Medical scheme rules may have no application if they fail to fulfil statutory law. The relationship between medical schemes and their members is not only governed by the medical scheme rules but primarily by obligations imposed by statute.
The public policy considerations taken into account in the Medical Schemes Act which give rise to prescribed minimum benefits (PMBs) means that the medical scheme rules must adequately cater for PMBs or those rules face the possibility of being disregarded.
In The Council for Medical Schemes v Genesis Medical Scheme, the Supreme Court of Appeal considered the law applicable to PMBs. The Act and its regulations require medical schemes to provide a minimum level of treatment for all its members suffering from conditions which are subject to PMBs, irrespective of whether those benefits are provided within the public or private sector. The regulations also contain ameliorating provisions that are available to a medical scheme to mitigate their claim exposure if appropriate arrangements are in place for treatment by designated service providers.
The court held that the medical scheme had failed to establish arrangements with any designated service providers. As a result, despite limitations imposed upon members by the scheme rules to the contrary, the PMB conditions had to be covered in full.
The provision for PMBs contained in the Act and regulations aim to serve the public interest. A member may not waive rights conferred upon it by law where that law serves public and individual interests. Public policy requires statutory law to be observed irrespective of any contractual waiver or limitation agreed to by a member since that member is not the only person with an interest in the matter. The statute serves to protect a class of persons bargaining with medical schemes from an inferior position.
This case provides clear support that the relationship between a medical scheme and its members is more than a contractual arrangement. It is one based in the public interest allowing public policy considerations to be taken into account by courts when determining whether to apply certain medical scheme rules.