NHI Act – long road ahead of litigation likely

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Cohen Grootboom | Senior Associate | Commercial Litigation & Dispute Resolution | Adams & Adams | mail me |


 

 

 

 

 

 

 

 


Mthokozisi Maphumulo | Senior Associate | Insurance law & Financial Sector Laws | Adams and Adams | mail me |


President Ramaphosa has promulgated the National Health Insurance (NHI) Act. The NHI, in its bill form, has been controversial since its introduction and has attracted significant critique from various stakeholders. It is therefore likely that the act will be the subject of fierce litigation, sooner or later.

Some of the institutions/groups which have intimated that they may challenge the constitutionality of the act including the Trade Union Solidarity, Health Funders Association, Democratic Alliance, the South African Medical Association, the South African Health Professionals Collaboration, the Board of Healthcare Funders, and the Business Unity SA.

There are various grounds on which the constitutionality of the act could potentially be challenged, including the following:

  • the consultation process leading up to the promulgation of the act – many stakeholders have raised their dissatisfaction with how the process unfolded. Many believe that the consultation process relating to this act was a mere tick box exercise, with no serious intention to properly consider the comments of the public and the relevant stakeholders.
  • the act imposing a significant restriction on the medical schemes in that, in terms of the act, they are only permitted to offer complementary services. They are not permitted to offer any medical services that are provided by the fund. This restriction potentially violates the medical schemes’ freedom of trade, their right to avail and provide access to healthcare services.
  • the act potentially violates the freedom of association, as it forces people to register as NHI users. Additionally, it may be argued that the act infringes on the peoples’ right to access healthcare services.

Various other issues, which fall outside the scope of this article, have been raised around the legalities of the act. The following are the primary take aways from the act.

Purpose

The act is aimed at achieving universal access to quality healthcare in accordance with the constitution. It establishes a National Health Insurance Fund (the fund), detailing its powers, functions, and governance.

The act creates a framework for the fund to purchase healthcare services for users, ensuring equitable, effective, and efficient resource utilisation to meet the population’s health needs. Additionally, it aims to prevent or minimize undesirable, unethical, and unlawful practices related to the fund and its users, and addresses connected matters.

The act sets the following goals:

  • The provision of sustainable and affordable universal access to quality healthcare by serving as the sole purchaser and payer of healthcare services.
  • Ensuring fair distribution and use of services.
  • Maintaining funding sustainability.
  • Promoting equity and efficiency through pooling funds and strategic purchasing from accredited providers.

Application

This act applies to all health establishments except for military health services and establishments. It does not apply to members of the National Defence Force or the State Security Agency.

In case of conflict with other laws, the act notes that it will have precedence, except for the constitution and the Public Finance Management Act or any act explicitly amending it. The act, however, does not change the funding and functions of state organs in healthcare (until relevant legislation is enacted). The Competition Act also does not apply to transactions under the act.

Population coverage

The fund, in consultation with the Minister of Health, is tasked with purchasing healthcare services for South African citizens, permanent residents, refugees, inmates, and certain foreigners.

Asylum seekers and illegal foreigners are entitled only to emergency and notifiable public health concern services.

All children, including those of asylum seekers or illegal migrants, have the right to basic healthcare services as per the constitution. Those seeking healthcare services must be registered with the fund and present proof of registration. Foreigners visiting must have travel insurance; if not, they have rights to certain healthcare services.

Registration as users

Individuals eligible for healthcare services must register as users with the fund at accredited healthcare providers or establishments. Parents must register their children.

Children born to users are automatically registered. Those between 12 and 18 years old may apply for registration. In child-headed households, a supervising adult or healthcare provider employee must assist with registration. During registration, biometric data, and other prescribed information, including identity documents, birth certificates, or refugee identity cards, must be provided.

Further requirements for foreign nationals’ registration may be prescribed by the minister. Unaccredited establishments listed by the minister must maintain user registers. Users accessing services purchased by the fund must provide proof of registration.

Rights of users

Registered users enjoy various entitlements, including:

  • Receiving necessary quality healthcare services for free from accredited providers upon presenting proof of registration.
  • Accessing information about the Fund and available healthcare benefits.
  • Accessing personal health information kept by the fund, as per the Promotion of Access to Information Act.
  • Not being denied healthcare services on unreasonable grounds or unfairly discriminated against.
  • Accessing healthcare services within a reasonable time period and being treated with a professional standard of care.
  • Making reasonable decisions about their healthcare and lodging complaints regarding access, quality, or fraud.
  • Requesting written reasons for fund decisions and lodging appeals against them.
  • Instituting proceedings for judicial review of Appeal Tribunal decisions.
  • Protection of their privacy and confidentiality of personal information as per the Protection of Personal Information Act, with some exceptions.
  • Accessing information on healthcare funding in the country.
  • Purchasing healthcare services not covered by the fund through private insurance schemes or out-of-pocket payments.

Health care services coverage

The act also outlines the procedures and guidelines for the purchase and delivery of healthcare services by the fund as follows:

  • The fund, in consultation with the minister, must purchase healthcare services for users as determined by the Benefits Advisory Committee.
  • Users must receive entitled healthcare services from registered providers, with provisions for portability if necessary. If a provider cannot deliver services, the user must be transferred appropriately.
  • Users must initially access services at the primary healthcare level and adhere to referral pathways. Failure to follow these pathways may result in loss of entitlement to fund-purchased services.
  • The fund must contract with accredited providers based on user needs and referral pathways.
  • Central hospitals must be designated as national government components with semi-autonomous management structures.
  • Portability of healthcare services allows users to access care from other accredited providers if needed.
  • Treatment may not be funded if no medical necessity, cost-effective intervention, or inclusion in the formulary exists, unless approved by the minister.
  • If the fund refuses funding, the user must be notified, given a chance to respond, and provided with reasons. Appeals can be lodged if dissatisfied.

Cost coverage

Users of the fund are entitled to receive healthcare services purchased on their behalf for free from accredited providers, except in the following circumstances:

  • Where they are not entitled to fund-purchased services.
  • Where they fail to comply with referral pathways.
  • Where they seek services deemed medically unnecessary by the Benefits Advisory Committee.
  • Where they seek treatment not included in the formulary.

Accreditation of service providers

This act further outlines the requirements for accreditation of healthcare service providers by the fund and the procedures for contracting and monitoring their services as follows:

  • Accredited providers must deliver appropriate healthcare services to entitled users.
  • To be accredited, providers must meet certification and registration standards, comply with performance criteria, provide required services, allocate appropriate staff, adhere to treatment protocols and referral pathways, submit necessary information, and follow pricing regulations.
  • Contracts with accredited providers must detail performance expectations and access to services.
  • Providers must submit patient information for reimbursement and monitoring.
  • Performance is monitored, sanctions applied for non-compliance, and accreditation renewed every five years.
  • Accreditation may be withdrawn or refused renewal for various reasons, including failure to deliver services, comply with regulations, or meet contractual obligations.
  • Providers have the right to appeal decisions regarding accreditation.
  • The fund may issue directives on listing and publication of accredited providers.

Complaints & appeals

Moreover, the act provides for procedures for lodging complaints and appeals.

Complaints:

  • Affected parties (users, healthcare providers, establishments, or suppliers) can submit complaints to the Fund following its determined procedures.
  • The Investigating Unit, established by the Chief Executive Officer, investigates reported incidents and makes recommendations within 30 days.
  • The complainant is notified in writing of the investigation outcome and any fund decision within a reasonable timeframe.
  • If the fund makes a decision, it must notify the healthcare service provider, provide an opportunity for representations, and give adequate reasons for the decision regarding accreditation withdrawal or refusal.

Appeals:

  • Aggrieved parties can appeal fund decisions within 60 days to the Appeal Tribunal.
  • The Appeal Tribunal consists of five members appointed by the minister, with expertise in law, medicine, and finance.
  • The tribunal has powers similar to a High Court, including summoning witnesses, administering oaths, examining witnesses, and calling for documents.
  • After hearing the appeal, the tribunal can confirm, set aside, vary, or order the Fund’s decision to be effected.

Offences & penalties

Any person who knowingly submits false information, makes false representations, misuses funds, obtains money under false pretences, or discloses Fund information without consent is guilty of an offence. Upon conviction, they may face a fine not exceeding R100,000, imprisonment up to five years, or both.

Failure to provide required information to the fund within a specified period incurs a prescribed fine for each day of non-compliance, unless waived for good cause. Any penalties imposed constitute a debt owed to the fund.

Our dispute resolution teams are well placed to advise, and assist affected and/or interested parties in pursuing legal action in relation to the NHI Act.


 



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