6 minute read
1. Key industry updates
1Key industry updates
Circular 31 of 2021: Section 61 declaration of Designated Service Providers (DSP)
Circular 23 of 2021: 2021/22 levies for medical schemes Circular 18 of 2021: Adjustment of fees payable to brokers with effect from 1 January 2021
Medical aid members are often forced to pay a co-payment or penalty fee if they want to use a provider that is not the medical scheme’s DSP. Medical schemes prefer to use DSPs as it allows them to negotiate bulk discounts and contain costs.
The Independent Community Pharmacy Association (ICPA), has been fighting this case since 2013, as many pharmacies were excluded from being named DSPs.
On 23 April 2021, Council for Medical Schemes (CMS) published Notice 214 of 2021 in the Government Gazette declaring it an “undesirable business practice” for any medical aid to charge an ‘excessive’ extra fee for not using its DSPs, following the Appeal Board judgement which ordered Council to finalise the section 61 of the Medical Schemes Act (131 of 1998) process, pertaining to the selection process of DSPs and matters relating to the imposition of excessive co-payments. The gazette effectively states that medical schemes are engaged in undesirable business practices if found to be conducting unfair selection practices when selecting DSPs and charging excessive co-payments.
The CMS was in the process of developing guidelines aimed at identifying specific instances of undesirable conduct relating to DSP selection and the charging of co-payments by medical schemes.
The CMS was going to take feedback from industry input and surveys to assess affordability in respect of co-payments. Once this was done, the CMS had indicated that they were going to publish guidelines for implementation by the industry. An appeal against the declaration was lodged in July 2021 and the outcome of this process will determine the way forward with regard to the declaration and proposed guidelines.
The CMS has published Government Gazette 44436 on the imposition of levies for medical schemes for the 2021/22 financial year. The CMS is awaiting approval for the new levy proposed for 2020/21 and 2021/22. The levy to be paid with effect from 1 April 2021 is R38.67 per member per year, which will be adjusted once the new levy has been approved. The maximum amount payable to brokers in terms of Section 65 of the Medical Schemes Act 131 of 1998 is now R101.91 plus value added tax (Vat) or 3% of the contributions payable in respect of that member, whichever is the lesser.
Protection of Personal Information Act with effect from 1 July 2021 (POPIA)
The right to privacy is protected by our Constitution and the Protection of Personal Information Act (POPIA) entrenches that right. As we know, POPIA has become law, with an effective date for compliance from 1 July 2021. Alexander Forbes has always taken the protection of personal information seriously, and with the announcement of this date, we have committed to meeting the regulatory deadlines across our organisation.
As with all financial services companies, POPIA has far-reaching implications for us. We recognise that what we will be required to implement under POPIA is, largely, an implementation of further good business practices aimed at protecting our customers’ (and others’) property i.e. their personal information.
Our Privacy Programme has been functioning for some time now, under a governance structure which is ultimately responsible to our board to ensure the necessary accountability and control around POPIA implementation. In addition, we have taken, and are continuing with, the necessary steps to determine where we need to improve as well as determining what new measures, controls, policies and actions are required. As a South African-based company, Alexander Forbes adheres to the requirements stipulated in POPIA for the transmission of personal information across international borders. These requirements will apply to all international jurisdictions and Alexander Forbes companies or subsidiaries that operate in other jurisdictions, unless they have more stringent requirements for the international transfer of personal information. In this case, those more stringent requirements will apply in addition to our internal policies.
Our boards, specialists, senior managers and staff on the programme have all been trained on POPIA and privacy principles. Staff receive ongoing security awareness messaging and will receive comprehensive training commensurate with their respective roles.
We firmly believe that the implementation of POPIA will be a journey that continues well into the future. POPIA compliance in part is a mindset shift that requires us to protect our clients, our members, our employees and companies that we do business with.
Appointment of a new Health Minister
Mathume Joseph Phaale has been appointed as Health Minister. Mr Phaale has been the Deputy Health Minister since May 2014, where he first served under Aaron Motsoaledi, and more recently under Zweli Mkhize.
Zweli Mkhize was suspended following an investigation by the Special Investigating Unit (SIU) in February 2021, to look into the R150m contract the health department awarded to an obscure communications company run by Health Minister Zweli Mkhize’s former staff members. The contract was awarded to Digital Vibes in 2019 for work on National Health Insurance and then extended to include work on the coronavirus pandemic in 2020. The department appointed tax, assurance and advisory firm Ngubane in January 2021 to investigate the contract after concerns were raised about it by the auditor-general in December 2020. Its forensic investigation report was submitted to the Minister, the SIU and President Cyril Ramaphosa.
The investigation found irregularities in the tender bid process, ranging from inconsistencies in the bid committees to a lack of disclosure of conflict of interest.
Circular 37 of 2021: Discovery Health Medical Scheme and Quantum Medical Aid Society merge
The merger between Discovery Health and Quantum Medical Aid Society was approved by the Registrar of Medical Schemes - effective 1 August 2021.
Circular 43 of 2021: Proposed amalgamation between Bonitas Medical Fund and Nedgroup Medical Aid Scheme (NMAS)
Notice has been given that the exposition document of the proposed amalgamation between Bonitas Medical Fund and NedGroup Medical Aid Scheme was open for inspection until 3 September 2021. It was then open for comment up to 5 October 2021.
Circular 46 of 2021: Proposed amalgamation between Sisonke Health and Lonmin
Notice has been given that the exposition document of the proposed amalgamation between Sisonke Health Medical Scheme and Lonmin Medical Scheme was open for inspection for 21 working days from 18 August to 15 September 2021. It was then open for comment for a further 21 days from 16 September to 15 October 2021.
The CMS has approved the new levy proposed for 2020/21 and 2021/22. The levy to be paid with effect from 1 April 2022 is R42.27 per member per year.
The CMS confirms the merger of Sizwe Medical Fund and Hosmed Medical Scheme effective from 1 November 2021. Furthermore, the Registrar approved the name change of the amalgamated scheme to Sizwe Hosmed Medical Scheme.
The CMS has approved the merger of Bonitas Medical Fund and Nedgroup Medical Aid Scheme effective 1 January 2022.
