The High Court in Pretoria has ordered the Council for Medical Schemes (CMS) to provide the Board of Healthcare Funders (BHF) with all the documents that will shed light on the regulator’s decisions on low-cost benefit options (LCBOs).
The judgment, which was handed down on 10 July, is a preliminary victory in an ongoing legal battle between the BHF and the CMS over LCBOs.
The BHF represents most of the country’s medical schemes and healthcare funders, representing schemes and administrators with nearly 4.5 million beneficiaries.
In August last year, the BHF applied to the High Court to overturn the moratorium that effectively prohibits medical schemes from providing LCBOs to South Africans who cannot afford full medical scheme membership.
The CMS, the Registrar of Medical Schemes, and the Minister of Health were cited as the first, second, and third respondents, respectively.
Specifically, the BHF asked the High Court to:
- Lift the moratorium preventing medical schemes from providing LCBOs in circumstances where the CMS is refusing to grant applications for exemptions by schemes that will enable them to provide LCBOs, pending the finalisation of LCBO guidelines.
- Declare that the failure by the respondents to develop and implement the LCBOs guidelines is irrational, unreasonable, and unlawful, in terms of section 6 of the Promotion of Administrative Justice Act and section 1(c) of the Constitution.
The CMS started work more than seven years ago on developing a legal framework to enable medical schemes to offer LCBOs.
LCBOs will not have to provide all the benefits set out in the Medical Schemes Act – in particular, the prescribed minimum benefits.
Pending the finalisation of the regulatory framework, the CMS has granted exemptions to certain insurers to provide health insurance products that are similar to LCBOs.
The BHF believes the authorities are blocking LCBOs to make South Africans receptive to National Health Insurance (NHI).
It did not suit the Department of Health to have increased membership of medical schemes or for the private sector to deliver a viable low-cost product at the same time as it tries to sell NHI, the BHF’s head of research, Charlton Murove, said in his founding affidavit accompanying the association’s application to the High Court in August.
Legal tussle over the record of decisions
The BHF wants a record of how decisions against low-cost options were made, to supplement its argument in its main application against the CMS.
It submitted to the High Court that although the CMS provided a record, it consisted mainly of documents sourced from the CMS’s website, which were already publicly accessible.
It said the record did not contain the “source documents” upon which the decisions were based or the documents reflecting deliberations on how the decisions about LCBOs were made.
As a result, it served a notice (in terms of Rule 30A of the Uniform Rules of Court) on the respondents that included a comprehensive list of documents.
Letters were exchanged between the parties’ attorneys that resulted in the filing of a supplementary record containing only 16 of the requested items on 11 November 2022, according to the High Court’s judgment.
The BHF was not satisfied with the response and four days later launched an application for the respondents to comply with Rule 53(1)(b) of the Uniform Rules of Court. Rule 53 imposes a duty on a decision-maker to deliver a record of proceedings that an opposing party seeks to have corrected or set aside.
Counsel for the respondents called the list of documents in the Rule 30A notice a “horrendous shopping list”.
“The fact that the documents sought seems to be voluminous and the list quite extensive is of no concern. As stated above, the documents are properly identified and described,” Acting Judge GB Botha said.
The BHF relied heavily on the judgment of the Constitutional Court in the case of Helen Suzman Foundation v Judicial Service Commission (2018) in which it was held that “every scrap of paper that can throw light on the decision-making process is relevant and needs to be produced. I agree,” Acting Judge Botha said.
He gave the CMS and the Minister of Health 10 days from the date of his order to send all the documents listed in the BHF’s notice of 4 October 2022 to the Registrar of the High Court and the BHF.
The three respondents were ordered to pay the costs of the application.
