Prescribed Minimum Benefit compliance and the protection of beneficiaries. Council for Medical Schemes PMB Compliance workshop 11 May 2010

Transcription

1 Prescribed Minimum Benefit compliance and the protection of beneficiaries Council for Medical Schemes PMB Compliance workshop 11 May

2 Contents Purpose of the day Context PMB review process Industry trends Complaints received by CMS Compliance concerns Impact of PMBs on medical schemes Areas of structural non-compliance 2

3 Purpose of the day Presentations by Professor Pick and Mr. Nkosi Presentations by stakeholders (position) CMS Providers Funders Discussion with other attendees: HPCSA, patient groups, manufacturers Establishment of a task team to develop a code of conduct and to assist with future changes to the PMB system (process) 3

4 CONTEXT PMB review process Industry trends 4

5 PMB review Process (2008) Two stakeholder workshops early in 2008 Three draft consultation documents Numerous comments on documents Thirteen clinical advisory committees Review of clinical advice, presentation to Council Review of appeal committee and appeal board rulings Draft regulations prepared, approved by Council and submitted to the Minister 5

6 Claims cost per beneficiary CDL and other conditions on categorical list Specified services Below-threshold benefits for specified services and conditions High cost events covered through PMBs (mostly in hospital) Above-threshold benefits for all PMBs Concurrent Processes impacting on revised PMB regulations Proposed Essential Care Package High Low Few Claims cost per beneficiary Day-to-day expenses on an out-ofpocket basis or paid from MSA Many Number of individuals involved Technical analysis of economic impact, affordability pricing, construct, related reforms Stakeholder comments Clinical Advisory committees Drafting of Regulations NHI Process

7 INDUSTRY TRENDS 7

8 Rands Medical scheme contribution costs have declined in real terms since ,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Medical scheme per capita expenditure at the same level in 2008 as in

9 Real non-healthcare expenditure in medical schemes has been in decline since 2005 pabpa (R) Impaired receivables Non-health per capita expenditure at same levels as in 2008 as in pabpa = per average beneficiary per annum Nett reinsurance Broker fees and distribution costs Managed care: management services Administration (Risk+Savings) 9

10 Industry solvency trends for all schemes are stable and being sustained at the levels achieved in 2004 Solvency ratio (%) Prescribed Solvency Level Industry Average All 10

11 Open scheme solvency levels are stable and above the statutory solvency levels, with the levels of 2004 constant to 2008 Solvency ratio (%) Prescribed Solvency Level Industry Average Open 11

12 Conclusions Scheme costs are contained Solvency levels are being maintained at healthy levels Non-health costs are contained 12

13 COMPLAINTS RECEIVED BY CMS 13

14 Increase in complaints over five years.. 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Unpaid accounts Denial of authorisation Benefit limitations Other 14

15 Some schemes may have policies in place to deliberately frustrate access to PMBs Schizophrenia Claims submitted timeously Scheme required a mental disorder form to be completed Refuse payment because of late submission of completed form Heart attack Authorisation granted for admission and treatment Scheme refused payment because the patient s PMB condition was not registered with the scheme 15

16 Some schemes impose monetary limits on PMBs... Kidney failure 74 year old on dialysis through 2009 Scheme informed member that dialysis and organ transplant is limited to R200,000 per annum from 2010 Disregard for National guidelines on dialysis 16

17 Some schemes arbitrarily deny benefits... Emergency treatment for a heart attack Patient arrived comatose at Hospital Emergency treatment performed, drug eluting stents inserted in coronary arteries Scheme refused to pay for the stents stating that there are no benefits for stents in his option, and that drug eluting stents are not cost effective No scheme protocol for the use of drug eluting stents No evidence provided that the drug eluting stents are not cost effective 17

18 Some providers may abuse the payment in full provisions of Regulation 8 Overcharging for a device Provider charged R3,450 for a device Nappi price is R222 18

19 Some schemes may abuse DSP provisions to deny benefits... Maternity Member enquired in advance and had her baby at a DSP hospital Scheme refused to pay the anesthetist because the particular anaesthetist on call on that day was not a preferred provider Procedurally unfair 19

20 Some PMB claims are paid from Medical savings accounts... Baby with cancer Diagnosis treatment and care paid from savings account Once funds were depleted, member paid out of pocket Scheme refused funding, arguing that the baby should have been registered on the oncology programme Member completed an appeal form with the scheme, with no response Claims settled after patient laid a complaint with the CMS 20

21 COMPLIANCE CONCERNS 21

22 Accreditation of administrators Administration systems not aligned with clients registered rules Scheme rates = cost (x) Paid from savings accounts; Co-payments settled by members ICD Coding complexities often result in incorrect processing of PMB related claims Poor coding quality (including z-codes) Some systems capture only one ICD10 code per claim line 22

23 Accreditation of administrators (cont) Full complexity of Regulation 8 requirements not reflected in system rules: Payment in full Voluntary use of a non-dsp Requirement to apply managed care: Authorisations, protocols, formularies No or little indication of interaction between schemes, administrators and providers to manage the adverse effect on members 23

24 IMPACT OF PROVIDER BEHAVIOUR ON MEDICAL SCHEMES IN RESPECT OF OVERCHARGING 24

25 Overall difference between charges for PMBs and non- PMBs is only 0.4% Total Pathology Urology Cardio Thoracic Surgery Surgery/Paediatric surgery Radiation Oncology/Nuclear Plastic and Reconstructive Surgery Paediatrics Otorhinolaryngology Orthopaedics Ophthalmology Neurosurgery Medical Oncology Psychiatry Neurology Spec.Phys/Int Obstetrics and Gynaecology General Medical Practice Anaesthetists Overall difference Non-PMB PMB Sample: 9,975 different service providers Total claim value: R609 million Index = total claim / RPL tariff x Source: large scheme sample Price index (Total claim / RPL tariff x 100)

26 Most medical practitioners charge at the RPL, irrespective of whether or not treatment is for a PMB Non-PMB 67.0% 26.3% 6.7% Large scheme sample PMB 70.3% 25.0% 4.7% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Percentage of total RPL Above RPL (100% - 300%) More than 300% of RPL In fact medical practitioners are less inclined to charge RPL for non-pmbs than for PMBs!

27 Most medical practitioners never charge more than the RPL Non-PMB 55.8% 22.1% 22.1% Large scheme sample PMB 48.7% 36.7% 14.6% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Percentage of total RPL Above RPL (100% - 300%) Over 300% of RPL

28 Most major medical is paid from the risk pool regardless of whether or not it s a PMB Radiation Oncology/Nuclear Medicine/Oncologist Up to 9% of PMBs are paid for out of savings accounts Total Pathology Urology Cardio Thoracic Surgery Surgery/Paediatric surgery Plastic and Reconstructive Surgery Paediatrics Otorhinolaryngology Orthopaedics Ophthalmology Neurosurgery Medical Oncology Psychiatry Neurology Spec.Phys/Int Obstetrics and Gynaecology General Medical Practice Anaesthetists Non-PMB PMB Source: large scheme sample Percentage paid from the risk pool

29 Conclusions No evidence of systematic abuse by providers of PMBs There is evidence of over-charging, but unrelated to PMBs Some schemes have accommodated this overcharging regardless of PMBs 29

30 CONCLUDING REMARKS 30

31 PMB Compliance There is no evidence that PMBs destabilise medical schemes In the absence of PMBs, members would never be certain what benefits they are covered for and schemes would compete to selectively reduce benefits There is evidence of over-charging, but not related to PMBs Resolving the problems associated with over-pricing and over-servicing require solution, but not through any diminution of PMBs Non-compliance with PMBs therefore represents an important conduct-related matter that requires resolution 31

32 Systemic non-compliance Inadequate enforcement leads to noncompliance resulting from competition between schemes PMBs defined as conditions make their prospective identification in the case of out-ofhospital claims difficult a situation that can be exploited by schemes Although there is no evidence of systematic gaming by providers, it is possible for them to abuse a PMB system 32

33 END 33