Healthcare practitioners are often reluctant to enter into multidisciplinary group practices or to take part in alternative reimbursement models due to concerns (warranted or not) that these arrangements may violate the Ethical Rules of Conduct for Practitioners registered under the Health Professions Act (No 56 of 1974) and lead to sanction by the Health Professions Council of South Africa (HPCSA). These concerns were echoed in the September 2019 Health Market Inquiry’s Final Findings and Recommendations Report (hereafter HMI Report), in which it was noted that the Ethical Rules relating to fee sharing, multidisciplinary group practices, employment of doctors, sharing of premises, and the restrictive interpretation of these Rules, have frustrated innovation and reform to the extent that the Rules tend to discourage integrated practices and the use of global payment / fees models.
The HMI Report accordingly recommended changes to be made to the Ethical Rules in order to promote innovation, competition, cost-effective quality care and improvement of health outcomes for patients. The HMI Report specifically identified the following Ethical Rules as potentially giving rise to anti-competitive behaviour:
- Rule 7 relating to the sharing of fees and commission;
- Rule 8 relating to appropriate business models;
- Rule 8A relating to the sharing of rooms;
- Rule 18 relating to sub-contracting and professional appointments; and
- Rule 23A relating to financial interests in hospitals.
Against this background, various proposed amendments to the Ethical Rules were recently published by way of Government Gazette (No. 46422 of 27 May 2022). The proposed amendments appear to have been made in response to the recommendations contained in the 2019 HMI Report. What follows is a summary of the current wording of the Ethical Rules, the HMI Report’s 2019 guidance on how the rules might be amended to take into account the need for greater competition, and the proposed 2022 amendments as reflected in the Government Gazette No. 46422.
Rule 7- Fees and Commission
The Ethical Rule currently reads:
“7 (4) A practitioner shall not share fees with any person or with another practitioner who has not taken a commensurate part in the services for which such fees are charged.
(5) A practitioner shall not charge or receive fees for services not personally rendered, except for services rendered by another practitioner in his or her employment or with whom he or she is associated as a partner, shareholder or locum tenens.”
In essence, the effect of Rule 7 is that practitioners may only receive fees for services personally rendered, or for the services rendered by someone in their employment. The Rule can be interpreted as restricting alternative reimbursement models, such as global fee agreements. The HMI Report proposed that Rule 7 be relaxed, although the HPCSA should retain its monitoring function over the ethical problems associated with fee sharing, including concerns relating to conflict of interest, wasted care or inappropriate levels of care. The HMI report proposed the following possible wording:
“7(4) A practitioner may share fees with another practitioner who has taken a commensurate part in the services for which such fees are charged and is subject to an express agreement, arrangement, or model of rendering multi-disciplinary services that is consistent with the guidance provided by council to ensure the protection of the profession and to provide value to patients, cost effective care, and high quality care that improves health outcomes and promotes access to healthcare services.”
The proposed amendment to Ethical Rule 7 envisions the insertion of sub-rule (6), which reads as follows:
“7(6) Notwithstanding anything contained in sub-rule (4) and sub-rule (5), a practitioner may share, charge or receive fees from another practitioner, provided that there is an express agreement, arrangement or model of rendering multi-disciplinary based health-care services to patients which is structured to contain costs of rendering healthcare services, enhance access to appropriate, high quality health-care services or products, and that such agreement, arrangement or model of rendering multi-disciplinary based health-care services to patients has been approved by council prior to its implementation.”
Rule 8 - Partnerships and Juristic Persons
The Ethical Rule currently reads:
“8 (1) A practitioner may practise in partnership or association with or employ only a practitioner who is registered under the Act and who is not prohibited under any of the annexures to these rules or any ethical rulings from entering into such partnership or association or being so employed: Provided that, in the case of employment, the practitioner so employed either provides a supportive health care service to complete or supplement the employing practitioner's healthcare or treatment intervention or is in the same professional category as the employing practitioner.
(2) A practitioner shall practise in or as a juristic person who is exempted from registration in terms of section 54A of the Act only if such juristic person complies with the conditions of such exemption.
(3) A practitioner shall practise in a partnership, association or as a juristic person only within the scope of the profession in respect of which he or she is registered under the Act.
(4) A practitioner shall not practise in any other form of practice which has inherent requirements or conditions that violate or potentially may violate one or more of these rules or an annexure to these rules.”
Presently, the HPCSA only allows radiologists to form practices with nuclear medicine physicians and radiographers. Pathologists are also permitted to form practices with medical technologists in view of the fact that the said two professions are related to each other in terms of the nature of the field of professional practice. Save for the aforesaid exceptions, practitioners are only permitted to form practices with persons who practise within the same registration categories. With reference to Rule 8, the HPCSA Policy on Business Practices (which is considered an annexure to the Ethical Rules) furthermore provides that a person (whether a natural person or a juristic person) who is not registered in terms of the Act, may not directly or indirectly, in any manner whatsoever, share in the profits or income of a professional practice (so-called undesirable corporate ownership).
The HMI Report recommended that Rule 8 should be relaxed, although it was acknowledged that practitioners should maintain their professional autonomy and independence in order to safeguard patient protection.
The HMI Report proposed the following possible wording:
“8 A A practitioner may provide collaborative healthcare services with other practitioners subject to an express agreement, arrangement, or model of rendering multi-disciplinary services that is consistent with the guidance provided by council to ensure the protection of the profession and to provide value to patients, cost effective care, and high quality care that improves health outcomes and promotes access to healthcare services.”
The proposed amendment to Ethical Rule 8 reads as follows:
“ 8(5) Notwithstanding anything contained in rule 8, a practitioner may provide collaborative health-care services with other practitioners provided that the primary aim will be to enhance the quality of health-care services to patients, and further that there is an express agreement, arrangement or model of rendering multi-disciplinary based health-care services to patients which is structured to contain costs, enhance access to appropriate, high quality healthcare services or products to patients, and that such agreement, arrangement or model of rendering multi-disciplinary based health-care services to patients has been approved by council prior to its implementation.”
Rule 8A – Sharing of Rooms
The Ethical Rule currently reads:
“8A A practitioner shall not share his or her rooms with a person or entity not registered in terms of the Act.”
Rooms are defined as “a physical structure, with an exclusive entrance and walled around for the privacy of patients, the preservation of their confidentiality and the safekeeping of records, where a practitioner conducts his/her practice.” Rule 8A has been interpreted in a highly restrictive manner to mean that medical rooms must be located in a completely separate structure with its own entrance, apart from any persons or entities not registered in terms of the Act. Rule 8A, read with Rule 8, inhibits the establishment of multidisciplinary practices. The HMI Report recommended that Rule 8A be drafted permissively whilst still ensuring the protection of patients and proposed the following:
“8A A practitioner may share his or her rooms with a person or entity registered in terms of the Act, or in terms of any other legislation regulating nursing, pharmacy, allied health and other similar professions or a juristic person who is exempted from registration in terms of section 54A of the Act, provided that this is consistent with the guidance provided by council to ensure the protection of the profession and to provide value to patients, cost effective care, and high quality care that improves health outcomes and promotes access to healthcare services, and subject to approval and oversight by council.”
The amendment seeks to replace Rule 8A with the following provision:
“8A A practitioner shall not, without the prior approval of council, share his or her rooms with a person or entity not registered in terms of the Act, or in terms of any other legislation regulating nursing, pharmacy, allied health and other similar professions or a juristic person who is exempted from registration in terms of section 54A of the Act.”
Rule 18 - Professional Appointments
The Ethical Rule currently reads:
“18(1) A practitioner shall accept a professional appointment or employment from employers approved by the council only in accordance with a written contract of appointment or employment which is drawn up on a basis which is in the interest of the public and the profession.
(2) A written contract of appointment or employment referred to in subrule (1) shall be made available to the council at its request.”
Generally, the employment of practitioners by persons not registered in terms of the Act is not permitted, unless special exception has been granted by the HPCSA. The effect of Rule 18 is that a practitioner is required to obtain permission from the HPCSA to be employed by a non-registered person. Presently the HPCSA’s Policy on Business Practices does not permit the employment of healthcare practitioners by private hospital groups.
The HMI Report did not take an absolute stand either way on the issue of employment, and proposed that that the HPCSA should set conditions for, and indeed monitor, the employment of healthcare practitioners in order to ensure that the interests of patients are prioritized over potential profit maximising incentives. In particular, the HMI Report recommended that the HPCSA should provide clear guidelines to ensure that professional appointments do not result in increased costs, over-servicing, or the loss of clinical independence on the part of clinicians. The HMI Report proposed the following possible wording:
“18 A practitioner may accept a professional appointment or employment from employers approved by council in accordance with a written contract of appointment or employment that is consistent with the guidance provided by council to ensure the protection of the profession and to provide value to patients, cost effective care, and high quality care that improves health outcomes and promotes access to healthcare services.”
The amendment reads as follows:
“18(1) A practitioner shall accept a professional appointment or employment from employers approved by the council only in accordance with a written contract of appointment or employment which is drawn up on a basis which is in the interest of the public and the profession, provided that in such instances, the employment contract has as its primary aim the enhancement of the quality of health-care services to patients, is structured to contain costs, enhance access to appropriate, high quality health-care services or products to patients, and is not designed to extract profit for the benefit of the practitioner or their employer to the detriment of patients.”
Rule 23A - Financial interests in hospitals
The Ethical Rule currently reads:
“23A(h) A practitioner may have a direct or indirect financial interest or shares in a hospital or any other health care institution: Provided that:
(a) such interests or shares are purchased at marketrelated prices in arm's length transactions;
(b) the purchase transaction or ownership of such interest or shares does not impose conditions or terms upon the practitioner that will detract from the good, ethical and safe practice of his or her profession;
(c) the returns on investment or payment of dividends is not based on patient admissions or meeting particular targets in terms of servicing patients;
(d) such practitioner does not overservice patients and to this end establishes appropriate peer review and clinical governance procedures for the treatment and servicing of his or her patients at such hospital or health care institution;
(e) such practitioner does not participate in the advertising or promotion of the hospital or health care institution, or in any other activity that amounts to such advertising or promotion;
(f) such practitioner does not engage in or advocate the preferential use of such hospital or health care institution;
(g) the purchase agreement is approved by the council based on the criteria listed in paragraphs (a) to (f) above; and
(h) such practitioner annually submit a report to the council indicating the number of patients referred by him or her or his or her associates or partners to such hospital or health care institution and the number of patients referred to other hospitals in which he or she or his or her associates or partners hold no shares.”
The HMI Report recommended that the reporting and monitoring requirements in sub paragraph (h) should be expanded, although it conceded that it was unclear whether the HPCSA has the capacity to monitor and assess the relationship between hospitals and practitioners who have shareholdings in hospitals. The HMI Report ultimately recommended that sub paragraph (h) be amended to read as follows:
“(h) Such practitioner annually submits a report to the council with the following supporting information and documents:
- the number of patients referred by him or her or his or her associates or partners to such hospital or healthcare institution and the number of patients referred to other hospitals in which he or she or his or her associates or partners hold no shares;
- the agreements concluded in relation to the acquisition and/or ownership of the interests of shares in the hospital or healthcare institution;
- how the acquisition of the financial interest is funded and whether there are other ancillary contractual relationships between all the parties to the transaction or with related parties and entities and if so, the nature of such contractual relationships;
- policies or peer review protocols for admission of patients into such hospital or healthcare institution and quality monitoring mechanisms which serve to ensure that practitioners will comply with the ethical rules of council;
- Any other information or document which the council may deem relevant.”
The proposed amendment is identical to that suggested in the HMI Report.
It is noted that the HPCSA has attempted to deal with the recommendations made in the HMI Report insofar as this concerns the proposed amendments to its Ethical Rules. It remains to be seen whether the HPCSA’s Policy on Business Practices, in particular, will be reviewed and adapted to address past inconsistencies and uncertainty regarding the application of the Ethical Rules.
Interested persons have been invited to submit any substantiated written comments or representations on the proposed amendments to the Registrar of the Health Professions Council of South Africa within three months of the date of publication of the notice on 27 May 2022.
