The Supreme Court of Appeal (SCA) has dismissed an application by the Council for Medical Schemes (CMS) to reconsider its earlier decision to dismiss the regulator’s appeal against a High Court directive to provide the Board of Healthcare Funders (BHF) with documents on low-cost benefit options (LCBOs).
The litigation over the documents is ancillary to the BHF’s main case against the CMS over LCBOs.
The BHF, which represents most of the country’s medical schemes, took the CMS, the Registrar of Medical Schemes, and the Minister of Health to court in 2022, seeking to overturn what it calls a moratorium preventing medical schemes from providing LCBOs, pending the finalisation of LCBO regulations. It also sought the documentation relating to the CMS’s decisions about LCBOs.
Read: BHF takes legal action against the CMS to compel it to review the LCBO guidelines
LCBOs are cheap, pared-down benefit packages that do not provide all the benefits required by the Medical Schemes Act – particularly the Prescribed Minimum Benefits (PMBs).
Since the BHF filed its main application, it has brought further applications concerning the record relating to the LCBO decisions, because it believes it has not been provided with the complete record.
In a judgment delivered on 10 July 2023, the High Court gave the CMS and the Minister of Health until 24 July to produce all the documents listed by the BHF.
Two days later, when the requested documents were not handed over, the BHF filed an urgent contempt-of-court application against both parties. The application was dismissed because “a case had not been made to justify the urgency of the application”.
The CMS appealed the High Court’s decision to the SCA, which dismissed the application in December 2023, saying it had no reasonable prospect of success. The CMS applied to the SCA to review that decision.
Read: CMS seeks reconsideration after court dismisses appeal on LCBO documents
On 22 May, the SCA dismissed the CMS’s application with costs. In a one-page order, the SCA said the applicants had not established any exceptional circumstances that warranted the reconsideration or variation of its previous decision.
Charlton Murove, the BHF’s head of research, told Moonstone the organisation is seeking some 35 outstanding documents. The CMS initially provided the BHF with a 500-page record and then a further 250 pages.
He said these documents largely contained information that was already in the public domain. Based on citations and references in the documents provided, the BHF established that 35 documents exist that are relevant to its main application – particularly the minutes of CMS meetings relating to LCBOs.
Any movement on the LCBO regulations?
In March, the CMS extended the exemption that allows companies to sell insurance policies that cover primary healthcare services provided by private practitioners. The exemption was first introduced in April 2017, supposedly as a stop-gap measure pending the finalisation of a legal framework that will enable medical schemes to offer LCBOs.
Read: Primary health insurance policies can be sold for another year
In November 2023, the CMS announced it had handed over to the Minister of Health a report containing recommendations on LCBOs. The report has not been made public.
The latest extension of the exemption is for one year, whereas on previous occasions it was usually extended for two years.
Does the one-year extension, coupled with the hand-over of the report, indicate that a breakthrough on the LCBO guidelines is imminent.
Murove said it would be unwise to “read too much” into the shorter extension period.
It is common practice for a regulator to “sign-post” to the industry that a regulatory change is looming. But there have been no indications from the CMS that the industry should prepare for changes when it comes to LCBOs, Murove said.
That the LCBO report has not been released was a further indication that “a positive outcome” regarding LCBO cannot be expected soon, he said.
Regulations are necessary despite NHI Act
The BHF has long maintained that the CMS has deliberately delayed the finalisation of the LCBO guidelines to make National Health Insurance (NHI) more attractive to the public.
Does the signing into law of the NHI Act mean it is no longer important for the BHF to win the battle over the LCBO guidelines?
Murove said the NHI Act in no way reduces the importance of LCBOs.
He does not believe there will be meaningful progress in implementing NHI for the next five years. The BHF has filed court papers challenging the NHI Act, and other organisations will be doing likewise. The BHF could not put LCBOs on hold while waiting for the legal issues surrounding the Act to be resolved.
The government’s view is that NHI will provide the population with affordable healthcare, but NHI is many years away. In the meantime, Murove said, the government should be making it easier for consumers to buy affordable benefits for day-to-day healthcare – via LCBOs.
As a result of the exemption, consumers can buy primary health insurance products, but they cannot buy similar products from medical schemes. Murove said there should be no basis for preventing schemes from selling these products before a transition to NHI.
From the BHF’s perspective, the inability of consumers to buy primary healthcare products from medical schemes is prejudicial to their interests. Insurance products come with underwriting, and policyholders cannot claim the medical tax credits that are available to scheme members.
Murove said the moratorium on LCBOs is compromising schemes’ risk pools. Young and healthy consumers who believe they do not need the PMBs are buying health insurance products, leaving schemes with a growing pool of older and less-healthy members.
