Medscheme, which administers medical aid schemes including for Bonitas Medical Fund, has brought an urgent High Court application to suspend or terminate certain requests for proposals (RFP) issued by Bonitas in July, until a forensic investigation has been concluded.
Business Day reports that the RFPs relate to the bid by Bonitas to issue a new contract for the administration of its scheme, currently being undertaken by Medscheme.
The Council for Medical Schemes (CMS) instigated a forensic investigation into Bonitas after allegations about its executives and senior trustees related to improper procurement processes. The investigation is expected to take at least six months.
Medscheme, administrator for 14 medical aid schemes serving more than 4m members, said the court application was prompted by “concerns over ethical, contractual and statutory obligations …heightened by recent media reports alleging governance failures and procurement improprieties involving …Bonitas executives and trustees”.
It had sought to resolve these concerns amicably, it said, requesting written assurance from Bonitas that no RFP awards would be made before the CMS investigation concludes.
These requests were declined.
The probe by the CMS is focused on a contract awarded by Bonitas to Private Health Administrators (PHA) to administer its low-income option, Boncap, and severing the decades-long contract it had had with Medscheme, a subsidiary of Afrocentric Distribution Services (ADS), 60% held by Sanlam.
Medscheme continued to administer the rest of Bonitas’ options.
Sanlam decided last year to move its employees from Bonitas to Fedhealth – shortly after Bonitas trustees cancelled a long-standing contract with ADS to attract young members and appointed a service provider linked to a former ADS executive.
Bonitas has insisted its procurement processes were properly followed, and denied allegations of irregularities.
“During 2022 it became necessary to consider a new business model for … Boncap. Unfortunately, the current administrator, Medscheme, was unable to consider a lower pricing structure, and the scheme went out on an RFP to ensure it was able to curb costs,” it said.
However, Michael Avery, in a Business Day column, wrote that “a whistle-blower’s flash drive now in my possession lays bare a concerted effort, meticulously planned and expertly executed, to (allegedly) capture the R20bn scheme from the inside”.
“It details how senior executives, trustees and favoured consultants appear to have allegedly bent procurement rules, misused confidential data and fronted ownership structures to redirect lucrative contracts to their own circle.”
See more from MedicalBrief archives:
Watchdog deepens Bonitas investigation
CMS coy on why it prematurely terminated probe into Bonitas