Understand your medical scheme’s co-payment rules

co-paymentIn order to provide lower-cost medical cover, most medical schemes offer plan options where co-payments apply for certain procedures. These procedures tend to be elective surgeries such as a colonoscopy or joint replacement and are clearly defined in the medical schemes brochure.

There is, however, some confusion around when co-payments may apply for Prescribed Minimum Benefits (PMBs). A court ruling in 2011 found that medical schemes must pay for PMBs in full and co-payments may not apply. Prescribed Minimum Benefits stipulate the minimum level of diagnosis, treatment and care that medical schemes must pay in full from the risk portion, and not from member savings. These cover chronic conditions such as cancer and diabetes as well as any emergency conditions.

This, however, is not a blanket ruling and as a member you need to understand that if you do not follow the scheme rules, co-payment could still apply.

According to Dr Elsabé Conradie of the Council for Medical Schemes (CMS), if a member chooses to use the services of a non-designated service provider then a co-payment can be charged by a medical scheme.

Use a Designated Service Provider

A designated service provider (DSP) is a doctor, specialist, hospital or any medical service provider that has been contracted to the medical scheme. If you, as a member, decide not to use the service provider elected by your scheme, even if it is for a treatment that falls under Prescribed Minimum Benefits, then the scheme is entitled to charge a co-payment.

If, however, you involuntarily have to use the services of a non-designated service provider, such as in the case of an emergency, then the scheme will pay the bill in full.

Conradie provides the following case that came before the Council for Medical Schemes to illustrate when a co-payment becomes due:

  • 1 Jan – A member who is on holiday in the Western Cape is hiking on a mountain when she slips, falls and breaks a shoulder. She is rushed to the nearest hospital and is admitted as an emergency and is diagnosed with a PMB condition – closed fracture/dislocation of limb bones, code 902H, the treatment of which is specified in the Medical Schemes Act as reduction or relocation of the limb.
  • 2 Jan – The member spends one night in hospital and decides to fly back to Johannesburg, as she prefers to receive further treatment in her home town.
  • 3 Jan – She consults with a non-DSP orthopaedic specialist surgeon who advises her that she needs a total shoulder replacement. Authorisation was granted by her medical scheme for the procedure as well as the level of the re-imbursement of her claims should she use the services of a non-DSP.
  • 4 Jan – the reconstruction of the member’s shoulder was performed at a non-DSP hospital and the member stayed in hospital for four days.
  • The medical scheme paid for all medical bills in full, as it regarded the admission at the first hospital as an emergency PMB admission. However, it short-paid some of the claims related to the second hospitalisation episode as the member used services of a non-DSP surgeon. The medical scheme also imposed a limit on the prosthesis used as per its rules as well as a co-payment for joint replacement.
  • The member disputed the co-payment imposed as well as the short-payment of some of her claims.

In arriving at its decision, The Council’s appeals committee found that:

  • Shoulder replacement is not a PMB level of care. The PMB level of care in respect of the member’s injuries is specifically stipulated in Annexure A of the regulations of the Medical Schemes Act as “reduction and relocation, not replacement”.
  • The procedure performed in Johannesburg did not constitute an emergency as contemplated in the regulations of the Act and there was nothing preventing the patient from receiving services from her medical scheme’s DSPs.
  • The appeals committee held that the medical scheme acted in accordance with its rules when imposing a co-payment for a joint replacement and that the shortfall on the amount charged for the prosthesis was justified since the procedure (shoulder replacement) was not a PMB level of care.

 This article first appeared in City Press.