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HEALTH PORTFOLIO COMMITTEE
22 May 2001
NATIONAL HEALTH LABORATORY SERVICE AMENDMENT DRAFT BILL; NATIONAL COUNCIL OF MEDICAL SCHEMES AMENDMENT DRAFT BILL: BRIEFING
Chairperson: Dr S A Nkomo
Documents handed out:
Draft National Health Laboratory Service Amendment Bill (see Appendix)
Council for Medical Schemes presentation
The Ministry of Health gave a briefing on the draft National Health Laboratory Service Amendment Bill. The Bill facilitates restructuring regarding pension schemes for members of the National Health Laboratory Service.
The Council for Medical Schemes presented the draft National Council of Medical Schemes Amendment Bill to the Committee. The Bill seeks to address technical shortcomings in the Medical Schemes Act and also to fill gaps on policy issues. Much discussion entailed on how the Bill was to address problems faced by the ordinary person especially as service providers such as doctors and pharmacists often increase prices charged for services and goods to make up for the delays in payments from administrators of medical schemes.
The Committee was interested in time frames for the implementation of legislation.
National Health Laboratory Service Amendment Bill: draft
Mr V R Mabope headed the delegation from the Ministry. The National Health Laboratory Service Amendment Bill was submitted to the Committee in accordance with Rule 159 (1) of the Joint Rules of Parliament. The provisions of the Bill were read verbatim to the Committee.
The aim of the Bill is to amend the Schedule to the National Health Laboratory Service Amendment Act, 2001(Act No. 37 of 2001).The Bill provides for members of the Service who are members of a registered scheme in terms of a Pension Fund Act, 56 (Act No. 24 of 1956) to transfer to a pension scheme to be established by the Service. It further provides for members who are members of the Government Employees Pension Fund to have the options of becoming dormant members or to remain active members of such fund. However they have the further option of joining a scheme that is to be established by the Service.
For a detailed look at the Bill please refer to the attached document.
Mr M Ellis (DP) stated that assurances needed to be provided that the interests of those affected would be considered.
Mrs M Njobe added that stakeholders should be in agreement.
A representative of the Ministry stated that labour had been represented well in the process by trade unions. Consensus had been reached that the restructuring of the pension fund should take place.
The Chair asked when the Bill would be tabled. He also asked for how long would the Bill be published for public comment.
Mr Mabope stated that he would back to the Committee on when the Bill is to be tabled. The Bill would be available for public comment for a period of two weeks.
National Council of Medical Schemes Amendment Bill: draft
Mr Patrick Masobe, Chief Executive and Registrar and Mr Stephen Harrison, Head of Research and Monitoring at the Council for Medical Schemes presented. The aim of the Bill is to correct the deficiencies that exist in the Medical Schemes Act.
Mr Masobe stated that the Bill has two components to it:
-It attempts to correct where technical mistakes exist.
-The Bill also attempts to make policy changes where necessary.
Mr Harrison highlighted some of the technical changes that were required. In the Act reference is often made to ‘members’ when it was intended to include their dependants. A new definition of ‘beneficiary’ is included in the Bill to include both members and their dependents.
Previously, the Council lacked the locus standi to litigate in the interests of members. The Bill has expanded the powers of the Council to grant it the locus standi to litigate in the interests of its members. The powers of the Registrar have also been extended. The Registrar is now for example able to request more frequent submissions from schemes to monitor their stability and financial performance whereas in the past he was only able to do so once a year.
In the past major anomalies existed in dealing with complaints however the Bill now makes provision for more appropriate channels for complaint resolving. Provision is also made for the issuing of urgent temporary orders where failure to do so may result in irreparable prejudice to the complainant such as if a person needs an urgent operation.
The Act was silent on age as being one of the grounds on which a scheme should not unfairly discriminate. The Bill has corrected the omission.
The policy changes that were effected related to reinsurance, improper marketing practices, the independence of trustees, brokers, managed care and the late payment of accounts by administrators of medical schemes. Over the last three years R100m had been lost by members due to increases in reinsurance premiums. The Bill seeks address the imbalance.
The Act had been silent on the marketing of products by unregistered schemes, the Bill however clamps down on this. The independence of trustees in schemes to make decisions without the approval of their administrators is allowed in the Bill in order to encourage sound governance of schemes. Loopholes that previously existed on broker remuneration have been closed by attempts to properly regulate the remuneration and conduct of brokers in the Bill.
In the Bill provision has also been made for a regulatory framework to address the shortcomings in managed care. In the past providers had complained about the late payment of accounts by medical scheme administrators. The Bill now makes provision for penalties to be imposed on administrators for the late payment of accounts.
For a detailed look at the presentation please refer to the attached document.
Dr R Gous (NNP) asked if the provisions of the Bill are to apply retrospectively.
Mr Masobe stated that they have explored options of retrospectivity but it was eventually decided that most of the Bill would not be retrospective in application.
Mr M Ellis (DP) stated that it looks a long way off for the Bill to be tabled. He asked for a time frame within which the Bill is to be finalised.
Mr Masobe stated that the Bill has been published in the Government Gazette for public comment for a total period of 30 days. Thereafter it would be referred back to the Committee.
Dr E Jassat (ANC) asked if the Council should not approve brochures advertising products from medical schemes.
Mr Harrison stated that a provision to this effect have been included in the Bill.
Mrs M Malumise (ANC) asked why administrators of medical schemes pay service providers late.
Mr Harrison stated that it is a complex issue and that he had sent a report to the Minister on the issue. He offered to send to the Committee a copy of such report. One of the key problems is that billing procedures are not standardised. A Committee had been formed to help standardise billing procedures.
Mrs S Baloyi (ANC) stated that time frames are needed as the matters before the Committee are urgent. Why are medical aid schemes delaying payment to medical aid schemes. She wanted clarity on the powers of the Registrar to appoint auditors. What is being done to improve managed care?
Mr Masobe stated that the overall regulatory framework would definitely minimise late payments.
Mr Harrison stated that the Registrar not only has the power to appoint auditors but also to re-appoint them. Managed care is very complex and in South Africa it takes on a number of diverse forms. It must be given much more attention.
Dr B Mbulawa (ANC) stated that she totally supports the requirement that medical schemes should furnish more submissions to the Registrar. This was especially important given the fact that many of them are not above board.
She asked the following additional questions:
- What is going to be done to prevent members from taking advantage of the granting of urgent orders.
- What is actually being done about the vast amount of schemes that are sprouting everywhere? She stated that even clothing stores like Edgars offer funeral plans.
- How is the Council dealing with the problem of late payments by administrators of schemes to doctors? Many doctors have closed shop due to this phenomenon. It requires immediate action.
Mr Harrison stated that submissions would have to be made on a quarterly basis so that the Registrar can keep a check on schemes. There are safeguards to prevent people from taking advantage of the urgent orders. Criteria have been set to make sure that claims are legitimate. They are trying to deal with unregistered schemes but that new product offerings by registered schemes should be lodged with the Registrar.
Mr Masobe stated that it is unacceptable that doctors are closing shop. He added that attempts are being made to address the problem.
Ms S Baloyi asked what is the problem with reserves.
Mr Masobe stated that the reserve position of schemes is 20% at present. The Act requires it to be at 10%. There are two types of schemes. The first being employer-based schemes and the second, open schemes.
Mr Masobe explained that employer-based schemes are quite solvent as they have reserves between 50-60 percent. The open schemes are the ones that create problems, as they do not have high levels of reserves. However, the industry is quite sound and problems with reserves are being sorted out.
Ms C Dudley (ACDP) asked if the needs of contract workers had been addressed.
Mr Harrison stated that the issue revolves around affordability. It is sound to have medical aid coverage but not all people can afford it. He added that attempts are being made to try to extend the market to more people.
The Chair stated that there is still room for much discussion but that the Committee would continue discussions when the Bill is officially before them.
The meeting was adjourned.
REPUBLIC OF SOUTH AFRICA
NATIONAL HEALTH LABORATORY SERVICE AMENDMENT BILL, 2001
As introduced in the National Assembly
(MINISTER OF HEALTH) [B 2001]
GENERAL EXPLANATORY NOTE:
__________ Words underlined with a solid line indicate insertions in
To amend the National Health Laboratory Service Amendment Act, 2001, (Act No.37 of 2001), so as to provide for pension options to employees of bodies that are to be replaced by the National Health Laboratory Service.
BE IT ENACTED by the Parliament of the Republic of South Africa, as follows: -
Addition of item 8 to the Schedule to Act 37 of 2001
1. The following item is hereby added to the Schedule to Act 37 of 2001 after item 7.
8(1) An employee contemplated in item 2 who is a member of-
(a) a pension scheme registered in terms of the Pensions Fund Act. 1956 (Act No. 24 of 1965) must transfer to a pension scheme to be established by the Service and such a transfer is in terms of section 14 of Act 24 of 1956:
(b) the Government Employees Pension Fund may-
(i) become a dormant member of such Fund
(ii) remain an active member of such Fund; or become a member of a pension scheme to be established by the Service.
(2) For the purposes of the Income Tax Act. 1962 (Act NO.58 of 1962), no change of employer is deemed to have taken place when an employee's pension options change in terms of this item.
2. This Act is called the National Health Laboratory Service Amendment Act,
MEMORANDUM ON THE OBJECTS OF THE NATIONAL HEALTH LABORATORY
SERVICE AMENDMENT BILL, 2001
The Bill seeks to amend the Schedule to the National Health Laboratory Service Amendment Act, 2001 (Act No.37 of 2001) by the addition of a further item.
2. IMPORTANT PROVISIONS OF THE BILL
(a) The Bill provides for employees of the Service who are members of a pension scheme registered in terms of the Pension Fund Act, 1956 (Act No.24 of 1956), to transfer to a pension scheme to be established by the Service.
(1) The Bill further provides for the options to employees who are members of the Government Employees Pension Fund, to become dormant members of such Fund, remain active members of such Fund, or to become members of a pension scheme to be established by the Service.
All the relevant stakeholders were consulted.
4. PARLIAMENTARY PROCESS
The department of Health and the State Law Advisers are of the opinion that the procedure established by section 76 of the Constitution should be followed with regard to this Bill