The medical schemes regulator has banned the imposition of excessive co-payments on patients who choose health-care providers outside the networks chosen by their medical schemes.
While the move potentially has implications across the private health-care sector, it will bring particular relief to independent pharmacies shut out of these networks and give patients greater choice in where they purchase their medicines.
Medical schemes have for many years used designated service providers (DSPs) to help manage costs, but they have drawn criticism for steering patients to courier and retail pharmacy chains at the expense of independent pharmacies that do not belong to their approved networks.
Some schemes have also drawn fire for levying stiff penalties of up to 40% of the total cost of a prescription on members who opt to use pharmacies that do not belong to a DSP, according to the Independent Community Pharmacy Association (ICPA). These practices have limited patient choice and hurt the businesses of independent pharmacies that draw a significant portion of their income from the fees they charge for dispensing medicines.
In a notice published in the government gazette on April 23, the Council for Medical Schemes (CMS) declared two business practices as undesirable in terms of the Medical Schemes Act.
The notice, which came into immediate effect, bans schemes from levying penalties greater than the difference between the rate charged by a health-care provider belonging to their approved network and one that does not. It also prohibits the appointment of a DSP without engaging in a procurement process that is “fair, equitable, transparent, competitive and cost-effective”, according to the gazette.
ICPA chair Sham Moodley said the organisation had been fighting for an end to the penalties imposed on patients opting to use pharmacies that did not belong to their medical schemes’ DSPs for more than a decade.
The “punitive” co-payments imposed by some medical schemes had compelled their members to use specific pharmacy chains or courier pharmacies, at times to their detriment. Patients with complex medical conditions who were forced to use courier pharmacies were particularly vulnerable, as emergency medicine changes could not always be fulfilled timeously by these companies, and they faced stiff financial penalties if they turned to non-DSP pharmacies, he said.
The declaration had the potential to improve patient care, as many medical scheme members receive their chronic medicine via a DSP and obtain acute and over-the-counter medication care from a different pharmacy, said Moodley. Splitting patient care in this manner left pharmacists trying to do their job “with one hand tied behind their back”, he said.
The Board of Healthcare Funders, one of SA’s key medical scheme industry associations, was not immediately available to comment. Medscheme, one of SA’s biggest medical scheme administrators, was also not available for comment at the time of going to print.
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