Health Cake Cost

Understanding how Medical Aid Tariffs are calculated can be extremely difficult and down right confusing at the best of times, especially if one is not familiar with Medical Aid jargon and acronyms.

In this post we examine the different rates that Medical Schemes and Service Providers charge. It is critical that you understand the differences in rates, as you could land up paying a sizable amount out of your own pocket.

Arm Yourself With The Correct Information

There have always been two tariff structures in South Africa according to which medical treatments were determined

The first Tariff structure is what is commonly called National Health Reference Price List – NHRPL Tariff. This was implemented in January 2004.

The National Health Reference Price List (NHRPL Tariff) can be explained as the previous Scale of Benefit Tariff , the Medical Aid Rate or the Medical Scheme Rate . This has historically been the rate of reimbursement that Medical Schemes use to pay service providers such as doctors, dentists and hospitals.

Then in July 2010 the National Health Reference Price List (NHPRL Tariff) was declared null and void by the Gauteng High Court as it was found to be flawed.

With no real Tariff structure in place since July 2010, it paved the way for Medical Schemes to develop their own Scheme Rates, which are usually based on the previous National Health Reference Price List Tariff adjusted for inflation year-on-year.

The second Tariff structure is that of the South African Medical Association (SAMA) which represents doctors in private practice.

The South African Medical Association (SAMA) publishes an annual rates guide of what it thinks its members should be paid for their services. These rates are generally much higher than the Medical Scheme Rate.

The reality is that the number of specialists who practice in South Africa has declined rapidly in recent years, while the demand for their services has increased.

In addition, practitioners in high demand may charge rates that are even higher than 300% -frequently 400% but even up to 600% of the Medical Scheme Rate.

To minimise the Tariff Gap in cover a number of Medical Scheme’s have entered into direct payment arrangements with specialists. These contracts typically involve a direct payment to specialists who agree to charge a specific rate. Specialists are willing to accept these rates of reimbursement to avoid problems of collecting on bills and bad debts.

However, not all Medical Schemes have introduced direct payment arrangements and not all specialists have bought into these arrangements. As a result, you may well find consultations with, and procedures performed by, specialists whose fees are not covered by your scheme give rise to a gap in your cover.

As a result, there is a wide range of rates at which medical schemes reimburse doctors, so there is a higher probability of a difference between what your scheme pays and what your doctor charges. This makes it more difficult for you the consumer to know if your scheme’s rate will cover what the practitioner charges.

The shortfall between what your specialist charges (the private rate) and what your medical scheme refunds you (the medical scheme rate) is known as the tariff shortfall.

How Does This Impact On Medical Scheme Members?

Medical Scheme members are often faced with the uncertainty of whether the full cost of a consultation will be covered by the medical scheme. This uncertainty arises out of the difference between what health care providers charge and what the medical scheme pays. This difference is what the member funds out of his/her pocket.

Regrettably this leaves the medical aid member in the middle-often having to pay cash upfront or paying from their own pockets to settle the difference between the health care provider’s claim and what the medical scheme pays out.

One of the biggest areas of impact is In-Hospital consultations and procedures. These are generally more costly than Out-of-Hospital events and medical scheme members are often faced with substantial out of pocket payments for In-Hospital related accounts.

Now more than ever, one realises that the Medical Schemes business is a complex one and there are many “loopholes” consumers need to be aware of. Ask questions, do your research and ensure that you understand the differences.

Tips To Help You Minimise The Impact Of Being Out-Of Pocket!

  • Check with your Medical Scheme to see if there are any providers of service in and around your area that are on direct payment arrangements – as this will save you a small fortune.
  • Keep in mind we have rights too. Negotiate rates with specialists beforehand, especially before you are admitted for a surgical procedure.
  • Speak your mind, if your specialist is not willing to negotiate, either pay the difference or find someone else.
  • If you do not have Gap Cover in place, investigate it now as this will save you a tidy sum when admitted to Hospital for an illness or accident and protect you against nasty surprises when you receive the specialists bills.
  • Choose your Medical Aid option wisely as it is imperative that you understand exactly what your Medical Aid Scheme will contribute towards your treatment. If you are unsure, speak to Specialist Healthcare Advisor.