THE Supreme Court of Appeal has ruled that Genesis medical scheme must pay for Prescribed Minimum Benefits (PMBs) in full, regardless of what its own rules say.
PMBs are a basket of services that all schemes must provide to their members and include 270 medical conditions, 25 chronic conditions and emergency care.
The extent to which schemes are liable for PMBs costs is a fiercely contested issue in the medical schemes industry. It is the focus of a separate legal matter in which Genesis is asking the High Court in Cape Town to scrap regulation 8 of the Medical Schemes Act, which requires schemes to pay for the prescribed benefits in full.
Seen against this backdrop, the ruling handed down by Judge Eric Leach on Tuesday potentially has broader significance than the narrow fight between Genesis and a member of the scheme over payment for the treatment of a severely fractured leg. "One of the underlying purposes of the PMB provisions … is to ease the demand upon public resources … while at the same time ensuring that members of the medical scheme are able to obtain treatment at a satisfactory level … section 29 (1) (0) and regulation 8, which read together require a medical scheme to pay in full the costs of treatment of PMB conditions ... were clearly designed to ensure that members would not be obliged to bear the cost of providing such treatment," wrote Judge Leach.
The court ruling relates to a legal battle between Genesis and the Council for Medical Schemes (CMS) over Genesis’s refusal to pay for three external prostheses used to treat a member with a broken leg in the private sector. A broken limb is a PMB condition.
Genesis contended its rules excluded the provision of prostheses in a private hospital and only covered those fitted at state hospitals.
It argued that even if its rules were in contravention of the act and its regulations, they were binding on its members until the registrar of the council compelled it to amend its rules.
The court said the rules of a medical scheme could not be seen in isolation and Genesis could not contract out of the obligations set out in the act, which required it to pay in full for PMBs. It said the act provided Genesis with the opportunity to manage its liabilities for payments for PMBs by appointing designated service providers but it had failed to do so, and so it was obliged to pay for the member’s prostheses, even though they had been fitted in a private hospital.
"This is a very important victory for the Council for Medical Schemes as it confirms our interpretation of PMBs and protects beneficiaries against catastrophic health events in addition to preventing the overburdening of the public health sector," said its head of legal services, Craig Burton-Durham.
Genesis principal officer Brian Watson said the scheme would apply to the Constitutional Court for leave to appeal against the judgment. The judgment supported Genesis’s contention that regulation 8 of the Medical Schemes Act should be scrapped. "It clearly says regulation 8 … gives a blank cheque to the doctors and that is why we say it has to go."
Lobby group Section27 which has joined the Council for Medical Schemes in opposing Genesis’s High Court challenge to regulation 8 welcomed the judgment. "The court recognises PMBs are an important public health intervention and in the public interest," its attorney Umunyana Rugege said.
Picture: THINKSTOCK
THE Supreme Court of Appeal has ruled that Genesis medical scheme must pay for Prescribed Minimum Benefits (PMBs) in full, regardless of what its own rules say.
PMBs are a basket of services that all schemes must provide to their members and include 270 medical conditions, 25 chronic conditions and emergency care.
The extent to which schemes are liable for PMBs costs is a fiercely contested issue in the medical schemes industry. It is the focus of a separate legal matter in which Genesis is asking the High Court in Cape Town to scrap regulation 8 of the Medical Schemes Act, which requires schemes to pay for the prescribed benefits in full.
Seen against this backdrop, the ruling handed down by Judge Eric Leach on Tuesday potentially has broader significance than the narrow fight between Genesis and a member of the scheme over payment for the treatment of a severely fractured leg. "One of the underlying purposes of the PMB provisions … is to ease the demand upon public resources … while at the same time ensuring that members of the medical scheme are able to obtain treatment at a satisfactory level … section 29 (1) (0) and regulation 8, which read together require a medical scheme to pay in full the costs of treatment of PMB conditions ... were clearly designed to ensure that members would not be obliged to bear the cost of providing such treatment," wrote Judge Leach.
The court ruling relates to a legal battle between Genesis and the Council for Medical Schemes (CMS) over Genesis’s refusal to pay for three external prostheses used to treat a member with a broken leg in the private sector. A broken limb is a PMB condition.
Genesis contended its rules excluded the provision of prostheses in a private hospital and only covered those fitted at state hospitals.
It argued that even if its rules were in contravention of the act and its regulations, they were binding on its members until the registrar of the council compelled it to amend its rules.
The court said the rules of a medical scheme could not be seen in isolation and Genesis could not contract out of the obligations set out in the act, which required it to pay in full for PMBs. It said the act provided Genesis with the opportunity to manage its liabilities for payments for PMBs by appointing designated service providers but it had failed to do so, and so it was obliged to pay for the member’s prostheses, even though they had been fitted in a private hospital.
"This is a very important victory for the Council for Medical Schemes as it confirms our interpretation of PMBs and protects beneficiaries against catastrophic health events in addition to preventing the overburdening of the public health sector," said its head of legal services, Craig Burton-Durham.
Genesis principal officer Brian Watson said the scheme would apply to the Constitutional Court for leave to appeal against the judgment. The judgment supported Genesis’s contention that regulation 8 of the Medical Schemes Act should be scrapped. "It clearly says regulation 8 … gives a blank cheque to the doctors and that is why we say it has to go."
Lobby group Section27 which has joined the Council for Medical Schemes in opposing Genesis’s High Court challenge to regulation 8 welcomed the judgment. "The court recognises PMBs are an important public health intervention and in the public interest," its attorney Umunyana Rugege said.
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