RAF called out for having ‘thrown mud’ at Sunshine Hospital

The conduct of the Road Accident Fund (RAF) and its CEO, Collins Letsoalo, has been slammed in a damning high court judgment, including the manner in which it has refused to abide by valid court orders.

In a judgment handed down in the High Court in Pretoria on Thursday to an application by the RAF to stay the execution of 181 writs of execution issued by Sunshine Hospital, Judge Jan Swanepoel said notwithstanding that the courts have expressed concern with the manner in which the fund has refused to abide by valid orders, it has continued to bring applications such as this one, “and not even punitive costs orders have brought about a change of heart”.

Read:
RAF head office assets in danger of being auctioned
RAF’s urgent bid to stop auction of its moveable assets dismissed

“These applications have resulted in the public purse incurring substantial legal costs. This practice should not continue,” he said.

“It may be that courts have to start considering de bonis propriis [personal] cost orders against those officials at the RAF who are responsible for the launching of these type of applications, in this case the Chief Executive Officer, Mr Letsoalo.”

The RAF’s application was dismissed with costs.

However, Letsoalo told Moneyweb at the weekend that Section 15 (3) of the RAF Act is very clear in that he will not be liable in his personal capacity for anything he has done in good faith.

Letsoalo claimed the “ugly head” of “systemic bias” is creeping in at the North Gauteng High Court against the RAF.

“It looks like in some courts, when people see the name RAF, they have already taken a decision no matter what we say. This is one of the cases that I thought was ‘a slam dunk’.

“All we are saying is suspend the court order until we bring a rescission application so … the facts can be in front of the court to determine. How can that be mala fides,” he asked.

Read: High Court orders RAF CEO to pay legal costs ‘out of his own pocket’

Letsoalo said the RAF aims to pay.

“Our aim is to make sure that we pay the proper and regular payments that must be paid by the RAF. If it is not in line with the law, we are going to ask [for] these things to be rescinded.

“We have got about 12 people who are suspended at the RAF because of fraud and corruption linked to Sunshine Hospital and the bills that were being paid. That is the reality,” he said.

Letsoalo claimed the attorneys of RAF claimants go to small municipalities and irregularly get default judgments against the RAF without serving papers on the fund.

He said the RAF is obtaining legal advice on Judge Swanepoel’s judgment, and “if it is appealable, we will appeal it”.

Serious allegations

Swanepoel said the RAF argued that there are serious allegations against Sunshine, a private hospital that only admits victims of motor vehicle collisions, and that it would be improper to enforce payment of the writs of execution until the investigations have been completed.

He said the RAF contends that the RAF Act does not permit the submission of global accounts and that each supplier is expected to lodge its own claim.

Swanepoel said the RAF further argues that the ethical rules of the Health Professions Council of South Africa (HPCSA) prohibit a medical practitioner from accepting a commission or consideration from another practitioner or institution for the purchase, sale or supply of goods.

The RAF said the rules also prohibit the sharing of fees or charging fees for services not rendered, and practitioners may also only practise in partnership with other practitioners who are registered as such, and the system that Sunshine employs offends these ethical rules.

‘No bearing’

Judge Swanepoel said none of the ethical rules referred to by the RAF, in his view, have any bearing on this matter.

“The practice of submitting global claims is not, in my view, in any manner a breach of the ethical rules,” he said.

“Nor, I believe, is the RAF’s interpretation of the RAF Act correct.”

Judge Swanepoel said Section 17 (5) of the act obliges the RAF to pay suppliers for their services, but it does not prescribe the manner in which claims must be lodged with the RAF.

“In any event, this practice was established by the RAF 16 years ago, for its own convenience, and to improve the efficiency of the claims system,” he said.

Read: RAF notice that saw claimants ‘excluded’ declared unconstitutional

However, Letsoalo said the HPCSA and RAF Act are very clear that global billing is not allowed, and just because their predecessors permitted it does not mean the RAF must perpetuate it.

Swanepoel said the RAF had filed a complaint against Sunshine and the medical practitioners with the HPCSA. The investigation is apparently ongoing, and thus far, there has been no indication the HPCSA takes a different view to his on these issues.

Inflated claims?

Swanepoel said a further complaint against Sunshine is that its claims are statistically at odds with claims by other hospitals.

He said the RAF says that of the 41 254 open claims on its system, the claims by Sunshine represent 0.5% of the number of claims but 16% of the value, with this alleged anomaly raising the RAF’s suspicions that Sunshine has inflated its claims.

Swanepoel said whatever the reason for the alleged anomaly, the fact is that RAF employees have been intimately involved in verifying the claims.

He added that the RAF Forensic Investigation Department (FID) has investigated the allegation of over-billing and found no evidence of wrongdoing.

“Despite the SIU [Special Investigating Unit] having investigated Sunshine for the last two years, it has evidently not found any wrongdoing,” he said.

Swanepoel added that the RAF commissioned an investigation by Universal Healthcare, a managed care administrator, to investigate the Sunshine claims, and it has produced a report on its findings.

However, Swanepoel said there is no evidence that the files reviewed by Universal Healthcare so far relate to any of the writs sought to be stayed.

‘Unconvincing’

“In my view, the RAF’s claims of widespread impropriety by Sunshine [are] unconvincing.

“The RAF has simply thrown mud at Sunshine in the hope that some of it sticks,” said the judge.

“More importantly, each of the claims for which writs have been issued has been adjudicated by a court and court orders have been granted, in some instances, with the RAF’s consent,” he added.

“The RAF has known about the judgments for months, and one must ask why the RAF has not investigated these specific claims individually.

“If the RAF had done so, and had found irregularities in a particular case, then it was entitled to seek rescission of that judgment. It has, however, not done so.”

No justification

Judge Swanepoel said there is not the slightest indication that any of the 181 Sunshine Hospital claims were irregular and only the RAF’s “vague and unsubstantiated belief, which is contradicted by the RAF’s own FID investigation, that Sunshine has acted unlawfully”.

He added that there can simply be no justification for the RAF to wait months or even years, fail to apply for rescission of the judgments in the courts where judgments had been granted, and then approach this court on the basis that it is ‘convenient’ or ‘cost-effective’ to do so.

Swanepoel said he concurred with another judgment in which it was stated that the RAF was wilfully refusing to adhere to valid orders, which smacked of contempt.

Read: RAF CEO could be jailed for contempt of court

“The RAF has simply refused to give effect to court orders, and its conduct is contrary to its constitutional obligation as an organ of state to assist in ensuring the dignity, accessibility and effectiveness of the courts.

“The RAF ignores the fact that a court order binds all persons and organs of state.

“It cannot unilaterally decide which orders it wishes to obey and which not,” he said.