Scheme Reimbursement Rate (SRR)

At the 2020 AGM, Mr.  Murray asked, “How is the SRR calculated? Is it consistently applied to all AMS members, and why can’t members just look it up on the AMS web site?”

The Medical Schemes Act states:

RULES OF MEDICAL SCHEMES, Section 29 Matters, for which rules shall provide:

(q) The payment of any benefits according to

1. a scale, tariff or recommended guide; or
2. specific directives prescribed in the rules of the medical scheme.

The Medical Schemes Act requires every scheme to reimburse members and/or providers against a predetermined rate described in the Rules. Each Plan or Option shall stipulate what reimbursement rate is used. AMS defines the SRR as follows:

Scheme Rule - Scheme Reimbursement Rate

1. “Scheme Reimbursement Rate” (SRR) – is equivalent to:
   1. 100% of the Discovery Health Guide to Fees; or
   2. 100% of the rate agreed between the Scheme and a service provider or group of providers; or
   3. the dispensing fee for medicines regulated by the Medicines and Related Substances Act; or
   4. 100% of the National Health Reference Price List published by the Council for Medical Schemes in 2006, plus an inflationary factor equal to: 2020 = 2006 + 234,4%

This definition is consistently applied across both the Managed Care Plan (MCP) and Standard Care Plan (SCP). However, what is not consistent is the percentage of that rate which the Scheme reimburses members or providers. MCP generally has a higher rate, up to 230% of the SRR for specialists, whereas SCP is 100% and VCP is a capitated rate which is calculated differently based on the Prime Cure negotiated rates. The reason for the reference to the National Health Reference price is as follows: Historically, schemes and providers collectively negotiated annual tariffs which were published as the official industry Scheme Reimbursement Rate, and all schemes and most providers used it. This was outlawed as anti- competitive behaviour around 2001 by the Competition Commission. The Council for Medical Schemes continued the practice and published the National Health Reference Price List until 2006 whereupon it was discontinued. Consequently, many schemes continue to express their SRR as a percentage of the last published 2006 rate as there is no other available benchmark published in the industry. This resulted in schemes and administrators independently negotiating rates which they could then call “their” SRR. Ironically, due to Competition law, these may not be advertised, as competitors would then have an advantage. DH or other scheme rates can therefore not be advertised, as Medscheme or Metropolitan Health, for example, could then attempt to negotiate better deals with unfair competitive advantage. Further, the industry recognised that by forcing prices down, members didn’t always benefit, as services tended to be reduced.

In 2020, AMS has a total of 125 924 tariffs covering 53 disciplines, excluding hospitals, sub-acute facilities and hospice. Many have been negotiated and are subject to confidentially agreements. The tariff file is too large to place on the Scheme’s website, such that a member could accurately read it. We encourage members to rather call the Call Centre to enquire about the SRR of the healthcare services they consider purchasing.