Network Healthcare Holdings Limited (Netcare)

12 January 2005

Dear Ms Mjoli


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;


  1. 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.

Tariffs applicable

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;

    1. The quantum; the NHRPL as published for Private Hospitals is approximately 25% lower than the lowest agreed Tariff with any Medical Aid Scheme.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. 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".
    8. 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.
    9. 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.


  1. Direct Compensation to Providers for Emergency treatment
  2. 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..


  3. 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;





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;


Yours faithfully

Electronic copy thus not signed

Mark Bishop

Group Funder Relations Manager

Telephone: +27 (0)11 301-0377 · Fax: Corporate +27 (0)11 301-0596

Website: · E-Mail: [email protected]