CMS tells Discovery Health and NetcarePlus to stop selling prepaid vouchers

The Council for Medical Schemes (CMS) has told Discovery Health and NetcarePlus to stop conducting the business of a medical scheme, after Discovery Health launched a new digital health innovation enabling people to buy vouchers for primary healthcare services in the private healthcare sector.

This announcement of enforcement action by the CMS against Discovery Health and NetcarePlus, in terms of section 20 (1) of the Medical Schemes Act, for “conducting the business of a medical scheme” comes after The Citizen asked the CMS if this product is not the same as the Discovery Comprehensive PrimaryCare and Discovery Essential PrimaryCare products that landed Discovery in hot water before.

According to the CMS, Discovery and NetcarePlus “are selling healthcare service vouchers” under the names “Discovery Prepaid Health” and “NetcarePlus vouchers” to the public for access to mostly general practitioner services (in-person or virtually) with options to include medication. These vouchers are sold online, on banking platforms and by retailers.

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The Medical Schemes Act describes the “business of a medical scheme” as the business of undertaking, in return for a premium or contribution, the liability associated with:

• providing for the obtaining of any relevant health services
• granting assistance in defraying expenditure incurred in connection with the rendering of any relevant health service or
• rendering a relevant health service, either by the medical scheme itself, or by any supplier or group of suppliers of a relevant health service or by any person, in association with or in terms of an agreement with a medical scheme.

Discovery Health and NetcarePlus have contracted with healthcare providers who are compensated through the voucher model. The CMS says it understands that doctors are paid less than they would ordinarily be paid by cash paying members.

Discovery Health and NetcarePlus receive a fee for the facilitation of this service which allows consumers to access healthcare services and in return, they assume liability or risk to ensure that the customer receives the service.

The CMS says it has instructed Discovery Health and NetcarePlus to cease conducting the business of a medical scheme without the requisite approval from the CMS and to make arrangements to refund consumers who have purchased these vouchers.

Dr Ryan Noach , CEO of Discovery Health, said in a statement in response that Discovery Health has received a directive from the council for Medical Schemes regarding the prepaid product and will respond in due course.

“Discovery’s intention in launching discovery Prepaid Health is to offer innovative access to affordable high quality care. To the best of our understanding there is no insurance component to this product. We took steps prior to launching to ensure that the structure is fully compliant with relevant legislation. We will be engaging with the regulator accordingly.”

According to a statement issued by Discovery at the beginning of December when the platform was launched, the first offering will be a R300 voucher for a general practitioner (GP), including the medicines dispensed by the doctor.

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Noach then said Discovery Prepaid Health would broaden access to high quality treatment and medicine. He said Discovery wanted the prepaid vouchers to become as universal as buying prepaid airtime.

The appeals board of the CMS decided last month to uphold the appeal of the Board of Healthcare Funders (BHF) against a decision of the Council for Medical Schemes last year to grant Discovery Life Limited an exemption for primary care products.

The BHF appealed the decision to grant Discovery Life an exemption because it believed it undermined the principles of social solidarity and cross-subsidisation, saying there were no exceptional circumstances justifying the exemption and the exemption was granted for insufficient reasons.

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