Thursday, 30 May, 2024
HomeA FocusCMS’ precedent setting ruling against Discovery's 'irrational decision-making'

CMS’ precedent setting ruling against Discovery's 'irrational decision-making'

In "a scathing and precedent-setting ruling" against Discovery Health Medical Scheme, the Council for Medical Schemes (CMS) may open the door to force schemes to pay for treatment not available in state hospitals, reports Business Day. A more cautious analysis in Business Insider says that while the ruling does not arbitrarily expand benefit coverage, it "prevents the restriction of benefits on arbitrary criteria – such as a crude reference to practice in public services".

The CMS ruling follows a case by an eye-disease glaucoma patient, who took on the scheme, which is administered by financial services group Discovery’s health insurance arm, after it refused to pay for an implant of a medicated device called a Xen stent to lower eye pressure as recommended by a specialist.

The report says the CMS’s ruling also puts the spotlight on the interpretation of regulations under prescribed minimum benefits, which requires medical aids to pay in full the treatment of a long list of diseases but has not been updated in 20 years. The list, which includes pregnancy, 270 diseases and 26 chronic conditions, was supposed to be evaluated by the regulator every two years from 2000, taking into account new treatments and costs, but the regulator is undertaking its first review of the list. It has been a source of disputes as there is no limit on how much medical aids must spend.

In his ruling, reports MedicalBrief, Judge Bernard Ngoepe, head of the CMS final appeals board, said, "It is mind-boggling that Discovery would be willing to fund the inappropriate treatment for R20,000 and refuse to fund an effective, affordable and cost-effective treatment for R9,000. This kind of decision-making is viewed as irrational."

He also noted that Discovery did not dispute "that the the prevailing practice/level of care in state hospitals for the treatment of [the condition] was ineffective, harmful or potentially harmful, and there was no other clinically appropriate alternative than the Xen stent".

The Xen stent had been approved by the US Food and Drug Administration, the European Union, and was used in 22 countries, including South Africa, in over 60,000 patients. Discovery, in its filing, had argued not only that clinical evidence on the effectiveness of the stent was weak, and that it was legally entitled to refuse payment for it as it was not offered in state hospitals., but that in terms of its rules, it viewed the Xen stent as "experimental, unproven or unregistered".

An interpretation of the ruling by Business Insider notes that although, in theory, the new ruling against Discovery may open the door for members of even the cheapest medical schemes to get treatments that are not offered by state hospitals, "the reality is not so straightforward".

It quotes Dr Ernst Marais, COO of Icon Oncology, which represents more than 80% of oncologists in South Africa: “It is clear that the CMS ruling does not necessarily give carte blanche for expensive cancer treatments. Instead, it is important to note that CMS ruled on a treatment that is much cheaper than the treatment that the Discovery Medical Scheme was willing to pay for. One will have to assume that clinical efficacy was carefully evaluated and taken into consideration by CMS.” 

Professor Alex van den Heever, chair in the field of social security systems administration and management studies at the Wits School of Governance, says the appeal board found against Discovery on scientific grounds. “Not only had the treatment been approved by the FDA [the US Food and Drug Administration], but the treating doctor made sound arguments about its value in this instance. It was argued that Discovery's proposed covered treatment was in fact harmful to the patient.” 

“The ruling is important principally for the manner in which it reasoned its decision. In no way does it arbitrarily expand benefit coverage to less needed and less catastrophic conditions, instead it prevents the restriction of benefits on arbitrary criteria – such as a crude reference to practice in public services.”

[link url=""]Full Business Day report (Subscription needed)[/link]

[link url=""]Full Business Insider report[/link]

[link url=""]CMS judgement[/link]

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