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08 06 24 RETAP Minutes


08 06 24 RETAP Minutes

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Completed Actions items from previous meeting:
Item Reports on schemes that would be particularly affected by the bulk (3 months) supply of medication Impact of Maternity data on Financial and Data flows Adjustments to data submitted in the previous quarter Publish a document that explains the methodology supporting REFCT2008 and expected count tables Person Liz Els, Wesmé Hartman Boshoff Steenekamp Boshoff Steenekamp REF Unit STATUS Complete COMMENT Medikredit to has presented findings at last RETAP meeting, DOT methodology to be accepted. Incorporated in data and cash flows document Incorporated in data and cash flows document Document published

Complete Complete Complete

Previously identified work in progress
Item Pricing study for 2008 will have expanded goals, and must include the required data items that are required to estimate the impact of PMB’s in the BBP configuration, quantify existing cross subsidies between high and low risk options, and measure the impact of the reform on the industry. Person Boshoff STATUS Work in progress COMMENT The process to review the PMBs was launched by the CMS during 2008

New action items identified in this meeting
Item Publish 2007 REF submissions report and individual scheme feedback on CMS website Continuous work on scheme-specific expected values Review E&V for 2009 Inflation adjustments to REF weighting tables Person REF Unit STATUS In progress COMMENT

Medscheme, Discovery, REF Unit REF Unit REF Unit to initiate, RETAP actuaries to participate

In progress

In progress In progress


Approval of minutes of meeting held on 4 December 2007.

Minutes adopted without changes.

(A) Matters arising from the minutes not included in the agenda

(B) Finalisation of the agenda
No additions to the agenda

2 2.1

Technical matters Documents to note
• • • V 3.2 of the E&V criteria published Policy document on adjustment for inflation published Discussion document on PMB review o Boshoff reported that the PMB Review workshop discussion and public comments on PMB review process are being review to develop a position statement on PMB review. The position statement document will be ready before the end of July. o Brian Ruff requested clarity on the PMB review and the Medical Schemes Amendment Bill process as there seemed to be overlaps. The legislative process is likely to influence the final set of benefits in the BBP. A concern was also raised about the inclusion of hospitalisation in the PMB package and the clarity of legislation with regards to this. Boshoff Steenekamp indicated that this was under discussion.


Presentation on 2007 REF submissions

Boshoff Steenekamp presented the preliminary results of the evaluation of the 2007 REF submissions. Discussion and feedback on the presentation included the following. • REF Data submission evaluation Data evaluation was done and completed for the 2007 reporting period. REF returns appear to have correct age profile data than the Statutory Returns submissions An increase in the proportion of problematic data was noted. This might be due to better analytic techniques adopted by the REF office, which may include increased vigilance, changes in definitions, use of scheme specific rates, clustering and changes in techniques. • Categorisation of submissions Changes were made to the categorisation definitions to deal with problems that were not apparent when these categories were developed. • High level impact It was noted that the industry community rate is more stable in 2007 when compared to 2005 and 2006. A small variation in price by age was noted between actual REF submissions and expected profile, for the total industry and major administrators. Differences were noted in older age bands. The reporting of CDL conditions is now consistent and more reliable when compared to 2006. A stepwise phenomenon from quarters to quarter which was noticed in the reported CDLs in 2005 happens only in a small scale. The financial impact of reporting below or above expected levels was discussed

Marked improvement was noted in data submitted by large administrators. Small administrators and some self administered scheme are still struggling to submit credible data In conclusion, it was noted that it is important that better data evaluation techniques must be developed. Concerns were raised with the validity of the 2005 Study data • Way forward Feedback will be in the form of a report to the industry; Scheme specific reports will be published on the website Work needs to be done on how to achieve compliance for about 20% of schemes that continue to submit problematic data. • Comments The meeting wanted to know what is the impact of using the Age only or the full (including CDLs) contribution table. This question was raised as a result of the realisation that there has been a marked improvement in the age data and less in the CDL data. What is the impact of bad data on ICR? What is the acceptable level of bad data? Should there be a gradual addition of risk factors when REF goes live?


Days of therapy (DOT) as alternative to the two-out-of-three months rule in establishing compliance.

Pieter Vermeulen presented work done by Medikredit and Platinum Health on problems associated with bulk dispensing. It was noted that this results in the artificial low CDL rates for schemes that employ this strategy. Schemes that use “bulk dispensing” strategy a mostly mining based schemes. The impact of bulk dispensing is small in other schemes. Discussion and feedback on the presentation included the following.

Use of DOT in the E&V will help schemes that use the “bulk dispensing” strategy to improve their numbers There might be a problem with inconsistent use of DOT Use of DOT might give schemes an opportunity for gaming In conclusion, it was agreed that the DOT method is acceptable, as long as the following criteria are met: 1. Schemes must be registered by the CMS before the DOT methodology is applied 2. The following must apply a) Days of therapy must be clinically based b) DOTs must be verified against standard DOTs such as those provided by First Data bank 3. The revision of the Entry and Verification criteria for the DOT method will consider a) Count down DOT to the nearest 30 b) 3 months cap must be applied


Update on risk factors that effect scheme specific expected values

In the last RETAP Scheme Data Evaluation Task Team, Discovery and Metropolitan volunteered to some research work to identify factors that are likely to predict chronic disease prevalence using their data sets. Emile Stipp indicated that the work is at an advanced stage and that a report will be circulated in due course.


Discussion document on Data and Cash flows

Boshoff Steenekamp led a discussion on the Data and Cash flows document. He reported that the document will inform the development of regulations. The following issues were raised: The separation of beneficiary and CDL data in the registry (to promote confidentiality) could have negative consequences in as far as the use

of data for research and for tracking beneficiary movement is concerned. Emile Stipp and Pieter Gobler indicated that there might be a problem with some of the required data fields. A concern was raised about the likely financial impact that the first REF transfer will have on schemes Boshoff Steenekamp was asked to set up a meeting between the IT technical teams from the industry and the REF IT development team so that everyone can have a better understanding on how data and cash flows will impact on their systems. Boshoff Steenekamp reported that the REF It systems will be audited by the Auditor General before REF goes live.


REF provisions in the Medical Schemes Amendment Bill

Boshoff Steenekamp gave a presentation on the Bill. The amendment bill deals with four major issues: Establishment of REF Redesign of benefit structure Promotion of improved governance Establishment of low income medical schemes In as far as REF is concerned; the following issues were raised: Administrative penalties: What happens if the fault is not with the scheme? Timelines: Are they feasible? Readiness of data following the implementation of the new PMB package. Will the industry be ready to provide credible data? The progress of the PMB review process. Boshoff Steenekamp indicated that work is continuing on PMB review process.

Concern was raised about the impact that the benefit structure will have on schemes. A concern was raised about the wording in the bill is as far as the inclusion of hospitalisation as part of PMBs is concerned. The current interpretation is that some hospitalisation will be includes as PMB. Concern was raised about the timing of new benefit structure implementation and REF going live. A suggestion was made that the two must be properly harmonised.




Meeting dates and agenda items for 2008

As per agenda



Meeting was adjourned at 14:45

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