Critical medical aid NHI change that has to be addressed right now

 ·2 Jun 2024

The new National Health Insurance (NHI) laws in South Africa have been signed but are not yet in effect – but legal experts at Bowmans have pointed out an anomaly relating to maternity and pregnancy-related benefits in medical aids that are at serious risk if the president doesn’t intervene.

According to Bowmans, the NHI Act stipulates that the Medical Schemes Act is to be amended with immediate effect to remove maternity and pregnancy-related benefits from the scope of medical schemes.

This is before the NHI is even fully implemented. This poses a serious problem for this type of coverage under medical aids “unless the President addresses this apparent anomaly by proclaiming a deferred effective date for that amendment”.

Bowmans noted that it is not clear from the NHI Act whether South Africans may simply opt out of the scheme, as the language of the NHI Act is ambiguous in this respect.

“On the assumption that one can opt-out though, once the Minister of Health declares the NHI to be fully implemented, medical schemes will not be able to offer most of the basic services that they currently provide, so healthcare services, products and treatment would need to be paid for on an ‘out of pocket’ basis,” they said.

This holds major ramifications not only for those looking for healthcare in the country, but also healthcare providers.

“For enterprises that operate outside the health sector, there will be impacts on their employment relationships and healthcare subsidies, post-retirement medical aid arrangements and the like, and these will need to be considered by employers,” the experts said.

In addition to this, enterprises in the health sector will need to be familiar with the significant shifts in procurement, pricing and contracting, and consider how this affects them from a strategic planning perspective.

The public healthcare sector will also be heavily impacted, with approximately 90% of healthcare administration by provinces to be removed from the provincial sphere and reassigned to the NHI Fund, and accordingly, the associated parts of their budgets (provincial equitable share and grant funding) eassigned as well.

“The Department of Health will need to engage provinces on the anticipated impacts on provincial staffing in relation to healthcare and financial administration,” Bowmans said.

For healthcare practitioners and private hospitals and pharmacies, the entire sector will be impacted.

According to Bowmans, healthcare practitioners will still be entitled to practice for their own account, but they will need to contract with the NHI Fund. Practitioners will not, however, be entitled to set their own rates for NHI-funded benefits.

“Rates will be set by the NHI Fund. Patients will also have to first access healthcare services at a primary healthcare level. Patients will not be able to consult a specialist directly,” they said.

Healthcare service providers and establishments will also need to be accredited by the NHI Fund in order to participate in the NHI system—that is, in order to render services to NHI users and to be paid for those services by the NHI Fund.

“This accreditation is in addition to the registration with a statutory health professional council and certification by the Office of Health Standards Compliance.”

The criteria for this accreditation include:

  • Minimum range of services;
  • Appropriate number and mix of healthcare professionals;
  • Adherence to treatment protocols including prescribing medicines and procuring products from the Formulary;
  • Compliant referral pathways;
  • Contributing to the national health information system; and
  • Adhering to the national pricing regimen.

Accreditation lasts for five years but appears to renew automatically unless there is a default.

Bowmans also pointed to the various Acts and regulations that will be changed by the laws, including:

  • The NHI Act amends the Medicines and Related Substances Act to introduce the NHI Fund’s influence into the appointment of members of the pricing committee, but otherwise proposes no amendments to that Act.
  • It amends the Prevention of and Treatment for Substance Abuse Act by shifting the Minister’s procurement and contracting powers under that Act to the NHI Fund.
  • The NHI Act also amends the Medical Schemes Act to remove maternity and pregnancy-related services (including termination) from the business of a medical scheme.

“It is not clear how these changes may indirectly impact supply, demand, cost, range and innovation in relation to private services, including retail pharmaceutical and the related private supply chains.

“It does appear that being contracted to the NHI Fund does not preclude private sector providers from servicing non-users, but it is unclear how that market will look or operate for them,” the experts said.

Bowmans partner David Gerhal compiled a legal perspective on ten key questions around the NHI, including the above, which can be read here.

Read: NHI comes back to bite Ramaphosa

Show comments
Subscribe to our daily newsletter