Sunday, November 11, 2012

Medical Law - The Medical Schemes Act and Direct Payments to Companies

By Dirk Markhen

1) A supplier of a service who's delivered any service to a individual in terms of which an account has actually been provided, will, despite the provisions of any other legislation, provide to the member concerned an account or statement reflecting such specifics as can be prescribed; 2) A medical scheme will, in the case where an account is supplied, susceptible to the procedures of this Act and the regulations from the medical scheme concerned, pay out to some member or supplier of service, any kind of benefit owing to that member or supplier of service within 1 month following the day on which the law suit in regard of such reward was attained via the medical scheme".

The question takes place whether this merely permits medical schemes to repay companies directly or whether it does in fact create a duty on medical schemes to make repayments directly to providers, as happens to be contended by providers.

The Supreme Court of Appeal, in Medscheme Holdings (Pty) Ltd and Another v Bhamjee [2005] ALL SA 16 (SCA), discovered that Mr Bhamjee, a medical practitioner, didn't have basis on which to demand that Medscheme (a registered medical scheme) pay him right away.

In this verdict, the Court appeared to recognise that despite the fact that section 59(2) produces a basis upon which medical schemes may discharge commitments due to customers by reimbursing service providers directly, the section doesn't force a medical scheme to take action when the provider had lodged an account with the medical scheme.

This perspective was validated in the fairly recently resolved and reportable matter of Tshwane Pharmacy (Pty) Ltd v GEMS that was heard by the North Gauteng High Court under case number 28532/11.

In this situation the Applicant (a service provider) applied to Court on an critical basis for an order instructing that the Respondent (a registered medical scheme) generate payment to them directly, and not to their members.

The Applicant argued that the key phrase in section 59(2) of the Act is "benefit owing to the member or provider of the service" which with a common sense decryption of the area it means that where a customer has not yet paid the service provider of the service the medical scheme doesn't have discretion but is required to pay the provider.

A Legal Court didn't agree with this debate, and held that section 59(2) has to be considered in context. Subsection (1) provides that the provider of a service who's rendered a service is obliged to furnish the member concerned with an account containing prescribed particulars. Subsection (2) then provides that whenever this account has been rendered the medical scheme can pay to the member or even the provider of the service the benefit owing to that member or provider of the service.

The Court also held that, in the context of the section, the bonus owing must make reference to the total amount owed by the member to the provider for the services supplied. The Court mentioned that it's inconsequential that the benefit results in being owing to the member by virtue of the contract involving the member and the medical scheme and, towards the supplier, by virtue of the commitment between the member and the supplier. The subsection doesn't create an obligation on the medical scheme to repay the supplier.

In addition, the Court held that the subsection clearly provides that payments is susceptible to the rules of the medical scheme, and in the case of the Respondent it's rules stated unambiguously how the Respondent has got the right to pay back either the customer and the provider of the service.

Accordingly, the Court found no cause for a duty on the Respondent to repay the Applicant directly and sacked the application with fees.

From the above it's clear that in order to ensure repayment for services provided by service providers need to either claim repayment from their patients, or make certain that they've contractual agreements with the medical schemes. For the moment, our Courts seem reluctant to enforce a statutory duty on medical schemes for making payment straight to service providers in the absence of this kind of contractual arrangement.

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