FUNDING
Private hospitals are not funded by the State and are totally independent of government hospitals. Funding of private hospitalization takes place through various financial mechanisms. These include:
Self Funding or Private Funding
Private hospital clients fund their hospitalization out of their own personal money. This method of payment is becoming more evident as many clients would rather pay out of their own pocket for private healthcare than attend public sector health establishments. Many wealthier patients prefer out of pocket payments to medical scheme membership.
Medical Scheme Funding
There are about 7 million medical scheme members in South Africa. In terms of the Medical Schemes Act (No. 131 of 1998) no person shall carry on the business of a medical scheme unless that person is registered as a medical scheme under Section 24.
The Medical Schemes Act states the following:
Charges by suppliers of service:
Section 59 states the following:
- A supplier of a service who has rendered any services to a member or to a dependant of such a member in terms of which an account has been rendered, shall, notwithstanding the provisions of any other law, furnish to the member concerned an account or statement reflecting such particulars as may be prescribed. (see Regulations below)
- A medical scheme shall, in the case where an account has been rendered, subject to the provisions of this Act and the rules of the medical scheme concerned, pay to a member or a supplier of service, any benefit owing to that member or supplier of service within 30 days after the day on which the claim in respect of such benefit was received by the medical scheme.
- Notwithstanding anything to the contrary contained in any other law a medical scheme may, in the case of 4:
(a)any amount which has been paid bona fide in accordance with the provisions of this Act to which a member or a supplier of health service is not entitled to; or
(b)any loss which has been sustained by the medical scheme through theft, fraud, negligence or any misconduct which comes to the notice of the medical scheme, deduct such amount from any benefit payable to such a member or supplier of health service.
Regulations in terms of the Medical Schemes Act state the following:
Accounts by suppliers of services:
The account or statement contemplated in section 59(1) of the Act must contain the following -
(a) the surname and initials of the member;
(b) the surname, first name and other initials, if any, of the patient;
(c) the name of the scheme concerned;
(d) the membership number of the member;
(e) the practice code number, group practice number and individual provider registration number issued by the registering authorities for providers, if applicable, of the supplier of service and, in the case of a group practice, the name of the practitioner who provided the service;
(f) the relevant diagnostic and such other item code numbers that relates to such relevant health service;
(g) the date on which each relevant health service was rendered;
(h) the nature and cost of each relevant health service rendered, and where the supplier of service supplied medicine to the member concerned or to a dependant of that member, the name, quantity and dosage of and net amount payable by the member in respect of, the medicine;
(i) where a pharmacist supplies medicine according to a prescription to a member or to a dependant of a member of a medical scheme, a copy of the original prescription or a certified copy of such prescription, if the scheme requires it;
(j) the relevant numbers contemplated in sub-paragraph (e) of the referring or prescribing practitioner;
(k) where mention is made in such account or statement of the use of a theatre -
(i) the name and relevant practice number and provider number contemplated in sub-paragraph (e) of the medical practitioner or dentist who performed that operation;
(ii) the name or names and the relevant practice number and provider number contemplated in sub-paragraph (e) of every medical practitioner or dentist who assisted in the performance of that operation; and
(iii) all procedures carried out together with the relevant item code number contemplated in sub-paragraph (f); and
(l) in the case of a first account or statement in respect of orthodontic treatment or advanced dentistry, a treatment plan indicating -
(i) the expected total amount in respect of the treatment;
(ii) the expected duration of the treatment;
(iii) the initial amount payable; and
(iv) the monthly amount payable.
Because of changes to the Competition Law tariffs are no longer negotiated or agreed to jointly by providers of medical care and the funders of medical care. Most private hospitals enter into agreements with individual medical schemes about benefits that will be paid to private hospitals. Many medical schemes no longer pay private hospital accounts in full and it is therefore very important to discuss costs with the hospital and treating doctor as well as the medical scheme before admission to the private hospital.
Private hospital bills do not include the treating doctors’ fees, anaesthesiologists’ fees, pathologists, radiologists, physiotherapists and other health professionals’ fees.
All medical scheme members must obtain an authorization number prior to admission for all booked procedures and must obtain an authorization number as soon as business hours commence after an emergency admission. This authorization number does not, however, guarantee payment. All persons admitted to private hospitals remain liable for all costs incurred despite being members of a medical scheme.
Other Payment Mechanisms
COID Act : In terms of Commission for Occupational Injuries and Diseases Act the Compensation Commissioner is liable for all reasonable medical costs arising from work related injuries or diseases. A special COID tariff is published annually. All COID patients must be registered with COID by completing all the required reports and forms.
COID contact details are: P O Box 955
PRETORIA, 0001
Tel: 012 319-9410
Fax: 012 324-8343
http://www.labour.gov.za
Road Accident Fund
Patients injured in road accidents may be eligible for payment of their medical expenses. Unfortunately the legal process preceding any decision concerning payment of medical expenses related to a road accident can take an inordinate length of time. Blame is also determined and apportioned before any payment is made.
Cost Estimates
Private hospitals are not always able to provide accurate cost estimates due to the many variables. Many factors influence costing such as length of time spent in theatre, time in hospital, level of care e.g. time spent in ICU and the use of catheters and internal or external fixators, to name just a few.
Hospital cost estimates also exclude fees for doctors, pathologists, radiologists, physiotherapists and other health professionals.
General Payment Questions
Members of medical schemes are strongly advised to contact their schemes PRIOR to admission to hospital to find out what payment arrangements they must make. Some schemes may pay only a portion of the hospital bill directly to the hospital in which case the member will have to make arrangements to pay the difference. Other schemes may not pay the hospital at all but may refund the member a portion of the bill. In this case the member may be required by the hospital to make some kind of payment in advance or supply a guarantee of some kind that payment will be made or both. Yet other schemes may pay the bill in full directly to the hospital in which case there is unlikely to be a charge to the member. Medical scheme members should also obtain a list of designated Service Providers from their medical schemes.
Complaints in regarding Medical Schemes
HASA recommends that members who have complaints about any Medical Scheme, attempt to resolve them with the Scheme directly. In terms of the Act, all Schemes are required to have a ‘dispute committee’, which is responsible for the handling of such complaints. Members should contact their respective Scheme and request details in this regard. It is also recommended that complaints be submitted in writing.
If for whatever reason it is not possible to resolve the complaint with the Scheme, the member may contact the Registrar of Medical Schemes and lodge the complaint with his office. The procedure for this is as follows:
- Write a letter in which all the details of your complaint are recorded, together with any relevant documentation (which should be attached).
- Address the complaint to the Registrar of the Council for Medical Schemes.
- Lodge this complaint within three months of a decision of the ‘Dispute Committee’, and no later.
Their contact details are: Complaints Department
Council for Medical Schemes
Private Bag X34
Hatfield,
0028
Tel: 012 431-0508
Fax: 012 431-0547
complaints@medicalschemes.com
