Network Healthcare Holdings Limited (Netcare)
12 January 2005
Dear Ms Mjoli
SUBMISSION - COMMENT ON ROAD ACCIDENT FUND AMENDMENT BILL
Netcare is the largest provider of Healthcare Services in South Africa and is currently the largest single creditor to the Road Accident Fund for treatment performed for patients with claims against the Road Accident Fund and accordingly has perused the proposed amendments in great depth and has chosen to comment on those amendments of direct import to Healthcare Providers.
Our comments will be directed to the following points as noted on the 2nd page of the Amendment Bill;
- Hospital or medical expenses and the proposed tariffs for these;
- Direct compensation to providers for emergency treatment;
- General comments.
- Hospital and Medical Expenses
It is acknowledged that the Fund should only be responsible for payment of all reasonable costs incurred by providers of healthcare services necessary to treat an injured person with a valid claim against the Fund.
Netcare wishes to state that we are extremely concerned that a misconception may exist that Healthcare Providers will be content with the National Health Reference Price List (NHRPL) as published by the Council of Medical Schemes as reimbursement for treatment to injured persons in terms of the RAF Act as amended.
The reasons for dissatisfaction are as follows;
- The quantum; the NHRPL as published for Private Hospitals is approximately 25% lower than the lowest agreed Tariff with any Medical Aid Scheme.
- The NHRPL for medical practitioners is not accepted as full and final payment by the overwhelming majority of doctors etc. It is a well known fact that Specialists are "contracted out" of medical scheme rates and charge any and all patients directly. These patients are then subsequently reimbursed at the medical scheme rate by their own medical aid where they have such private cover.
- Medical Practitioners are very reluctant to treat RAF patients presently despite being able to charge their highest possible tariff due to slow or non-payment thus they will certainly not be willing to treat such patients at a discount to Medical Scheme tariffs.
- No reference is made to payment terms in the Amendment Bill, and it should be noted that the RAF’s poor past performance in paying that which was due to healthcare providers mitigates strongly against any "discounted Tariff" being applicable without agreement for turnaround times and penalties for late or poor payment.
- The NHRPL is a "reference" price as published by the Council of Medical Schemes, it is meant as a guideline to medical aids to decide their own rates for services, and it is not a "mandatory" tariff.
- It is our belief that the drafters of the Amendment Bill have mistaken the Council of Medical Schemes as being a regulatory body for the Private Healthcare Industry. The Council does regulate medical schemes but has no input or control over the providers of healthcare services.
- It is therefore concerning that the Amendment in Subsection 4A (ii) says that the tariffs for private healthcare will be "prescribed by the minister after consultation with that council".
- It is legally questionable to elevate a guideline tariff published by the Council of Medical Schemes to that of a "prescribed tariff" as suggested by subsection 4A of the Amendment Bill. Indeed it should be noted that nowhere in the Medical Schemes Act, which constitutes the Council of Medical Schemes, is it suggested that that Council has the right to publish such a reference tariff.
- The recently signed National Health Bill does in Section 90(1) (v) provide that the Director General of Health may publish reference price lists for the private healthcare industry; however, the section clearly indicates that such price lists are "not mandatory".
In summary, it is our belief that should the rates as defined in the NRPL be used as the tariff to reimburse private healthcare that private providers will avoid treating all RAF patients on the grounds that it will make little economic sense to do so.
- Direct Compensation to Providers for Emergency treatment
Providers have always had the right to direct compensation in terms of s.17 (5) of the Act; however, this was restricted to those persons with a valid claim against the fund. It is acknowledged that the Amendments make allowance for payment for all persons involved in a motor vehicle accident regardless of negligence.
The limitation of the compensation to the prescribed tariff as contemplated in subsection (4A) remains a problem as detailed above.
It should be noted that any person treated by a Private Healthcare Provider is required to contract with that provider to be responsible for the costs of such treatment in their personal capacity and that any agent acting as payor on their behalf does not absolve the patient of this responsibility which is a tenet of the Law of Contract..
- General Comments
We understand the intent of the Amendments to be to manage the costs of the RAF and to ensure its sustainability, if this is so we certainly endorse this intent. However, we have a number of concerns related to the attempt to reduce what is paid out;
- Private Healthcare costs amount to less than 9% of total payments by the RAF (see RAF 2003 Annual Report); by reducing the tariffs applicable to private practitioners by 20% would result in a saving of less than 2% on the RAF budget.
- No reference in the new Amendments can be found to the concept of Arbitration as opposed to accessing the courts for settlement of claims. It is our position that Arbitration as suggested in previously withdrawn Amendments could save significant amounts of money to the RAF.
- Emergency Medical Treatment
- The extension of cover to all persons injured regardless of "blame" is of great benefit to the injured persons but does not reduce the risk to the providers.
- Providers will still only be assured of payment during the emergency stage and when this period ends is not clear in the amendments.
- Furthermore it is unclear what risk a private provider faces should a patient not be able to be transferred to a state facility once the emergency stage is deemed over.
- Reasonable Compensation
- Subsection 4A (ii) (b) indicates that the tariff contemplated should be reasonable and prescribed after consultation with the medical service providers, but this does not read well with 4A (ii) which merely says that the tariff "shall be prescribed after consultation with the [Medical Schemes] Council".
- All compensation to providers should be linked to guaranteed payment turnaround times, and allow for interest and or penalty payments if not met.
- Attorney Fees
- Although not directly relevant to Providers Claims we believe it relevant to comment that the majority of RAF patients treated at our facilities are certainly not in the position of being able to understand the vast quantities of red tape associated with making a personal injury claim for loss of earnings etc. against the RAF, making them responsible for the legal costs simply appears to restrict their entitlement to fair compensation.
- It is worth noting that the RAF’s prior history of poor management, poor payment turnaround etc. mitigates against not seeking an Advocate to represent a claimant to ensuring compensation is received.
- Netcare employs staff previously employed at the RAF and it is their opinion that any arrangement that sees Claims Handlers acting both on behalf of the Fund and the Injured Person opens the door to fraudulent behaviour on a mammoth scale.
It is Netcare’s opinion that the Draft Amendments make significant strides to ensuring that persons injured in motor vehicle accidents will receive the best emergency care possible (it is in accordance with the requirements of the National Health Bill).
However, the problems created by the proposed implementation of the NHRPL tariffs for reimbursement of private healthcare providers will negate all the positive elements of the Amendments. Private Healthcare providers will certainly be happy to accept the STRUCTURE of the NHRPL tariffs but the quantum as they are presently published is not sufficient to sustain the industry and is certainly not a "reasonable tariff" as required.
Netcare is happy to present and debate its views with any forum, please do not hesitate to contact the writer using the following contact details;
Electronic copy thus not signed
Group Funder Relations Manager
Telephone: +27 (0)11 301-0377 ·
Fax: Corporate +27 (0)11 301-0596
Website: http://www.netcare.co.za ·
E-Mail: [email protected]