Discovery Health has failed to secure a court order compelling the Road Accident Fund (RAF) to pay claims for medical expenses where these expenses were paid by medical schemes, not by the claimants.
Discovery sought the order to protect it from financial losses until the Constitutional Court rules on the dispute between the administrator and the RAF over the payment of medical scheme members’ claims.
The dispute arose in August last year, when the RAF decided it would reject claims for medical expenses where these expenses were paid by medical schemes.
The RAF is liable for compensating all road accident victims in South Africa for medical expenses they incur (provided they weren’t solely responsible for causing the accidents).
Historically, a person’s medical scheme membership has not removed or diluted the RAF’s responsibilities. Typically, schemes cover the initial medical expenses incurred by members who are injured in road accidents. Once the RAF has settled an accident victim’s claim – which can take years – the scheme will be reimbursed for medical expenses covered by the RAF.
In October, Discovery took the RAF to the High Court in Pretoria and succeeded in interdicting the fund from implementing its directive to reject claims if a medical scheme has already paid them.
Read: RAF ordered to pay medical expense claims covered by medical schemes
The High Court and the Supreme Court of Appeal have dismissed applications by the RAF for leave to appeal against the judgment.
The RAF subsequently petitioned the Constitutional Court for leave to appeal. Discovery has opposed the RAF’s application. The Constitutional Court has yet to make a ruling.
‘Loss could climb to R500m’
In March, Discovery applied to the High Court in terms of section 18(3) of the Superior Courts Act, to compel the RAF to resume processing medical scheme members’ legitimate claims.
Discovery submitted it has lost R138 million since the RAF’s decision in August, and this would climb to R500m if the decision were allowed to stand for a year.
The company also argued that the non-refund by the RAF of past medical expenses would result in members not being able to access other medical treatment because their cover limit would be exceeded and their medical savings would be exhausted.
The High Court said on Monday that Discovery had not made out a case that it would suffer irreparable harm until the Constitutional Court heard and decided on its dispute with the RAF.
“The allegation by the applicant that every time the alleged unlawful tender is accepted and settled, the medical schemes are deprived of the potential to recover the past medical expenses where they had already paid, which thus results in irrecoverable losses to them, such settlement agreements therefore inflicting harm to the medical schemes that is irreparable cannot be factually substantiated.
“The agreement that is entered into between the medical schemes and its members is not based on the fact that the medical schemes will be reimbursed of the benefits that they pay to the members. The payment of benefits is instead dependent on the monthly premiums that the medical schemes receive from their members.”
Discovery to appeal
Discovery Health chief executive Dr Ryan Noach said the administrator will appeal the judgment.
“It is important to remember that this decision has no bearing on the fact that the RAF directive has been declared unlawful. The judgment from the Pretoria High Court in October 2022, which was also supported by the Supreme Court of Appeal in March this year, remains in force,” Noach said.
“The dismissal of the section 18(3) application is unfortunate, though its sole implication is that medical schemes must continue to await the outcome of the RAF’s pending appeal to the Constitutional Court.
“We remain highly optimistic that the Constitutional Court will find in favour of Discovery Health, which will be to the benefit of all medical scheme members, to ensure fairness and equity in the RAF claims-handling processes.”
Discovery Health is the largest medical scheme administrator in South Africa, providing administration and managed-care services to more than 3.3 million beneficiaries. The business has a share of more than 40% of the overall medical scheme market. It manages Discovery Health Medical Scheme, South Africa’s largest open scheme, and 18 restricted schemes.
According to the Department of Transport, there are about 800 000 road accidents a year, or about 2 200 accidents a day, in South Africa.
ON this occasion i fully support Discovery , the RAF fund was designed to assist people who are injured in road accidents , I understand the RAF are in a mess. however failing to pay medical aids for assisting their, patients in such an event the medical aids will pass the expenses on in the form of premium inctrases
RAF has a point. The medical aid schemes are subjudicating their responsibility to pay for medical assistance for the beneficiary which is their contractual obligation. Medical aid members pay premiums to be covered for medical emergencies. At last they have met their Match and someone had to call them to order.
Unfortunately when you unsettle the waters and shake the tree, you are bound to step on toes. I agree with the principles that the CEO is fighting for under RAF.
People have been benefiting unduly through the scheme.
i had an operation (due to accident), now RAF refuse to pay my claim due to that my discovery medical aid paid for it. BUT I am now unable to access other medical treatment because my cover limit is exceeded and my medical savings is exhausted. this is so not fair.