Medical aid body turns up heat on regulator

One of SA’s key medical scheme industry associations is on Tuesday expected to argue in the Pretoria high court that the industry registrar and health minister Joe Phaahla should face possible jail time for defying a court order to produce documents related to low-cost benefit options.

These are cheap, pareddown benefit packages that would provide less cover than the minimum stipulated by the Medical Schemes Act. The industry is keen to see the Council for Medical Schemes (CMS) introduce a regulatory framework for these options because it believes such a move would enable millions of low-income workers to afford cover and grow the stagnant medical schemes market.

The Board of Healthcare Funders (BHF) alleges that the CMS and the health minister failed to comply with a July high court order it obtained for a record explaining the continued blocking of the introduction of lowcost benefit options.

In the Pretoria high court on Tuesday, the BHF will argue that officials, including Phaahla, are in contempt of the July order and should answer why they should not face possible jail time.

The BHF believes the regulator is blocking low-cost benefit options to make National Health Insurance more palatable.

In July, it obtained an interim interdict from the same court as part of a bigger case in which it argues that the medical aid regulator’s decision to block lowincome earners from accessing a medical aid is irrational.

According to the BHF, were low-cost medical scheme options to be permitted, it would allow lower-income earners access to some private care, such as general practitioner visits and acute medication.

It has been more than seven years since the council began to develop a legal framework to enable medical schemes to offer low-cost benefit options that would be exempt from providing the full, costly suite of benefits stipulated by law.

As Business Day previously reported, the CMS still has not decided how to do this and has allowed a select group of health insurers to continue selling primary healthcare cover products that effectively do the same thing with less supervision and less customer protection.

This led a frustrated BHF to ask the court in July to declare the CMS’s failure to develop and implement a low-cost framework as irrational and unreasonable. It wants a record of how decisions against low-cost options were made to supplement its legal argument. While the CMS provided many pages of publicly available documents, the BHF was not satisfied.

In court papers, BHF lawyer Neil Kirby said that prior to the July order for documents only the CMS “participated”, while the minister “did not oppose”. To date “the documents and information listed in the [order] have still not been produced”.

The CMS indicated it would appeal against the July order but, says Kirby, this went beyond the time limit of the July order. The continued lack of compliance with the order, says Kirby, “delays the progression” of the

bigger case against the CMS.

The minister, says Kirby, “has completely ignored the rules and the order in circumstances where the order has specifically been brought to his direct attention. There can be no excuse for his contempt.”

In response, CMS attorney Jehiel Thema says the matter is not urgent and claims it is “an abuse of court process”. He says the BHF has not made out a case why the matter could not be heard in due course.

As to why it has not yet complied, the CMS says it is finalising its papers for leave to appeal. Once these are filed, the July order is suspended.

Head of health regulations in the department of health Anban Pillay filed papers on behalf of the department and the minister, making similar points as the CMS about the lack of urgency and filing leave to appeal. He says the minister has always understood that it is the CMS’s decisions being challenged and, as the CMS is an “independent body”, it manages affairs independently of the minister.

The minister, says Pillay, has made “no decision regarding low-cost benefit options”, since the CMS itself has not made such a decision, which must be confirmed by him. In other words, there are no documents the minister can provide even if he wanted to. He cannot be in contempt since the dispute is between the BHF and CMS.