Home » Health » PSMAS Service Providers Must Be Patient

It is difficult to understand why 30 or so doctors, optometrists and laboratories decided to sue Premier Service Medical Aid Society for outstanding claims and the action by PSMAS not to accept future claims from these providers does make sense.There is no dispute over the facts.

PSMAS recognises that the claims are valid, and has put them in the payment queue and was going to pay them as the cash came in, generally from employers deducting subscriptions from members, but delaying the forwarding of these subscriptions. A lawsuit is unlikely to obtain a more rapid payment. The problem is not a deliberate decision not to pay providers, or a problem of solvency.

Everyone knows, since PSMAS these days is very open about its financial position, that the society is solvent, in that its assets outnumber its debts, but is extremely illiquid because of delays in forwarding membership subscriptions.

As a result, service providers are paid far later than they should be, and we sympathise with those who provide services and then wait months for payment.

The society was in far more serious financial trouble last year when administration costs were far too high the percentage of total costs then chief executive Dr Cuthbert Dube was being paid more than $500 000 a month in salary and allowances and a group of executives was receiving pay packages far in excess of what their jobs demanded and what the society could pay.

But that has been fixed by firing Dr Dube and converting the overpaid posts into new posts that are properly paid, but not outrageously so.

Most service providers are showing patience with PSMAS knowing that the Government, easily the biggest employer of PSMAS members has promised some substantial reductions this year in its debt to the society and other employers coming under serious pressure from the society to do something about their debts.

Some service providers, who have cash-flow problems of their own, have followed a more sensible course by declining to accept PSMAS cards and asking members for cash, aising these members to claim back from the society later. While this is unpleasant, at least it fits the facts.

PSMAS has pushed back a bit. Aising the 30 suing providers that they should now charge PSMAS members cash does, in effect, encourage these members to move to other providers still willing to honour the society’s cards.

When things return to normal, it is those providers who will benefit, not those who are seeking a weird short-term solution that is unlikely to work.

Medical aid largely works on trust. This means that members pay, that employers who deduct from payrolls pass on the deductions, plus their own share of the subscriptions if that is part of the employment deal, that providers provide services on credit and claim from the societies, and that the societies ensure they are properly managed and pay claims swiftly.

The system is creaking a bit audibly at the moment, but making something worse by suing a society that is not trying to repudiate debts is not going to help.

Source : The Herald