Slide 1 - The FPI

© Benguela Health (Pty) Ltd 20101

Regulatory Protection for Medical Scheme Beneficiaries

FPI

3 August 2010

Durban

By

Esmé Prins-van den Berg

Director

Benguela Health (Pty) Ltd

Agenda

• Medical scheme trends• PMBs• ICD10 coding• Waiting periods• Tariffs• Medicine pricing• Generic substitution• Dispensing fees• Issues to consider when advising clients



Medical Scheme Trends

Medical Scheme Coverage 2008

• Principal members: 3 388 582 (2009: 3 490 493)• Beneficiaries: 7 874 826 (2009: 8 072 180)• Population Coverage

– 2008: 48.7m…16% medical scheme coverage– Best estimate 2009: 49.32m…16.4% medical scheme coverage

4 © Benguela Health (Pty) Ltd 2010

2008 OPEN SCHEMES RESTRICTED SCHEMES TOTAL

Principal members 2 136 960 1 251 622 3 388 582

Dependants 2 751 946 1 734 298 4 486 244

Beneficiaries 4 888 906 2 985 920 7 874 826

Trends: Medical Schemes

• Consolidation trend…– 2008: 119 schemes– Jan 2009:110 schemes– Dec 2009: 112 schemes– Will be further reduced due to amalgamations and liquidations….

• Bestmed & Telemed; Momentum Health & Ingwe; Oxygen & Medshield; GEMS & Medcor; Liberty Health & Medicover; Discovery Health & Umed…

– Administrator consolidation: Medscheme & Old Mutual; Eternity Health & Sanlam; Momentum Health & Metropolitan


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Benefit Pay-out: 1999-2008


Increases in expenditure:• FFS (over-servicing)• Imbalance between schemes and providers (e.g. hospital

groups)

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Non-Health Care Expenditure: 1999-2008 (2008: R9.7b)

• Increase: 8.1%• Under CPIX


Medical Schemes: Financial Health

• Gross contribution income– 2008: R74b (R800.80 pabpm)– 2009: R84.9b (R889.10 pabpm)

• Operating Results

• Average solvency– 2008: 36.6%– 2009: 32.6%


2008 2009

Deficit before investment & other income

R929.4m R2.8b

Surplus after investment & other income

R2.4b R655.4m


Prescribed Minimum Benefits (PMBs)

PMBs

• Annexure A: www.medicalschemes.com • 2000

– Diagnosis and Treatment Pairs – DTPs– 270 conditions

• 2003– Emergencies– Statutory definition

• 2004– Chronic Disease List – CDL– 26 conditions

10© Benguela Health (Pty) Ltd 2010

http://www.medicalschemes.com/

PMBs• 270 Diagnosis and Treatment Pairs (DTPs)

– Code 155E• Diagnosis: Myocarditis; cardiomyopathy; transposition of great vessels;

hypoplastic left heart syndrome• Treatment: Medical and surgical management; cardiac transplant

– Code 903D• Diagnosis: Bacterial, viral, fungal pneumonia• Treatment: Medical management, ventilation


PMBs

– Code 168S• Diagnosis: HIV Infection• Treatment:

– HIV Voluntary counseling and testing – Co-trimoxazole as preventive therapy – Screening and preventive therapy for TB – Diagnosis and treatment of sexually transmitted infections – Pain management in palliative care – Treatment of opportunistic infections– Prevention of mother to child transmission of HIV – Post-exposure prophylaxis following occupational exposure or sexual assault – Medical management and medication, including the provision of anti-retroviral

therapy, and ongoing monitoring for medicine effectiveness and safety, to the extent provided for in the national guidelines applicable in the public sector


Medical and Surgical Management

• Medical management or surgical management, describes standard of treatment required, namely prevailing hospital-based medical or surgical diagnostic and treatment practice for specified condition

• Significant differences between public and private sector practices → follow public sector practice (national/provincial protocols) →No public sector protocol → Consultation with provincial authorities to ascertain practice

• It does not restrict setting to a hospital where relevant care should be provided

• It does not prevent delivery of any PMB on outpatient basis or in another setting

• Treatment and care to be rendered where it is clinically most appropriate


PMBs

• Emergencies– Sudden and at the time an unexpected onset of a health condition – Requiring immediate medical or surgical treatment,– Failure of which

• Will result in serious impairment to bodily functions or • Will result in serious dysfunction of bodily organ or part or • Would place the person’s life in serious jeopardy

• Conditions on Chronic Disease List (CDL) – Statutory algorithms/treatment paths


Chronic Disease List (CDL)

• Addison’s disease• Asthma• Bipolar Mood Disorder• Bronchiectasis• Cardiac Failure• Cardiomyopathy Disease• Chronic Renal Disease• Coronary Artery Disease• Crohn’s Disease• Diabetes Insipidus• Diabetes Mellitus Type 1 & 2• Chronic Obstructive Pulmonary

Disorder

• Dysrhythmias• Epilepsy• Glaucoma• Haemophilia• Hyperlipidaemia• Hypertension• Hypothyroidism• Multiple Sclerosis• Parkinson’s Disease• Rheumatoid Arthritis• Systemic Lupus Erythromatosis • Schizophrenia• Ulcerative colitis


PMBs• 2004:

– DSPs (Designated Service Providers)…preferred providers / preferred provider networks

• Funding– Full and unlimited funding of diagnosis, treatment and care costs– Diagnosis-based (ICD10 codes)

• What are ICD10 codes?– International Statistical Classification of Diseases and Related Health

Problems (ICD10)– Consists of +/- 12 000 diagnostic codes– Listed alpha-numerically– Used to index health care data– Confidentiality

• Why are they important?– Correct benefit pool– Full funding– Different rules for PMBs, co-pays, etc.

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PMBs– Co-pays for

• Voluntary use of non-DSPs• Clinically appropriate and effective drug on formulary – beneficiary

chooses alternative drug knowingly• Medicines: Reference price lists

– Full and unlimited funding for involuntary use of non-DSPs– Involuntary use

• Emergencies• No DSP within reasonable proximity of work or residence of beneficiary• Service unavailable or unreasonable delays

– Benefit limits?– Biological drugs / Biosimilars?– PET CT scans?

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PMBs

• Interpretation of “full costs”– CMS: Appeal Committee Decisions– Industry: Opposing Legal Opinions

• Many schemes and administrators pay benefits in accordance with scheme rules

• CMS: Must enforce compliance with own legislation• Industry Task Team

– CMS/DoH– Funders– Providers– Consumers

• Code of Conduct: 30 July 2010• Change in legislation?



Managed Care

• PMBs may be subject to managed care interventions– Protocols– Disease management programmes– Formularies– Networks– Pre-authorisation

• Not for emergencies• Therefore

– Access to benefits may be subject to compliance with such interventions

– E.g. registration on medicine benefit programme could be conditional prior to being able to access benefit

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Formularies & Protocols

• Regulations 15H (Protocols) & I (Formularies)• Evidence-based medicine, cost-effectiveness and affordability

– Evidence-based medicine = • Conscientious, explicit and judicious use of current best evidence in

making decisions about care of beneficiaries whereby individual clinical experience is integrated with best available external clinical evidence from systematic research

• Provide to providers, beneficiaries, public on request• Appropriate substitution where ineffective or (would) cause

adverse reaction without penalty to beneficiary– Motivations by doctors– Cannot for example impose higher co-payment


Waiting Periods S 29A, Regulation 12

• Condition-specific– Max period: 12 months no benefits in respect of condition– Condition for which medical advice, diagnosis, care or treatment

recommended/received in 12 months prior to application for membership of medical scheme

– Medical report may be required by scheme … must pay costs of any medical tests or examinations required by scheme for purposes of compilation of report

• General– Max period: 3 months no benefits

• Change benefit options: Only unexpired periods of waiting periods, no new periods

• Child dependant born during period of membership: No waiting periods


Waiting Periods

• Category 1– First time joiners– Applies for membership > 90 days after previous membership– Waiting periods

• General and• Condition-specific• Apply to PMBs


Waiting Periods

• Category 2– = 24 months continuous medical scheme benefits

• Previously beneficiary of medical scheme for continuous period of 24 months

• Termination < 90 days prior to application– Waiting periods

• Condition-specific– Not to PMBs

• Unexpired portion of general or condition-specific imposed by previous scheme


Waiting Periods

• Category 3– > 24 months continuous medical scheme benefits

• Previously beneficiary of medical scheme for continuous period of > 24 months

• Terminated < 90 days prior to application– Waiting periods

• General– Not to PMBs

• Unexpired portion of general or condition-specific ?


Waiting Periods

• Category 4– Changes for reasons of employment

• Previously beneficiary of medical scheme• Terminated < 90 days prior to application• Because of change in employment or• Employer changes/terminates medical scheme cover of employees:

Change at beginning of financial year or reasonable notice given for transfer at beginning of financial year

– Waiting periods• No waiting periods• Only unexpired portions or previously imposed waiting periods

– General– Condition-specific


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WAITING PERIODS

Category 3 Month General

12 Month Condition-Specific

Applicable to PMBs

New applicants/persons not members for preceding 90 days

Yes Yes Yes

Applicants who were members for 2 years

No Yes No

Applicants who were members for more than 2 years

Yes No No

Change of benefits No No N/A

Child dependant born during period of membership

No No N/A

Involuntary transfer - change in employment or employer change scheme

No No N/A

Source: CMS © Benguela Health (Pty) Ltd 2010

Beneficiaries’ Rights

• Entitled to full and unlimited funding for PMBs….exceptions (DSPs)….schemes apply differently….often providers charge more for PMBs

• Payment may not occur from savings accounts• No benefit limits• Must submit accurate ICD codes• Access to protocols and formularies• Challenge evidence basis of formulary and/or protocols• Ineffective/adverse reactions - protocols and formularies - need

support of treating practitioner to enforce change at scheme level


Disputes Medical/

Clinical Advisor

Medical/

Clinical Governance Committee

Principal Officer

Board of Trustees

Disputes Committee /

CMS

Courts


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Ex Gratia

In the Pipeline: Review of PMB Package (2008)

RevisedPMB Package

In-Hospital Care

DTPs

CDL

Out-of-Hospital Care

DTPs/CDL

Primary and Preventative Care

Basic Dentistry

Basic Optometry

Medicine ListsNegative List (Exclusions)

Po

tentially A

bo

ve T

hresh

old

Ou

t-of-

Ho

spital B

enefits



Tariffs

Procedural Coding and Tariffs

• RAMS: Statutory tariff (Contracted in vs Contracted out) (Until 1993)

↓• BHF (scale of benefits) & SAMA (Private Tariffs)

↓• Competition Commission: 2004…anti-competitive

↓• CMS (NHRPL) → DoH (RPL) (2007)

– National Health Act (Regulations)• RPLs• Benchmark tariffs

– Doctors can determine own tariffs– Schemes have specified reimbursement rates

• Court Case February 2010– RPL and Regulations declared null and void retroactively until 2007


Procedural Coding and Tariffs

• HPCSA (Ethical Price List)– Scrapped– RPL should be benchmark– Only charges above RPL with informed consent

• Central negotiations again in future?– Draft legislation– Independent Commission

• Where does this leave the beneficiary?• Over-charging?

– HPCSA



Medicines

Medicine Pricing• Medicine pricing

– Single Exit Price (2004)– Formula– Annual increases authorised by DG of Health– International Benchmarking


Generic Substitution• Obligation on pharmacists (and dispensing doctors)…Medicines Act• No substitution if

– Forbidden by patient– Prescriber wrote in own hand next to item ‘no substitution’– Retail price of generic is higher– MCC declares product not substitutable

• MCC Guidelines (April 2010)– Only biosomilars non-substitutable– Previously also

• With narrow therapeutic range• Shown erratic intra and inter patient responses• Dosage forms can result in clinically significant bio-availability problems• Intended for the critically ill, geriatric and paediatric patients

• Reasonable steps to inform of substitution• Generally no/lesser co-payment


Licensed Dispensers: Dispensing Fees

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Dispensing Fees

SINGLE EXIT PRICE (PROPOSED NEW FEES)

DISPENSING FEE(MAX; EXCL VAT)

< R65 (≤ R75) 30% of SEP (30% of SEP)

≥ R65 (> R75) R20 (R22.50)


Pharmacists: Proposed Fees

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Dispensing Fees

SINGLE EXIT PRICE DISPENSING FEE(MAX; EXCL VAT)

< R75 R6 + 46% of SEP

≥ R75 < R200 R15 + 33% of SEP

≥ R200 < R700 R51 + 15% of SEP

≥ R700 R121 + 5% of SEP


• Retail pharmacists to annually disclose certain information to Director-General of Health

• Display dispensing fee structure in pharmacy• Provide detailed invoices


Issues to be Considered

Advice to Clients

• Complex environment• Expensive• Financially healthy medical scheme…will scheme be around in the

future?• Good governance• Benefits

– Benefits when in need– Costly treatments covered

• Hospitalisation• Cancer

• Good administration• Compliant with legislation• Business ethic• Impact of NHI• Affordability



Conclusion


Questions?

Thank You

[email protected]

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Slide 1 - The FPI

Health & Medicine

Transcript of Slide 1 - The FPI