ACT
Act 131 of 1998, better known as the Medical Schemes Act, came into effect on 1 February, 1999. All South African Medical Schemes are legally obligated to adhere to the Act and comply with all regulations passed by the Government Gazette.
Acute Condition
An acute condition is a disabling condition, such as tonsillitis or appendicitis, which heals entirely after treatment.
Capitation
Capitation is a healthcare model that involves a managed care organisation paying a set amount of money to a group of healthcare providers. The fee-for-service healthcare model is the opposite of the capitation model.
Chronic Condition
A chronic condition is any condition which demands ongoing treatment, or treatment for a period of at least three months. Examples are asthma and diabetes.
Chronic Disease List (CDL)
The Chronic Disease List, or CDL, is an official list of 25 conditions and diseases that medical aid schemes may not exclude. In other words, medical schemes have to offer healthcare cover for these 25 conditions.
Chronic Medication
Chronic medication is the medicine that someone with a chronic condition (see definition) needs. A medical aid scheme has the right to limit its expenditure in terms of Prescribed Minimum Benefits (see definition) by controlling which medicines and treatment options are covered in terms of its schemes. Members might have to stick to a certain brand, or choose generic medicines, for example.
Claims Paying Ability
A medical aid scheme’s claims paying ability refers to how many claims it can cover in any given month. Claims paying ability is calculated in terms of the medical scheme’s cash and cash equivalent resources.
Co-payment
A co-payment is a certain percentage of the cost of a medical procedure for which the member is held liable.
Community Rating
By law, all the members of a particular medical aid scheme option have to pay equal monthly contributions. Community rating ensures that the sick and the elderly are not discriminated against.
Continuation Membership
In terms of continual membership, principal members of a closed medical aid scheme have the right to stay on with the scheme once they have retired even if their contributions are no longer paid by their previous employers. Furthermore, the dependants will remain covered in the event of the principal member’s death.
Contracted Out
If a doctor or a dentist is “contracted out”, he or she does not comply with the Council for Medical Schemes’ National Health Reference Price List (see definition).
Global Credit Rating (GCR)
Global Credit Rating is a company that determines and rates a medical aid scheme’s capacity to pay out claims, or a hospital’s capacity to pay for medical treatments and services.
Deductible
This is a fixed amount that a member must pay upfront for certain, pre-determined medical procedures.
Designated Service Provider (DSP)
A medical aid’s Designated Service Provider is a set group of preferred healthcare providers from whom members can obtain co-payment-free, unlimited diagnosis and treatment benefits in respect of the Prescribed Minimum Benefits (as set out in the Regulations to the Medical Schemes Act).
Dispensing Licenses
According to the Medicines and Related Substances Control Amendment Act, a medical aid scheme can only pay out medicinal claims if the medicine was dispensed by a medical practitioner with a dispensing licence.
DUR
Drug Utilisation Review, or DUR, is a way of establishing, monitoring and analysing the effectiveness of certain drugs in terms of successful drug therapy.
Exclusions
Exclusions are medical conditions which a medical aid scheme is legally permitted to exclude from its health insurance offering. Examples are self-inflicted injuries and cosmetic surgery.
ICD-10 Codes
By law, every claim that is submitted to a medical aid scheme must include an ICD-10 code. The ICD-10 code system is based on a medical diagnosis of a global categorisation of diseases, and it was developed by the World Health Organisation in order to standardise the diagnostic process.
Late Joiner Penalty
According to the Medical Schemes Act (see definition), South African medical aid schemes may impose a late joiner penalty for people older than 35 who want to join the scheme. In order to minimise risk, this penalty is calculated in terms of how long the person has not belonged to a registered medical aid scheme – the longer without medical aid, the higher the imposed penalty.
Medical Savings Account (MSA)
A medical savings account (MSA) is where a member’s own money is kept aside to pay for day-to-day medical expenses.
NAPPI Codes
National Pharmaceutical Pricing Index (NAPPI) codes are used to provide information about pharmaceutical and surgical products. This includes details about the manufacturer, registration, strength and dosage.
National Health Reference Price List (NHRPL)
The NHRPL is a national pricing system regulated by the Department of Health and the Council for Medical Schemes. Basically, the NHRPL stipulates the rates to which medical aid schemes must adhere in terms of benefit payments. However, medical service providers are not bound by this rate and some thus charge significantly higher rates. In such cases, members are liable for the difference between the provider’s rate and the NHRPL rate.
Pre-authorisation
Members of medical aid schemes are required to notify and obtain authorisation from their schemes before going into hospital if they are to receive non-life threatening or non-essential hospital treatment. This is known as pre-authorisation.
Pre-existing Condition
A pre-existing condition refers to a condition that a prospective member has been diagnosed with, and where treatment has been advised by a medical practitioner, within one year prior to his or her membership application.
Prescribed Minimum Benefits (PMBs)
By law, all medical aid schemes are obligated to provide medical cover for these conditions, as set out in the Regulations to the Medical Schemes Act.
Reference Price
The reference price is the highest amount that a medical aid scheme will pay for a type of medicine.
Roll-over Benefits
Roll-over benefits are unexploited medical savings that a medical aid scheme carries over from the previous year, so that a member may take advantage of those benefits in the current year.
Waiting Periods
Waiting periods are imposed when a new member joins a medical aid scheme. It could either be a 3-month period during which no claims will be processed, or a 12-month period if the applicant suffers from a pre-existing condition (note that the applicant will be covered for everything except his or her pre-existing condition during this period). |
