Therefore, the decision by the Second Respondent to not seek and obtain a clinical opinion regarding whether code 0018 tariff modifier should have been funded or not and why, as well as argument about PMB (as part of carrying out its statutory duty in terms of section 47 of the Act), has in effect deprived us as the Appeal Committee from having a totality of information before it.

“The Second Respondent therefore failed in its statutory duty, by making a Ruling without the benefit of all the information necessary for it to make an informed, complete and correct Ruling.  Last but not least: it is not the first time that the Appeal Committee has sharply raised concerns about the Registrar’s inconsistent use of the services of the CRC. These are clearly being ignored, meaning that the role of this Committee is being undermined by that Office. ”

Full Appeal Committee judgment:

BEFORE THE APPEALS COMMITTEE OF THE COUNCIL FOR MEDICAL SCHEMES HELD IN CENTURION, PRETORIA
(Instituted in terms of section 48(1) of the Medical Schemes Act No.131 of 1998)
In the matter between:
HERMAN SCHOLTZ
and
SPECTRAMED
REGISTRAR OF THE COUNCIL FOR MEDICAL SCHEMES
Case No.: CMS 68983
(APPELLANT)
(FIRST RESPONDENT) (SECOND RESPONDENT)

RULING

TO:
AND TO:
AND TO:
Mr. Herman Scholtz PO Box 6823 Flamwood
2571
SPECTRAMED Private Bag X1 Gardenview 2047
COUNCIL FOR MEDICAL SCHEMES c/o Mr. Phumelele Ntshebe
Block A, Eco Glades 2 Office Park 420 Witchazel Avenue
Eco-Park, Centurion 0157

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1. APPLICABLE LAW
1.1 This Appeals Committee is constituted in terms of section 48(1) of the Medical Schemes Act No. 31 of 1998(hereinafter to be referred to as “the Act”).
1.2 This is an Appeal Finding in terms of section 48(8) of the Act.
2. PROCEDURALMATTERS
2.1 The Appeals Committee, in respect of this case, sat on 7 February 2019 at the offices of the Council for Medical Schemes in Eco-Park, Centurion. Present thereat were: Members of the Appeals Committee, namely Adv. RN Gaoraelwe (Chairperson), Ms. D. Terblanche (Member) and Mr. Moerane Maimane(Member). The Appellant is Mr. Herman Scholtz, who represented himself, the First Respondent was represented by Mr. Bradley Petrus, and the Second Respondent was represented by Mr. Phumelele Ntshebe.
2.2 It is hereby confirmed that no member of the Appeals Committee had any prior involvement in or association with this case or any aspect thereof.
2.3 At the commencement of the Appeal Hearing and during its subsistence, no objection was raised by either party to the proceedings regarding any procedural flaws leading up to and during that Appeal Hearing.
2.4 At the conclusion of the Appeal Hearing the Appeals Committee informed the Parties that a written Appeal Finding is to be prepared by Members of the Appeals Committee and will be received by all the Parties through the Acting Registrar, in due course.
3. BACKGROUNDTOTHEDISPUTE
3.1 Prior to the lodgment of this appeal, the Appellant lodged a formal complaint with the Second Respondent, wherein the Appellant (then a Complainant) raised the following issues:
3.1.1 The Appellant’s mother was a member of the First Respondent.
3.1.2 His mother was diagnosed with lumbar and other intervertebral disorders with radiculopathy(M51.1), and she applied for pre-authorisation from the First Respondent for a number of procedures, including spinal fusion, decompression of impacted nerve roots and laminectomy.
3.1.3 Based on the clinical data and supporting information provided to the First Respondent, it authorised eight (8) procedure codes in February 2018. The clinical appropriateness and necessity of the said procedures is therefore not in dispute.
3.1.4 The First Respondent declined funding for the BMI surcharge (code 0018) which was charged by medical practitioners, on the basis that the said code is only funded for if

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the condition is a PMB one, and if PMB is confirmed. A further reason provided by the First Respondent for the rejection of the code 0018 claims, is that it is a “scheme exclusion”.
3.1.5 The Appellant’s mother then decided to nevertheless proceed with the procedure(operation) at the risk of not having funding from the First Respondent for code 0018, as the funding decision was communicated two days prior to the scheduled procedure, despite the authorisation having been sought well in advance, and which procedure could not be postponed.
3.1.6 Medical service providers submitted surgery/ operation-related accounts to the First Respondent, for which his mother was liable for co-payments totalling more than R150 000 were rejected/ disapproved, and which left her in financial ruin.
3.1.7 Whilst his mother concedes that she is bound by the low tariffs of the First Respondent for the medical service providers as well as the available benefits in her medical savings account, the lawfulness and reasonableness of the First Respondent’s refusal to fund the 0018 code is being challenged.
3.1.8 The three medical service providers that had submitted claims for code 0018 surcharge, are entitled to payment in terms of the Board of Healthcare Funders’ Rules.
3.1.9 It is not in dispute that his mother has a Body Mass Index(BMI) of 50, which exceeds the 35 BMI threshold.
3.2 The First Respondent’s decision not to fund code 0018 claims, is being challenged based on the following grounds:
Ground 1: Code 0018 is not a scheme exclusion in terms of the First Respondent’s Rules:
3.2.1 There is no explicit exclusion listed in Annexure D of the Rules of the First Respondent filed with the Second Respondent. The First Respondent has failed to refer the Appellant to the specific Rule relied upon in rejecting his mother’s claim as a scheme exclusion.
3.2.2 In the absence of an explicit exclusion in the First Respondent’s Rules, the First Respondent cannot rely on such an exclusion to reject funding code 0018.
3.2.3 If the First Respondent’s contention that it views code 0018 as a scheme exclusion is correct, then it means that they single out obese members, and will therefore never fund any procedure at 100% of its tariff under general aesthetics for obese members, if the condition is not a PMB. Such is not stated in the first Respondent’s brochure on exclusions, nor listed in its Rules, which bind all members and the First Respondent itself.
3.2.4 That such a Rule is explicitly discriminating against a specific class of members (e.g. obese members) is not expressly stated in the Rules, is because the First Respondent knows that the Second Respondent would not have approved such a Rule.

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Ground 2: The First Respondent’s Rules do not make previsions for a limitation:
3.2.4.1 If it is the First Respondent’s argument that its non-funding of code 0018 is not a scheme exclusion as such but a limitation, then its Rules make no provision for such a limitation.
3.2.4.2 The non-referral to such a limitation in the First Respondent’s member material constitutes a contravention of section 57(4)(d) of the Act, which requires medical schemes to communicate adequate information to its members.
3.2.4.3 There are 34 pages of limitations and exclusions in the First Respondent’s Rules, for which nothing is being done by the First Respondent to draw attention to its members to same, which deprives members of information needed to make an informed decision about their continued membership of the medical scheme.
3.2.4.4 Rule 13 of the Respondent’s Rules makes provision for limitations to back and neck procedures which states as follows:
“Hospitalisation for back and neck surgery is subject to pre-authorisation and the application of the following protocols:
Rule 13.1 The patient beneficiary may be assessed by any suitably-qualified specialist that the Scheme may nominate and he or she be requested to undergo a conservative non-surgical regime for treatment prior to surgery being authorised. Clinical protocol for “fitness for surgery” or Body Mass Index(BMI) validation is always applicable.
Rule 13.1.1 Such services shall be paid for by the Scheme from the insured
portion of the Scheme’s benefits”.
3.2.4.5 The First Respondent, by authorising surgery for his mother, did not require
a second opinion or alternative treatment for her, meaning that it agreed to the clinical appropriateness of surgery. No information was ever required by the First Respondent regarding the Appellant’s mother’s BMI, which information was in any case provided and never queried or disputed by the First Respondent.
3.2.4.6 Despite several requests, the “Fitness to surgery” clinical protocol was never made available to the Appellant’s mother in terms of Regulation 15H(b) of the Act, thereby rendering the Appellant unable to make representations on the fairness and appropriateness of the clinical protocol, and he therefore reserves the right to deal with this matter should the First Respondent raise same.
3.2.4.7 Although medical schemes are allowed to implement clinically-proven and fair protocols, the contents of the First Respondent’s protocol may be irrelevant based on the following reasons:

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3.2.4.8
3.2.4.7.1Protocol is defined in the Regulations as “a set of guidelines in relation to the optimal sequence of diagnostic testing and treatments for specific conditions and includes, but not limited to, clinical practice guidelines, standard treatment guidelines, disease management guidelines, treatment algorithms and clinical pathways”.
3.2.4.7.2Regulation 15D(a)(i) states that any given protocol must set procedures to evaluate the clinical necessity, appropriateness, efficiency and affordability of relevant health services, and to intervene where necessary.
3.2.4.7.3The First Respondent’s own Rules make it clear that the clinical protocols are applicable to the authorisation or non-authorisation of the procedure in question. It therefore must have applied its “fitness to surgery” protocol and agreed that the treatment procedure undertaken is in line with the protocol.
Code 0018 is not a treatment procedure that can be subject to a protocol in order to approve or deny funding. When the First Respondent gives authorisation for a procedure, it gives such not only for the procedure, but also for all the necessary equipment and materials associated with the procedure, as it is impossible to divorce such items from the actual procedure. In the same vein, it is impossible to divorce a valid surgical modifier from the procedure itself. In other words, once the First Respondent has accepted that a procedure is clinically-appropriate (as in this case) then it cannot escape funding for valid, non-discretionary “extras” such as surgical modifiers.
In limiting its risk exposure by generally-acceptable terms or conditions or funding protocols, a medical scheme must do so in respect of all its members. Any protocol or rule that cuts off funding for obese members cannot be in line with the Regulations and what the clinical protocols were created for.
Ground 3: The First Respondent’s funding decision is in contravention of a precedent set by the Final Appeal Board
The Appellant cited the Appeal Board judgment of Medshield and Another vs. Council for Medical Schemes and 4 Others. The First Respondent was one of the medical schemes/ parties in that case that denied funding for joint replacement procedures for members with a BMI>35. Despite that judgment, the First Respondent now seeks to employ other methods of
targeting overweight members.
Although that judgment related to joint replacements and not spinal surgery (as is the case in this appeal), it however sets a precedent as both cases are orthopaedic procedures. The Appeals Board rejected the First Respondent’s
3.2.4.9
3.2.4.10
3.2.4.11

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3.2.4.12
3.2.4.13
3.2.4.14 3.2.4.15
argument that a protocol targeting overweight patients is compliant with the Regulations.
Even the First Respondent’s argument in that case, placing heavy reliance on their obligation to only pay 50%(Code 0018) for obese patients was rejected by the Appeal Board.
There are mala fides on the First Respondent’s part in not implementing the Appeal Board’s decision and instead rejecting the funding of a surcharge for such patients (obese ones). It undermines the precedent set by the Appeal Board, and targets overweight patients through the back door.
The Appeals Board made it clear that Code 0018 should be funded.
In 2011, the Appellant’s mother had spinal surgery with the same BMI, which the First Respondent paid for the Code 0018 modifier.
3.3 Upon receipt of the complaint, the Second Respondent, as a first step, sought written representations from the First Respondent regarding the complaint lodged by the Appellant (so as to obtain and hear its side of the story/ its version).
3.4 The First Respondent replied and submitted its written representations, citing reasons for its rejection of the Appellant’s application to fund the Code 0018 modifier. A summary of First Respondent’s written representations is as follows:
3.4.1 The Appellant’s mother was granted authorisation by the First Respondent for
spinal surgery for ICD Code M51.1.
3.4.2 It is untrue that authorisation was granted to the Appellant’s mother two days
before the scheduled procedure, as authorisation was granted a day after it was
sought by the doctors’ rooms.
3.4.3 The Doctor’s tariff modifier 0018 is excluded from the benefits in terms of the First
Respondent’s Administrator’s Obesity Funding Policy. The Administrator is called
Agility GHS (to hereafter be referred to as Agility).
3.4.4 Pre-authorisation documents do not confirm a PMB and therefore the benefits were
granted as a non-PMB benefit.
3.4.5 Doctors are not obliged to bill for the modifier if the medical scheme does not fund
it. If they do so and thus increase their remuneration, they are obliged by the Health Professions Act to inform and obtain written confirmation from the Health Professions Council of South Africa(HPCSA) and obtain the member’s written confirmation of their liability to pay the difference prior to the procedure, and there is no evidence that they did so, making all such medical service providers having to be held accountable by the HPCSA.
3.4.6 Code 0018 modifier funding is not the only tariff declined by the First Respondent, yet the Appellant only challenges Code 0018 funding and not the others also declined.
3.4.7 The issue of clinical appropriateness in the First Respondent’s funding decision does not arise.

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3.4.8 The First Respondent does not single out obese members. This is a pure funding decision in terms of the Policy.
3.4.9 The Obesity Funding Policy is a funding policy with no analogy to a funding protocol.
3.4.10 First Respondent maintains its decision to reject tariff modifier 0018 as it is an
exclusion in terms of the Obesity Funding Policy.
3.5 Subsequent to receiving written representations by the First Respondent, the Second Respondent informed the Appellant of the written response received from the First Respondent. 1 In those letters, which also are in effect the Second Respondent’s Ruling, the following is stated:
3.5.1 The tariff modifier 0018 was excluded from authorisation on the basis that it does not constitute a PMB and therefore, benefits were granted as non-PMB. Also, that modifier was excluded in line with clinical protocol in terms of Annexure D paragraph 2.2 of the First Respondent’s Rules, which states that “The Scheme reserves the right to obtain a second medical opinion should it so decide, prior to any operation and/ or procedure taking place. Such costs shall be payable by the Scheme at the Spectra tariff. The Scheme reserves the right to apply a clinical protocol in respect of “Fitness for surgery” and/ or validate clinically appropriate BMI”.
3.5.2 The First Respondent’s policy that excludes obesity from benefits, states that
obesity or any raised BMI will not be funded for:
3.5.2.1 All medical services for the management of obesity, including medical,
surgical, pharmaceutical, endocrine, psychological, psychiatric and dietic
services;
3.5.2.2 All complementary health services except those provided for an alternative
health services benefit;
3.5.2.3 Weight loss programmes;
3.5.2.4 An increased BMI associated with pregnancy or organ failure; and
3.5.2.5 Any tariffs charged by service providers directly or indirectly related to obesity, or as any modifier to tariffs in compensation for the dependent’s
obesity.
3.5.3 The policy further states that, within the Act and its Regulations pertaining to PMB
conditions, funding for services or tariff modifiers as compensation for obesity will, except where a clinical condition negates such determination, be subject to the following:
3.5.3.1 Pre-authorisation approval for such additional tariffs or modifiers;
3.5.3.2 A proven BMI>35kg with actual unclothed weight and height documented and certified by a service provider not related to the main service provider, which certification must be submitted to the Scheme. The scheme reserves the right to request further documentation;
1 There are two letters written by the Second Respondent to the Appellant: one dated 29 August 2018, and the other dated 5 September 2018.
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3.6
3.7
3.5.3.3 An increased BMI associated with a pregnancy or organ failure will not be funded; and
3.5.3.4 Where a clinical condition justifiably negates the pre-authorisation notification, service providers must submit such information at the earliest opportunity.
3.5.4 The policy further states that, submission of tariffs or modifiers as compensating for obesity in claims for which pre-authorisation was not sought or granted, and for which obesity would reasonably be expected to have been present at the time of authorisation, will not be funded.
3.5.5 Based on the facts before the Second Respondent, no compression was applied to the spinal cord, and in the absence of such a compression, the condition in question does not qualify as a PMB, and the treatment does not qualify as a PMB level of care. In the event of a non-PMB diagnosis, the request will be assessed according to the First Respondent’s Rules, and there is no obligation on the First Respondent to approve such a request.
3.5.6 The Rules of the First Respondent, Managed Health care policies, protocols, etc. constitute a legally-binding agreement between the parties involved, i.e. the Scheme and its members.
3.5.7 The Second Respondent is therefore satisfied that the First Respondent’s decision to decline funding of code 0018 tariff modifier falls within the framework of the Rules and/ or the provisions of the Act.
From the above, it is clear that the Second Respondent took a position, and made a Ruling, which in effect supported the First Respondent’s position.
It is subsequent to the communication of the Second Respondent’s Ruling that the Appellant escalated this matter to an appeal.
4. SUMMARYOFARGUMENTSBYTHEPARTIES
4.1 Heads of Argument were presented to the Appeals Committee by the Appellant as part of the documentation(bundle) that each member of the Appeals Committee received prior to the Appeal Hearing.
4.2 During the the Appeal Hearing, the Appellant presented his case first, followed by the 1st and 2nd Respondents’ oral representations, and thereafter a brief reply by the Appellant.
4.3 The Appeal Hearing was concluded on Day 1(i.e. 7 February 2019).
4.4 A summary of what the Appellant presented at the Appeal Hearing is as follows:

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4.4.1 The gist of his complaint is the First Respondent’s refusal to fund the surgical modifier 0018, levied by medical service providers on any type of surgical procedure on a patient with a BMI of more than 35.
4.4.2 It is common cause that the Appellant’s mother’s BMI was more than 35 at the time of surgery.
4.4.3 His complaint is essentially one of non-compliance with the First Respondent’s Rules as well as unfair discrimination contained in those Rules which the Act prohibits, as well as non-compliance with Regulation 15 of the Act.
4.4.3.1 The Appellant does not contest the right of medical schemes to exclude the
treatment of obesity as a condition for all its members on the basis that it is a non-PMB condition. However, the First Respondent targets only a class of its members, namely, those with an increase in weight for the treatment of all or some conditions, whether related to obesity or not, with no exceptions, or an appeal process, and described as a scheme exclusion.
4.4.3.2 Tariff code 0018 is not a procedure but a tariff modifier. Tariff modifiers recognise that a “one size fits all” approach is not always appropriate, and in some instances a higher or lower remuneration is warranted for exactly the same procedure. This tariff modifier further acknowledges that surgeons or anaesthetists would spend more time, and use special equipment in procedures involving obese patients.
4.4.3.3 Refusal to fund the 0018 modifier amounts to a compulsory co-payment for only one class of its members.
4.4.3.4 The First Respondent is in effect stating that, for any non-obese member, they will fund any type of surgery at 100% of its tariff, but only 66.6% for obese people.
4.4.4 TheRegistrarcommittedgrossproceduralirregularities,inthat:
4.4.4.1 He made a Ruling and then later retracted and reviewed it based on having
“missed crucial information”. The Registrar in effect therefore reviewed its
own Ruling despite it being a functus officio.
4.4.4.2 The reviewed Ruling aggravated the former one. The Registrar regurgitated
the First Respondent’s submissions made to him, and came to the aid of the First Respondent by adding a Rule that the First Respondent never relied on in refusing funding of code 0018 modifier.
4.4.5 The Registrar mischaracterised his complaint:
4.4.5.1 Appellant never alleged that the condition of his mother was a PMB, and for
the Registrar to make a Ruling in respect thereof means it mischaracterised
his complaint;
4.4.5.2 The issues that the Registrar was called on to adjudicate, are:

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4.4.6
4.4.5.3 The answer to the three questions above, is a “No”. The Registrar failed to consider these questions;
4.4.5.4 He failed to rule on, or consider the interpretational and substantive issues in dispute;
4.4.5.5 He erred in finding that the First Respondent acted within its Rules, and by so erring, committed an error of fact;
4.4.5.6 He erred by finding that the First Respondent is entitled to make and impose a Rule such as the one in dispute;
4.4.5.7 He erred in finding that the First Respondent is entitled to managed care activities that are discriminatory against obese members, and further failed to apply the Regulations of the Act to the Obesity Funding Policy relied upon by the First Respondent.
The First Respondent failed to act within its own Rules:
4.4.6.1 The Second Respondent ruled that the Rules of the First Respondent are
binding on its members in terms of section 32 of the Act.
4.4.6.2 Rules are defined in the Act, and have specific meaning. It is the approved
scheme Rules that are referred in the Act (as Rules).
4.4.6.3 The definition of Rules in the Act does not include protocols, policies or
informal Rules. Such are therefore not Scheme Rules.
4.4.6.4 The only applicable Rules are those filed by the First Respondent with the
Second Respondent.
4.4.6.5 The First Respondent has failed to reference a Rule it relied upon in
excluding payment for the 0018 modifier.
4.4.6.6 Contrary to what the Registrar states in its Ruling, the First Respondent has
made it clear in its written response to the Registrar that it relied in no Rule,
but on a funding policy.
4.4.6.7 It is trite that where parties enter into a contract there must be consensus
as to what is being agreed upon. It is therefore wrong for a party to a contract to read into the contract additional terms and conditions. The first Respondent’s own Rules state that amendments to its Rules will be made after notice to the members and with the Registrar’s approval.
4.4.6.8 In order for a protocol, exclusion, formulary or policy to be enforceable, it must be known to a patient.
The Act states that no medical scheme shall be allowed to operate unless Council is satisfied, inter alia, that the medical scheme does not or will not unfairly
4.4.7
4.4.5.2.1 4.4.5.2.2 4.4.5.2.3
Did the First Respondent act within its own Rules by declining the modifier 0018?
If such a Rule exists, is it in compliance with the Act and its Regulations? DoestheObesityFundingPolicy”complywiththeAct?

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discriminate against any person one or more arbitrary grounds. This is in terms of section 24(2) (e).
4.4.8 In both Rulings by the Second Respondent, there is no indication that the matter was referred to the Clinical Review Committee of Council for an opinion or guidance.
4.4.9 There is further no indication that the Registrar relied on legal precedents on the subject matter.
4.4.10 The First Respondent’s decision not to fund is non-compliant with Regulation 15 of the Act. In this regard the Second Respondent in its Ruling did not deal with this matter.
4.4.11 The Obesity Funding Policy refers to itself as a Protocol despite the First Respondent citing in its response to the Second Respondent that that policy has no analogy to a clinical protocol.
4.4.12 Policies are not binding. Polices that are inherently discriminatory are not binding.
4.4.13 His mother has been denied access to healthcare.
4.4.14 If there is no clinical basis to pay for code 0018, then even for PMB it should not be paid.
4.4.15 There are reasonable prospects that the Appeal Committee will reach a different conclusion (than the Registrar).
4.5 The Second Respondent (through its representative) at the Appeal Hearing, repeated what is contained in its two Rulings, and will not be rehashed herein.
4.6 The First Respondent (through its representative) presented to the Appeal Hearing what is already contained in its written submission to the Second Respondent, and will therefore not be rehashed herein. In addition, it stated the following:
4.6.1 AnnexureDofitsRules(paragraph1.6)excludesobesity.
4.6.2 Itexcluded0018fundingasitisbeingabused.
5. ANALYSYSOFTHEEVIDENCE
5.1 We wish to upfront state that, in this appeal ruling/ decision, there are many arguments raised for or against the appeal, and which the Appeal Committee will not deal therewith. The Appeal Committee has focused on pertinent and key questions that should determine
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whether this appeal should be upheld, or dismissed. Therefore, it not dealing with those other arguments raised for or against the appeal (which are also important), should not be construed as the Appeal Committee’s agreement or disagreement therewith.
5.2 Having analysed all the submissions made to the Appeal Committee, there are basically two reasons why the First Respondent, supported by the Second Respondent, refused to fund code 0018 tariff modifier, namely:
5.2.1 Pre-authorisation documents do not confirm a PMB and therefore the benefits were
granted as a non-PMB benefit; and
5.2.2 Tariff modifier 0018 is excluded from the benefits in terms of the First Respondent’s
Administrator’s Obesity Funding Policy.
5.3 It is notable that the First Respondent has not raised any arguments during this appeal about the fact that the Appellant’s mother proceeded with some procedures the codes of which were unauthorised, despite being aware that they were unauthorised.
5.3.1 It is in any case not uncommon for members of medical schemes to, rightly or
wrongly, proceed with the procedures the codes of which were unauthorised, despite being aware that same was disapproved, (at pre-authorisation stage), and later challenge same when in disagreement with the Scheme’s decision not to fund/ authorise such codes.
5.3.2 We will therefore not spend much time on this as it was not raised as an argument/ justification by the First Respondent.
5.3.3 The Second Respondent however, sought to bring this argument in, but such is hereby outrightly rejected as the Second Respondent opted to enter the dispute arena instead of trying to resolve it. It is not proper for the Second Respondent to raise arguments on behalf of a party which a party did not raise itself (and thus be received, rightly or wrongly, as aiding one party to the detriment of another). We will deal with this issue later hereunder.
5.4 Code 0018 and PMB:
5.4.1 Both the First and Second Respondents, in citing non-PMB as a defence or
justification to not fund code 0018, either deliberately, or inadvertently, did not go into detail as to what exactly they mean by “PMB”. This becomes important as there are generally two aspects to the PMB parlance: either a PMB condition, or a PMB medical intervention/ level of care. As an Appeal Committee we cannot second- guess the Respondents as to what they meant when they argue that Code 0018 tariff modifier is “a PMB” or “non-PMB”. Did they mean a condition, level of care or both? Are they arguing that Code 0018, being a tariff code, is also a PMB or non- PMB code?
5.4.1.1 Clarity by both Respondents to their reference to PMB would have shed light as to what medical condition are they classifying as non-PMB, or what medical intervention/ level of care they are classifying as non-PMB. To therefore make an

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equivocal, blanket assertion that “the tariff modifier 0018 was excluded from authorisation on the basis that it does not constitute a PMB”, as stated by the Registrar in his Ruling, is unhelpful to the Appeal Committee.
5.4.1.2 If the Respondents, by referring to “a PMB”, in fact refers to a condition, then we expected that our attention would have been drawn to the listing of that condition (for which funding is being declined) in the Diagnosis and Treatment Pairs list, and the absence of that PMB condition therein as a basis for labelling it as a non-PMB condition. Secondly, the First Respondent would have drawn the Committee’s attention to its Rules or Protocols, and where it is specifically stated as to how it deals with the identified non-PMB condition in terms thereof. Equally, if reference to “a PMB”, in fact refers to a level of care, then such would equally have been identified, as well as how the Rules addresses such. This was not done. To refer to a tariff code as a PMB, or in relation to a PMB, is confusing. It is also confusing as to how a tariff code could be branded as a PMB or non-PMB.
5.4.1.3 It can therefore be implied that the Respondents are, by referring to a “non-PMB”, in fact referring to the Appellant’s mother’s obesity as this issue has dominated the appeal proceedings and papers before the Appeal Committee (which we will deal with later hereunder). Crudely-put, the Appellant’s mother was not operated upon because she was obese. Her diagnosis was lumbar and other intervertebral disorders with radiculopathy. That she was obese as at the time of her surgery cannot therefore be allowed to overshadow the real medical reason she found herself lying in theatre.
5.4.2 A distinction between a PMB and a non-PMB condition and the concomitant medical intervention or “level of care” becomes artificial where, on a practical level, the one condition leads to another or, phrased differently, the treatment of a PMB condition results in medical interventions that may constitute a non-PMB level of care. A responsive (and not reactive) medical scheme regulatory regime should pick up on such anomalous trends and practices, and act accordingly to remove such artificial impediments to access to healthcare.
5.4.3 Accordingly, it is the duty of any party raising a defence, a reason or an argument before the Appeal Committee, to give sufficient detail in respect thereof. This is to enable the Appeal Committee to make an informed determination of the arguments advanced, and to arrive at an informed, correct decision and not to second-guess, or deduce from the bald statements being made, as to what the case of a party to the appeal proceedings is. Both Respondents, in advancing the PMB narrative, failed to do so with sufficient particularity and detail, and therefore did not assist this Committee in determining the cogency or otherwise of the “PMB” argument.
5.5 Tariff modifier 0018 is excluded from the benefits in terms of the First Respondent’s Administrator’s Obesity Funding Policy:
5.5.1 Reference to the Obesity Funding Policy was extensively referred to in the papers
before the Appeal Committee as well as during oral arguments presented before it.

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5.5.2 It is common cause that this policy was used as a basis for declining funding by the First Respondent, for modifier 0018, hence this appeal.
5.5.3 The first issue we had to deal with as a Committee, even before dealing with the contents of this policy, was to deal with its the legal standing. Specifically, the following questions required answers:
5.5.3.1 Is the Obesity Funding Policy a Rule, or a Protocol or both?
5.5.3.2 What, legally, elevates a policy of Agility to, firstly, be that of Spectramed
and secondly, to be part of the Spectramed Rules?
5.5.3.3 Is the policy an extension of the contract between the First Respondent
and its members, and if so, are members of the First Respondent aware
that a Managed Care Provider policy is an extension of their contract?
5.5.4 It is the duty of the party, or parties placing reliance on a policy in its funding decisions, to assist the Appeal Committee in placing this policy either as a Rule, or as a Protocol, and the basis thereof. In this regard, we observed conflicting accounts
and paradoxes in the submissions by both Respondents in this matter. To be precise:
5.5.4.1 Despite the First Respondent distancing itself in its papers from classifying this policy as a Protocol, the policy itself (in the heading “Background”) is actually referred to as a Protocol. The Second Respondent as well refers to it
as such in its Ruling.
5.5.4.2 Despite the First Respondent distancing itself in its papers from having
applied this policy as a Protocol in its funding decision, the Second Respondent, in justifying the First Respondent’s refusal to fund code 0018, states that the Second Respondent relied on it, as a Protocol, in its funding decision.
5.5.5 In answering the questions posed in paragraph 5.5.3 above, we, firstly, looked at what the definition of a Rule is, as well as that of a Protocol in terms of the Act:
5.5.5.1 Section 1(1) of the Act defines a Rule as the provisions of the law, charter,
deed of settlement, memorandum of association or any other document by which a medical scheme is constituted. It also includes in this definition, articles of association or other rules for the conduct of the business of medical schemes.
5.5.5.2 It is our considered view as the Appeal Committee that this definition excludes a policy of a managed care provider. If the legislature intended the definition of a rule to include polices, either of the medical scheme itself or even those of its managed care providers, then it would have done so expressly.
5.5.6 In further answering the questions posed in paragraph 5.5.3 above, we, also looked at what the definition of Protocol is in terms of the Act and its Regulations.
5.5.6.1 Regulation 15 in Chapter 5 of the Regulations define Protocol as a set of
guidelines and includes, but not limited to, clinical practice guidelines,

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standard treatment guidelines, disease management guidelines, treatment
algorithms and clinical pathways.
5.5.6.2 Although the Regulations suggest an in exhaustive list of what the definition
of Protocol may include (through insertion of the words “but not limited to”), it is clear, at least to the Appeal Committee, that Protocols are intended to deal with clinical matters and diagnostic testing and treatment for specific conditions, and certainly not funding decisions.
5.5.6.3 Even if any party were to argue that Protocols also cover guidelines on funding decisions, or that policies should be included in the definition of protocols, we expected that clear, cogent and well-reasoned representations or arguments should have been submitted to us in this regard. This was not done. Had that been done, then we would have been able to consider same, analyse it and make a determination in respect thereof, and its applicability.
5.5.6.4 It is accordingly our conclusion that the Act and Regulations could not have intended policies of managed care organisations to be included in the definition of Protocols.
5.5.6.5 In any case, the First Respondent clearly and in writing distanced itself from any reliance on its part on any Protocol in its funding decision regarding code 0018.
5.5.7 Therefore, the Agility Obesity Funding Policy is neither a Rule, nor a Protocol. The implication hereof is that the First Respondent could not have relied thereon either as a Rule or a Protocol, in its funding decision. It should have relied upon its own Rules in its decision to either fund, or not to fund. However, it is well-documented that it relied not on its own Rules, but on that Obesity Funding Policy.
5.5.8 Based on this conclusion on our part, dealing with the contents of this Policy, in effect becomes academic, and therefore unnecessary. That notwithstanding, we wish to make the following obiter regarding this Obesity Funding Policy:
5.5.8.1 The Appellant’s mother was not a member of Agility, but of Spectramed.
Being a Spectramed member cannot by extension also mean membership of a Managed Care organisation, the policies of which then bind her.
5.5.8.2 Every medical scheme has a duty to ensure that all its members are aware of the contractual relations it has with managed care organisations and what the implication thereof is, on them. It appears this was not the case as at the time when this dispute arose. Unless medical schemes do so, then they will be saddled with countless challenges by their members, as is the case here.
5.5.8.3 Continued reference to, and reliance on Agility’s the Obesity Funding Policy by the First Respondent and not its own Rules, is in fact an implied acknowledgement and/ or acceptance by it that its own Rules do not expressly exclude code 0018 tariff modifier funding.

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5.5.8.4 Indeed, the Obesity Funding Policy is highly-discriminatory, and seeks to include obesity as a medical condition in cases where obesity is secondary to a medical condition being treated, but use obesity as a reason not to fully- fund such procedures.
5.5.8.5 We are fully in agreement with the Appellant that, when the First Respondent gives authorisation for a procedure, it should give such not only for the procedure, but also for all the necessary equipment and materials associated with the procedure, as it is impossible to divorce such items from the actual procedure. In the same vein it is impossible to divorce a valid surgical modifier from the procedure itself. In other words, once the First Respondent has accepted that a procedure is clinically appropriate (as in this case) then it cannot escape funding of the valid, non-discretionary “extras” such as surgical modifiers.
5.6 The binding nature of the contract between the Appellant’s mother and the First Respondent was also raised (by the Second Respondent). We have this to state:
5.6.1 Any contract that has discriminatory provisions embedded therein, is problematic
and cannot escape legal scrutiny. Illegal and unlawful contracts are not binding (to an extent of the illegality or unlawfulness). The terms of any “contract” between the First Respondent and its members, which are predicated on exclusionary and discriminatory practices in so far as access to treatment is concerned, must be ignored and set aside.
5.6.2 Any contract between a member and the Scheme that is discriminatory in nature, is in violation of the spirit and content of the Act and its Regulations, as no provisions in the Act and its Regulations promote or advance discriminatory practices by medical schemes. This reasoning is therefore rejected.
5.6.3 The latitude accorded to medical schemes to make Rules to deal with non-PMB conditions, was not to accord them the license to discriminate against members suffering from non-PMB conditions, and who happen to have contracted with them.
5.6.4 In any case, it is unclear as to what arguments are being raised in this appeal by both Respondents about PMB. We have dealt with this issue extensively above. In addition, the Obesity Policy cannot be an extension of the First Respondent’s Rules, and therefore the issue of the binding nature of the contract does not even arise.
5.7 The role of the Second Respondent during this appeal has not escaped our scrutiny. It has triggered deep concerns on the part of the Appeal Committee. To be precise:
5.7.1
5.7.2
The duty of the Second Respondent, which in effect is a statutory injunction, is to resolve disputes between medical schemes and their members, and not to be embroiled in, or being at the centre of the dispute itself.
We have observed, with concern, many instances where the Second Respondent raises arguments in favour of a party to the appeal which that party had not raised

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in this dispute. Resolving disputes presupposes confining itself to the issues raises
with it, or before it.
5.7.3 The moment the Second Respondent arrogates to itself the right to introduce into
a dispute issues that were not raised by either party, it risks eroding the requite
objectivity and neutrality with which it is required by the Act to resolve disputes.
5.7.4 Resolving disputes in effect implies the Second Respondent assuming a role of an arbiter or mediator, and the moment it introduces issues that were never raised by either party to the dispute, and which issues favour one party or the other, the Second Respondent in effect “enters the fray, the arena”, and wittingly or unwittingly take sides, and can be, rightly or wrongly, be viewed as aiding a party for which it raises additional issues that favour it. The Second Respondent therefore, in executing its statutory mandate to resolve disputes, should do so by
confining itself to the issues raised with it.
5.7.5 Unless the Second Respondent takes this caveat seriously, it risks compromising its
legitimacy, in the eyes of its stakeholders (i.e. parties to dispute) to carry out its
statutory mandate.
5.7.6 We further observed that the Clinical Review Committee played no role in this
matter: 5.7.6.1
5.7.6.2
5.7.6.3
5.7.6.4
5.7.6.5
5.7.6.6
Resolution of disputes by the Second Respondent, presupposes it being armed with all the facts pertinent to the dispute.
Conspicuous by its omission in this case, is the Second Respondent’s decision not to request the assistance of the CRC through the provision of a clinical opinion on issues in dispute in this appeal.
Generally, the Second Respondent almost invariably, and in its pursuit or quest to carry out its statutory mandate to resolve disputes lodged by members of medical schemes against medical schemes over claims-related disputes such as this one, would consult its Clinical Review Committee(“CRC”) for counsel and a clinical opinion.
This unexplained omission by the Second Respondent therefore suggests that, its decision either to seek or not seek the assistance of its CRC, is discretionary. It is further signalling that the Second Respondent, in making its Ruling on this matter, did not have all the information before it to make a correct, complete and informed Ruling. It is accordingly not far-fetched for the Appeals Committee to conclude that the Second Respondent may have made a different Ruling to the one it has made, had it sought the advice of its own CRC.
It is therefore questionable as to whether a Ruling by the Second Respondent regarding a claims-related dispute, is correct and complete, without the opinion of the CRC.
The exercise of discretion by the Second Respondent should be exercised with great care and circumspection, and not in a manner that does not

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5.7.7
assist the appeal process in having as much information before us, as
possible.
5.7.6.7 The Second Respondent must always bear in mind that, the role of the CRC
benefits or assists not only them, but also the Appeal Committee when
matters are escalated to this level.
5.7.6.8 Therefore, the decision by the Second Respondent to not seek and obtain a
clinical opinion regarding whether code 0018 tariff modifier should have been funded or not and why, as well as argument about PMB (as part of carrying out its statutory duty in terms of section 47 of the Act), has in effect deprived us as the Appeal Committee from having a totality of information before it.
5.7.6.9 The Second Respondent therefore failed in its statutory duty, by making a Ruling without the benefit of all the information necessary for it to make an informed, complete and correct Ruling.
5.7.6.10 Last but not least: it is not the first time that the Appeal Committee has sharply raised concerns about the Registrar’s inconsistent use of the services of the CRC. These are clearly being ignored, meaning that the role of this Committee is being undermined by that Office.
Quality of the Second Respondent’s Ruling: There were instances during this appeal where the Second Respondent either misrepresents, or contradicts the reasons advanced by the First Respondent for denying its member funding for code 0018. An example is where the Second Respondent in its Ruling states that “the modifier was excluded in line with clinical protocol in terms of Annexure D paragraph 2.2 of the First Respondent’s Rules. The Scheme reserves the right to apply a clinical protocol in respect of “Fitness for surgery” and/ or validate clinically appropriate BMI”. This was a complete and sharp contradiction to the stance of the First Respondent, namely, not having relied on any protocol in its funding decision. In addition, the First Respondent, in its representations to the Second Respondent (on why it declined authorisation for funding), never made any reference to Annexure D, paragraph 2.2 of its Rules.
Functus Officio Doctrine:
5.7.8.1 The Registrar totally ignored and breached the functus officio doctrine and
submitted two Rulings in respect of the complaint by the Appellant (at complaint stage). This was a surprise, as the Second Respondent has previously (in other appeal sittings) made several submissions: both written and oral, before the Appeal Committee about what it deems the sanctity of the functus officio doctrine. Such violation therefore, by hastily submitting Rulings to complainants which it later retracts and states that it is “reviewing”, is highly-concerning.

5.7.8

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6. FINDING
5.7.8.2 The conduct of the Registrar in this case also puts the Council into disrepute. Administration cannot communicate outcomes pursuant to the provisions of Act, and later retract them when such decisions were already communicated. It doesn’t reflect positively on Council as an institution.
6.1 Having analysed the arguments advanced by the parties to this appeal, we have this to state:
6.1.1 The Appeals Committee, based on all the evidence analysed above, and on a balance of probabilities, is satisfied that there exist valid grounds of appeal in this case, and that the Appellant has argued very efficiently, strongly and satisfactorily to support his appeal. The Appellant made a compelling case as to why there should be a favourable outcome to his appeal.
6.1.2 The Appeals Committee, based on all the evidence analysed above, and on a balance of probabilities, finds that the Respondents failed to present adequate grounds for the dismissal of this appeal. Arguments advanced by both Respondents in this matter, are not sufficiently-compelling for us to dismiss the Appellant’s appeal.
7. ORDER
This appeal is upheld.
SIGNED AT CENTURION ON THIS 2nd DAY OF JULY 2019
ADV. REBAONE GAORAELWE For THE APPEALS COMMITTEE
Mr. M. Maimane & Ms. M. Maboye Concurring.

Report in Rapport
https://www.netwerk24.com/Nuus/Hof/ekstra-gewig-ekstra-betaling-20190721


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