1. Briefing to the Health Portfolio Committee: Operational Activities and Budgets KP Matshidze Acting CEO and Registrar Council for Medical Schemes XX August 2009

2. Presentation Outline Introduction Legislative Mandate – Medical Schemes Act – Functions of Council – Vision of Council – Strategic Objectives Accountability Structures Composition of the Council Office Organogram Overview of Industry Operational activities for 2009/10

3. Legislative Mandate The Council for Medical Schemes was established in terms of the Medical Schemes Act, 131 of 1998, key policy objectives of which include to: Protect the interest of beneficiaries – Promote non-discriminatory access to privately funded health care through: – Open enrolment – Community rating – Guaranteed benefits – Promote financial stability and sustainability – Encourage active participation of members in scheme affairs – Entertain complaints from members

4. Other Legislative Provisions Constitution National Health Act Medicines and Related Substances Act Health Professions Act Pharmacy Act Nursing Act Competitions Act

5. Functions of Council Protect the interest of the beneficiaries at all times Control and coordinate the functioning of medical schemes in a manner that is complementary with national health policy Make recommendations to the Minister on the criteria for the measurement of quality and outcomes of the relevant health services provided for by medical schemes, and such other services as the Council may from time to time determine Investigate complaints and settle disputes in relation to the affairs of medical schemes provided for in this Act Collect and disseminate information about private healthcare Makes rules, not inconsistent with provisions of this Act for the purpose of the performance of its functions and the exercise of its powers Advise the Minister on any matter concerning medical schemes and Perform any other functions conferred on the Council by the Minister or by this Act

6. Our Vision To regulate fairly and effectively in order to protect the interests of beneficiaries, and to promote equity in access to medical schemes

7. Our 7 Strategic Aims  Secure an appropriate level of protection for beneficiaries of medical schemes and the public by authorizing the conduct of medical schemes business and monitoring the financial performance and soundness of schemes  Provide support and guidance to trustees and promote understanding of the medical schemes environment by trustees, beneficiaries and the public  Foster compliance with the Act by medical schemes, administrators and brokers and initiate enforcement action where required  Investigate and resolve complaints raised by beneficiaries and the public  Monitor the impact of the Act, research developments and recommend policy options to improve the regulatory environment  Foster the continued development of the CMS as an employer of choice  Develop strategic alliances nationally, regionally and internationally

8. CMS Accountability Structures MINISTER OF HEALTH Dr Aaron Motsoaledi COUNCIL 12 Members ACTING CEO & REGISTRAR Khathutshelo Patrick Matshidze

9. Composition of the Council Consists of Chairperson, Deputy Chairperson and 10 members, appointed by the Minister of Health Chairperson – Prof William Pick Deputy Chairperson – Ms Tracy Fortune The Council comprises a broad spectrum of highly skilled senior people which include the representative from the National Department of Health, actuaries, lawyers, medical specialists, consumer representatives and general practitioners

10. Committees of Council Council comprises of the following committees: – EXCO – Council The following specialist sub-committees have been established to aid Council in the fulfillment of its complex mandate: Appeals Human Resources Audit

11. REF PROJECT ACCREDITATION BENEFITS MANAGEMENT IT & KM HUMAN RESOURCES RESEARCH AND MONITORING COMPLIANCE AND EDUCATION & TRAINING FINANCIAL SUPERVISION LEGAL SERIVCES REGISTRAR’S OFFICE ACTING CEO & REGISTRAR COMMUNICATION PERSONAL ASSISTANT COMPLAINTS ADJUDICATION MANAGER INTERNAL FINANCE

12. Overview of the Industry (as at end 2008) 110 not-for-profit registered medical schemes – Open: 37 – Restricted: 82 Numerous for-profit intermediaries – Administrators - 23 – Brokers – 7755 – Brokerage companies - 2081 – Managed care companies – 55 7.8. million covered lives Annual gross contribution income: R74.0 billion Annual gross claims incurred: R64.7 billion

13. Total benefits paid in real terms ( 2008 prices)

14. Solvency ratio

15. Type of Complaints Type of complaintPeriod 2007-08% of total2008-09% of total Unpaid accounts1 06636.91 16637.2 Scheme refuses to issue authorisation2318.032010.2 Limitation of benefits / PMBs / formularies / DSPs35912.42919.3 Reversal and short-payment of accounts1023.52257.2 Non-payment of refund1384.81936.2 Administrative inefficiencies1896.51705.4 Termination of membership1615.61635.2 Misunderstanding with scheme2047.11324.2 Exclusion of a condition and/or benefits1314.5983.1 Unauthorised deductions722.5672.1

16. Operational Activities: 2009/10 1.Review and approval of contributions and benefits 2.Accreditation of administrators, brokers and managed care organisations 3.Assessment of trends on coverage of non PMB conditions 4.Monitoring of ICD 10 implementation 5.Ensure finalisation of the PMB Review process 6.Ensure finalisation of Risk Equalization Fund process 7.Training and education of trustees and consumers 8.Ensure compliance with provisions of legislation 9.Investigation and resolution of complaints 10.Monitor the financial soundness of schemes 11.Institutional strengthening of CMS – IT and KM – HR – Internal Finance

17. Thank You