Cimas says new medical tariffs not viable for medical aid societies

Cimas Medical Aid Society says its failure to settle health service providers' claims at the newly gazetted tariffs, in common with other medical aid societies, is a matter primarily of affordability.
It said the new tariffs could only be paid if members' contribution rates were put up. However, it did not believe members would be able to afford an increase in contributions.

It was responding to reports that the Ministry of Health and Child Care would refuse to renew the licences of medical aid societies that failed to pay service providers at the new maximum tariffs backdated to May 2014.

The Ministry of Health and Child Care in May this year increased the maximum tariff charges for doctors and other health service providers by up to 75 percent.

In a statement, Cimas said it would continue to engage the Ministry, as well as doctors and other service providers and stakeholders, in the hope that they would come to understand that it was not viable to insist that medical aid societies pay the new maximum tariffs.

 "Cimas has no intention of defying any regulations. The failure to settle claims at the gazetted maximum tariff charges is based purely on economic principles," Cimas said.

It said that, in common with other medical aid societies, Cimas found it difficult to understand how increases of up to 75 percent could be justified in a low inflation environment.

Medical aid societies had, through the Association of Healthcare Funders of Zimbabwe, sought to engage both the Ministry of Health and the Zimbabwe Medical Association to explain that medical aid societies could not afford to pay the new tariffs without increasing membership contributions, which members would find it difficult to afford.

"The only way in which Cimas could afford to pay the gazetted rates without increasing contributions would be if it dips into its reserves.

"Not only would the depletion of reserves in this way contravene government regulations but it could lead to the reserves being exhausted within less than three years," Cimas said.

Medical aid societies are legally required to maintain reserve funds that represent at least 25 percent of total contributions received.

Cimas said the Ministry of Health was seeking to pressurise medical aid societies into paying at the new tariff rates by threatening not to renew their licences, if they cannot demonstrate that they are paying service providers at the newly gazetted rates.

"Cimas is therefore faced with the alternatives of increasing membership contributions, which it believes would cause considerable financial hardship to the majority of its members, or risking have the ministry refuse to renew its licence, which expires at the end of March next year.

"Cimas believes the interests of its member are paramount. It has over the years gone into the provision of some medical services in order to ensure such services are affordable.

"Payments for services are made quickly, which is likely to no longer be the case, if the society faced the inevitable liquidity challenges that would result from paying the new tariffs without increasing contribution rates.

 "Cimas will continue to engage representatives of the doctors and hospitals, as well as the Ministry and other stakeholders, in the hope that they will come to understand that it is not viable to insist that medical aid societies pay the new tariffs," the statement said.