Spat over no-payment directive to medical funds intensifies

The Road Accident Fund (RAF) has hit back at a “legal review” by the Council for Medical Schemes (CMS) of its directive not to make payments to claimants if their medical aid scheme has already paid.

The RAF has also gone on the offensive about “misinformation” being spread about the fund.

Read:
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Council for Medical Schemes red flags RAF non-payment

The RAF told the CMS on Wednesday it should “stay in its lane” and stick to its mandate in terms of the Medical Schemes Act (MSA), adding that the fund will in future tackle “misinformation head-on”.

It said in a statement that the level of misinformation in a CMS article cannot be left unchallenged and the council “should just do the right thing, i.e. withdraw this so-called legal review”.

Review dissected

The RAF said it has struggled to find any direct reference and quotes from the RAF Act, MSA, MSA regulations and relevant case law in the “legal review”.

It said that when interpreting the MSA provisions, the following is paraphrased: “MSA further obliges medical schemes to pay for Prescribed Minimum Benefits (PMB), which include any emergency medical condition, under which motor vehicle claims could fall, in full.”

It said this omission “is very obvious” and that it is found in CMScript, a CMS publication (Issue 8, 2014), where it states: “Regulation 8 stipulates that any benefit option offered by a medical scheme must pay in full for the diagnosis, treatment and care of the PMBs. No co-payments may be charged and no deductibles be used.”

The RAF said medical schemes simply have no reimbursive rights on PMBs and emergency medical conditions, especially from a social benefit fund.

It said the authors of the “legal review” simply ignore these facts without any rationale.

The RAF was reacting to a “legal review” published earlier this month by CMS senior manager of legal services John Letsoalo and senior analyst benefits management Mpho Sehloho titled ‘Subrogation: Medical Schemes Act on Motor vehicle accident payments’.

One of the major findings by the authors was that they believed the RAF’s directive that no payments must be made to claimants if their medical aid scheme has already paid for their medical expenses arising from a road accident is not in line with the MSA.

The authors also concluded that the non-payment by the RAF of these medical costs is not in the interest of the beneficiaries of medical schemes.

Discovery

Discovery Health has been embroiled in court battles with the RAF over the directive, which was issued on 12 August 2022 and declared unlawful by the High Court in Pretoria on 27 October 2022 following an urgent application launched by Discovery Health.

This ruling was upheld on review for leave to appeal at both the High Court and the Supreme Court, with the RAF subsequently appealing this ruling at the Constitutional Court.

The Constitutional Court has not yet issued a ruling.

The RAF on Wednesday said it has observed a disturbing trend of bullying and misinformation concerning its new model as clearly articulated in the 2020-25 Strategic Plan.

It said this Strategic Plan has been a public document since the beginning of 2020 and it is therefore fair to assume it is well understood and “any distortions are deliberate”.

“It would seem, it has become a norm that those that are unsuccessful in trying to frustrate the objectives of the RAF strategy resort to misinformation, which at first looked to us like confabulations.

“It is always an attempt to portray the RAF as an organisation that is in disarray, recalcitrant, and ‘an organization in a crisis’,” it said.

This is possibly a reference to the lawyers from 10 organisations who compiled and last month publicly released a highly critical memorandum of the “crisis” at the RAF, and Parliament’s Standing Committee on Public Accounts (Scopa) last month highlighting a litany of problems at the RAF during a second visit to the offices of the fund in less than three months.

But the RAF said defiantly on Wednesday: “One will struggle to find facts in all these attacks. It is purely misinformation, lies and more lies.

“When faced with the real facts, the culprits simply disappear only to re-emerge later with another wave of misinformation.

“We posit that this is deliberate and the perpetrators are not innocent and ignorant South Africans … [but] are mostly experienced and seasoned professionals,” it said.

Read/listen: Is the Road Accident Fund a mess?

“We had previously taken a position that we are not going to respond to every media article publishing these vitriolic attacks but it would seem that this position was a bad judgment on our part because these attacks are consistent and clear propaganda.

“Our position has consequently changed. We are henceforth going to tackle this misinformation head-on, whichever direction it will be coming from.”

‘Insurance principle not applicable to fund’

In a reference to the title of the CMS “legal review”, the RAF stressed that it should be clear that “subrogation” is an insurance principle and therefore will not apply to RAF.

“The interpretation of the CMS of this principle is misplaced and misleading and it would seem quite deliberately,” it said.

The RAF added that people would be forgiven for concluding that the CMS has jurisdiction in a court matter between medical schemes administrator Discovery Health and the RAF, a social security fund.

“However, the MSA seems very clear on the mandate of the CMS. You will find no such power or mandate given.

“It then boggles the mind because if CMS really wanted to ‘assist the medical scheme members with clarity’ it could have simply joined the court proceedings as amicus curiae or as a joint applicant on the side of Discovery Health,” it said.

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

The RAF challenged the CMS to produce evidence of inquiries by medical schemes for clarity or a position from the CMS on the issue.

It said the CMS, as “a responsible regulator”, could simply have told such medical scheme members the matter is “remote to its mandate”.

The RAF said some medical schemes, including Discovery Medical Scheme, have been demanding that their members claim against a social security fund, the RAF, and once they receive the proceeds they then must hand over those proceeds to the medical scheme.

It said that should the members not hand over the proceeds then their membership is terminated, with the blessing of the CMS.

“The medical scheme members have no choice but to adhere to the demands or be kicked out of the schemes.

“There is no provision in the RAF Act for this backhanded scheme of arrangements and medical schemes are not claimants in terms of the RAF Act.

“It is the legal obligation of the medical schemes to adhere to the MSA and its regulations and that the PMBs and Emergency Medical Conditions must be paid in full without deductibles and co-payments,” the RAF said.

Comment was requested from the CMS but a response has not yet been received.