Parliament has been assured by the Council for Medical Schemes (CMS) that it will implement the recommendations of the section 59 investigation into alleged discrimination against black healthcare providers, and that a legally binding code of conduct to govern future fraud probes is in the pipeline.
Business Day reports that the CMS launched the investigation after black healthcare providers claimed they were unfairly targeted for audits by medical schemes and administrators under section 59 of the Medical Schemes Act.
The final section 59 investigation report, published in July last year, suggested they were more likely to be singled out for fraud investigations but found no evidence of them being targeted based on their race.
Medical schemes and administrators had told the inquiry that healthcare providers are identified by their practice number, which does not contain any racial information.
Last week, members of Parliament’s Health Portfolio Committee asked the council why it not yet acted on the recommendations of two key industry probes – the section 59 investigation and the Health Market Inquiry (HMI), which published its final recommendations in 2019.
CMS senior manager for legal services John Letsoalo said the regulator was drafting a universal code of conduct for fraud investigations by schemes and administrators under section 59 of the Act.
Current investigations have a disproportionate impact on black and smaller practices, he added.
“There is no standardisation in the industry (with) very different practices between different schemes and administrators. We hope to cultivate a uniform, standard approach,” he said.
The council has sought legal opinion on its plans for a universal code of conduct for section 59 investigations and issued a circular on 17 March setting out its guidance to the industry pending the finalisation of the code of conduct, he said.
The circular says no part of fraud, waste and abuse audit, recovery or payment processes should directly or indirectly differentiate on race. It directs the industry to review processes to ensure the disparities highlighted by the section 59 investigation panel are not repeated.
Medical schemes and administrators disputed the racial disparities identified by the panel’s statistician on several technical points, including the fact that he used surnames as a proxy for race.
In February last year, Trade, Industry & Competition Minister Parks Tau published draft regulations to the Competition Act proposing an interim block exemption for medical schemes and healthcare providers to enable them to negotiate tariffs. It was the first regulatory response from the government to the inquiry’s final recommendations.
Public response to the draft regulations has identified several shortcomings, and the regulations are currently being reviewed, said CMS head of Policy, Research and Monitoring Michael Willie. “We are trying to align them with the National Health Act,” he said.
One of the criticisms levelled at the draft block exemption regulations was that they dealt with only one isolated aspect of the inquiry’s recommendations.
The inquiry’s final report proposed a set of interlinked reforms that, in addition to establishing an independent tariff negotiating body, included interventions to manage demand, equalise risk between medical schemes, and monitor the quality of the care provided.
The Health Department’s deputy DG for regulation and compliance, Anban Pillay, said some of the inquiry’s recommendations intersected with the government’s plans for National Health Insurance (NHI).
“We would need to review whether we could implement the recommendations of the HMI or pursue a similar policy position through the NHI,” he said.
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