1) A supplier of a service who has performed any service to a person with regards to which an account has actually been provided, shall, in spite of the conditions of any other law, supply to the user involved an account or statement reflecting such particulars as may be prescribed; 2) A medical plan shall, in the case where an account may be provided, subject to the conventions of this Act along with rules of the medical scheme concerned, pay to a member or supplier of service, any kind of reward due to that member or provider of service within thirty days following the day upon which the claim in regard of such reward was attained via the medical scheme".
The question takes place whether this section merely permits medical schemes to pay service providers directly or whether it in reality create a duty on medical schemes to make repayments directly to service providers, as has been argued by companies.
The Top Court of Appeal, in Medscheme Holdings (Pty) Ltd and the other v Bhamjee [2005] ALL SA 16 (SCA), found that Mr Bhamjee, a medical practitioner, had no grounds upon which to insist that Medscheme (an authorized medical scheme) pay him right away.
On this judgement, the Court appeared to recognize that although section 59(2) produces a foundation upon which medical schemes may discharge responsibilities payable to customers by reimbursing service providers directly, the section does not force a medical scheme to take action where the provider had lodged an account with the medical scheme.
This view was affirmed in the recently resolved and reportable matter of Tshwane Pharmacy (Pty) Ltd v GEMS that was observed by the North Gauteng High Court under case number 28532/11.
In this particular matter the Applicant (a service provider) applied to Court on an critical grounds for an order directing that the Respondent (a registered medical scheme) make payment directly to them, and never to their associates.
The Applicant contended the key phrase in section 59(2) of the Act is "benefit due to the member or provider of the service" which with a common sense decryption of the area it means that when a customer has not yet paid the service provider of the service the medical scheme has no discernment but is obliged to repay the provider.
The Court failed to agree with this disagreement, and held that section 59(2) has to be construed in context. Subsection (1) provides that the provider of a service that has rendered a service is obligated to provide the member concerned with an account that contains prescribed information. Subsection (2) then provides any time this account is rendered the medical scheme may pay to the member or even the provider of the service the benefit owing to that member or supplier of the service.
The Court also maintained that, in the context of the section, the bonus yet to be paid must refer to the total amount owed by the member to the provider for the services rendered. The Court stated that it is irrelevant that the bonus will become due to the member by virtue of the understanding between the member and the medical scheme and, towards the provider, by virtue of the commitment involving the member and the provider. The subsection does not build an obligation on the medical scheme to pay the service provider.
Furthermore, the Court held that the subsection undoubtedly provides that payment is susceptible to the principles of the medical scheme, and in the case of the Respondent its rules claimed unambiguously the fact that the Respondent has the right to pay back either the customer or the supplier of the service.
Consequently, the Court identified no basis for a duty on the Respondent to repay the Applicant directly and laid off the application along with charges.
From the above it is crystal clear that to guarantee repayment for services rendered by service providers must either claim repayment directly from their patients, or ensure that they have got contractual agreements with all the medical schemes. For the time being, our Courts seem to be unwilling to demand a statutory responsibility on medical schemes to make payment straight to companies without this type of contractual agreement.
The question takes place whether this section merely permits medical schemes to pay service providers directly or whether it in reality create a duty on medical schemes to make repayments directly to service providers, as has been argued by companies.
The Top Court of Appeal, in Medscheme Holdings (Pty) Ltd and the other v Bhamjee [2005] ALL SA 16 (SCA), found that Mr Bhamjee, a medical practitioner, had no grounds upon which to insist that Medscheme (an authorized medical scheme) pay him right away.
On this judgement, the Court appeared to recognize that although section 59(2) produces a foundation upon which medical schemes may discharge responsibilities payable to customers by reimbursing service providers directly, the section does not force a medical scheme to take action where the provider had lodged an account with the medical scheme.
This view was affirmed in the recently resolved and reportable matter of Tshwane Pharmacy (Pty) Ltd v GEMS that was observed by the North Gauteng High Court under case number 28532/11.
In this particular matter the Applicant (a service provider) applied to Court on an critical grounds for an order directing that the Respondent (a registered medical scheme) make payment directly to them, and never to their associates.
The Applicant contended the key phrase in section 59(2) of the Act is "benefit due to the member or provider of the service" which with a common sense decryption of the area it means that when a customer has not yet paid the service provider of the service the medical scheme has no discernment but is obliged to repay the provider.
The Court failed to agree with this disagreement, and held that section 59(2) has to be construed in context. Subsection (1) provides that the provider of a service that has rendered a service is obligated to provide the member concerned with an account that contains prescribed information. Subsection (2) then provides any time this account is rendered the medical scheme may pay to the member or even the provider of the service the benefit owing to that member or supplier of the service.
The Court also maintained that, in the context of the section, the bonus yet to be paid must refer to the total amount owed by the member to the provider for the services rendered. The Court stated that it is irrelevant that the bonus will become due to the member by virtue of the understanding between the member and the medical scheme and, towards the provider, by virtue of the commitment involving the member and the provider. The subsection does not build an obligation on the medical scheme to pay the service provider.
Furthermore, the Court held that the subsection undoubtedly provides that payment is susceptible to the principles of the medical scheme, and in the case of the Respondent its rules claimed unambiguously the fact that the Respondent has the right to pay back either the customer or the supplier of the service.
Consequently, the Court identified no basis for a duty on the Respondent to repay the Applicant directly and laid off the application along with charges.
From the above it is crystal clear that to guarantee repayment for services rendered by service providers must either claim repayment directly from their patients, or ensure that they have got contractual agreements with all the medical schemes. For the time being, our Courts seem to be unwilling to demand a statutory responsibility on medical schemes to make payment straight to companies without this type of contractual agreement.
About the Author:
Learn about medical law and the medical schemes act from the best in the industry. Dirk Markhen is a specialist medical attorney practicing in the law of medicine.
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