No more dedicated service providers for medical schemes will be allowed, according to a notice the Council for Medical Schemes (CMS) published recently in the Government Gazette in terms of the Medical Schemes Act.
The notice declares the practices of some medical schemes to select designated healthcare providers as irregular or undesirable.
Dedicated service providers
Chapter 3 of the act allows medical schemes to select healthcare providers as dedicated service providers to diagnose, treat, and care for its members regarding prescribed minimum benefit conditions, but according to information passed on to the Registrar of Medical Schemes, some schemes:
- unilaterally and unrestrictedly determine the criteria that apply when selecting their dedicated service providers (DSPs)
- select DSPs without using a fair procurement process and without considering applications to join their DSP network from all interested and qualified service providers, thereby unfairly limiting the number of selected service providers, including pharmacies, available to provide healthcare services to members
- require members to use only the selected limited number of DSPs or risk paying exorbitant co-payments.
The CMS believes that the practice of using DSPs has prevented many healthcare service providers, including independent community pharmacies, from joining the DSP network, although they are willing and able to provide healthcare services at the same fee rate.
No more dedicated service providers
The CMS decided to ban the practice of dedicated service providers after taking into account written representations by interested people, after a notice to this effect was published in June 2017.
With the concurrence of the CMS and the minister of health, the Registrar of Medical Schemes therefore declares the business practice of dedicated service providers as irregular and undesirable for all medical schemes.
They are no longer allowed to select healthcare providers as preferred providers of diagnosis, treatment, and care without engaging in a fair procurement process which is fair, equitable, transparent, competitive and cost-effective.
According to the notice, the CMS will publish guidelines on selecting DSPs for medical schemes within 180 days.
Lee Callakoppen, principal officer of Bonitas Medical Fund, said in a statement the fund is studying and evaluating the requirements that aim to amend regulation 3 of the act which allows medical schemes to select healthcare providers as DSPs.
“We will submit written comments to the CMS to request clarity on any concerns as soon as our evaluation is complete. Our current practices are designed to protect our members as a collective as they support the preservation of the healthcare ecosystem. We will continue to act in the best interests of our members and will take all steps necessary to ensure we continue to provide them with affordable, quality healthcare.”