The Council for Medical Schemes (CMS) is applying for the re-consideration of the Supreme Court of Appeal (SCA) decision handed down last month which dismissed its appeal against a High Court directive to provide the Board of Healthcare Funders (BHF) with documents on low-cost benefit options (LCBOs).
On 16 December 2023, the SCA dismissed CMS’s appeal, saying it had no reasonable prospect of success.
Stephen Monamodi, senior manager at CMS, says although the Regulator accepts the SCA’s judgment, they are going to apply to the court to review the decision.
“As a responsible regulator, the CMS believes that it has provided BHF will all required and relevant documents to prosecute their review application. More so, the CMS has completed the LCBO report and submitted same to the Minister of Health. CMS has thus discharged its Section 7 of the Medical Scheme Act obligation,” says Monamodi.
How it all began
The recent court decision marks the latest step in the legal dispute between BHF and CMS regarding LCBOs. This conflict started in 2022 when BHF took the Regulator to court, accusing them of delaying the implementation of LCBOs.
Read: BHF takes legal action against the CMS to compel it to review the LCBO guidelines
LCBO options include cheap, pared-down benefit packages that do not provide all the benefits required by the Medical Schemes Act – in particular, the prescribed minimum benefits.
The dispute arises from the CMS’s efforts, spanning over seven years, to develop guidelines for medical schemes to offer LCBOs. Since 2016, the CMS has been working on developing a legal framework that will enable medical schemes to offer LCBOs.
Pending the finalisation of the regulatory framework, the CMS granted exemptions to certain insurers to provide health insurance products that are similar to LCBOs.
BHF, representing the majority of the country’s medical schemes, sought to overturn the perceived moratorium preventing LCBOs, arguing for an exemption until CMS had established the legal framework.
CMS contended that there was no moratorium, and that providing a general exemption would be unlawful.
In the application filed on 8 August 2022, the BHF requested the High Court to lift the alleged moratorium preventing medical schemes from offering LCBOs. They argued that the CMS was denying exemption applications by schemes to provide LCBOs while guidelines were pending. Additionally, the BHF sought a declaration that the respondents’ failure to develop and implement LCBO guidelines was irrational, unreasonable, and unlawful under relevant legal provisions.
The road so far
Since the BHF filed its main application in 2022, it has brought further applications concerning the record relating to the CMS’s and the Minister of Health’s decisions on LCBOs.
The BHF believed that it had not been provided with a complete record. It said the record did not include the “source documents” upon which the decisions had been based or the documents reflecting deliberations on how the decisions about LCBOs had been made.
The BHF launched an application, in terms of Rule 30A of the Uniform Rules of Court, for the CMS and Minister to provide a list of documents that it believed the respondents should have produced.
In a judgment delivered on 10 July 2023, the acting judge gave the CMS and the Minister of Health until 24 July that same year to produce all the documents listed by the BHF.
Two days later, when the requested documents were not handed over, the BHF filed an urgent contempt-of-court application against both parties. On the same day, the CMS and the Minister applied to appeal the judgment but it ended up being dismissed because “a case had not been made to justify the urgency of the application”.
Read: Medical schemes body loses urgent contempt-of-court application against CMS
Subsequently, the Health Minister settled with the BHF and provided the records it sought, but the CMS fought back, taking the matter to the SCA.
Responding to the SCA’s judgment, Monamodi says the 2022 court application was about the development of the legal framework, that the CMS was accused of delaying the process.
“But now that we have submitted the (LCBO) report to the (Health) Minister’s Office, it is out of our hands,” he says.
The SCA ruling includes a cost order against the CMS. Monamodi says, at this stage, it is uncertain how much the CMS has spent on the case “as the matter is still ongoing”.
“The costs are still subject to be taxed by a tax master once all legal proceedings have been completed,” he says.
