In a long-awaited judgment handed down last Friday, the Supreme Court of Appeal (SCA) has interdicted the Road Accident Fund (RAF) from making any deductions from compensation paid to claimants on the basis that their medical expenses have been or will be paid by their medical aid schemes, reports Moneyweb.
The appeal related to a December 2024 judgment of a full Bench of the Gauteng High Court (Pretoria) dismissing Discovery Health’s request for an order declaring the RAF to be in breach of a previous High Court order related to the fund’s liability for the payment of the past medical expenses of road accident victims belonging to medical schemes.
Last week, the SCA set aside and replaced the judgment by declaring that the RAF and former RAF CEO Collins Letsoalo are in breach of the court’s order and judgment dated 27 October 2022 and “of their constitutional duty to obey and implement the judgment”.
That judgment – by Judge Mbongwe – declared unlawful a 12 August 2022 RAF directive instructing RAF employees not to make any payments to claimants if their medical aid scheme had already paid for their expenses linked to road accidents.
Additionally, on Friday, the SCA further interdicted the RAF and Letsoalo, with immediate effect, from giving effect to the directives they issued on 13 April 2023 and 2 November 2023.
These two directives were issued by the RAF following Mbongwe’s order on 27 October 2022.
Discovery claimed these perpetuated the RAF’s breach of that order by continuing to reject claims for past medical expenses because the victim’s medical aids had already paid them.
It further claimed Letsoalo and the RAF had sought to circumvent the judgment by adopting a new ‘phantom’ directive on 13 April 2023, which it has refused to disclose to Discovery.
This ‘phantom’ directive related to the obligations of medical schemes under the Medical Schemes Act to provide PMBs for emergency treatment required by scheme members.
The SCA ordered the RAF and Letsoalo to take all necessary steps to comply with the judgment within 14 days and to report their compliance in writing to the court’s registrar and Discovery Health’s attorneys.
Costs were awarded against the RAF and Letsoalo.
The judgment dismissing Discovery’s application potentially had significant implications for medical aid members in the form of higher medical aid premiums.
Discovery previously indicated that medical schemes incur an irrecoverable loss of about R500m per year when the RAF fails to pay members for past medical expenses incurred in accidents.
Mbongwe listed the consequences for Discovery’s members and their clients if the RAF directive were implemented, and recorded that the rejection of claims to pay past medical expenses to claimants meant that:
• Schemes would no longer receive reimbursement for past medical expenses incurred for the treatment of their clients, whose rights to recover these from the RAF were set to be taken away.
• Medical aid schemes would suffer a significant, unplanned loss of income, requiring them to reassess and increase monthly premiums to ensure the schemes’ sustainability.
• Members would be prejudiced in that they would contribute to the RAF fuel levy but would not receive full compensation from the RAF in the event of injuries caused by negligent drivers.
• Schemes might find it viable to exclude claims for medical expenses arising from accidents, which would entitle RAF claimants to claim for past medical expenses, but this in turn would undermine the very purpose of the schemes because members would be forced to incur the costs upfront and claim later.
Judge Tati Makgoka, with SCA judges Caroline Nicholls, Phillip Coppin, Esther Steyn, and acting Judge Fiona Dippenaar concurring, said on Friday the agreement between medical aid schemes and their members provides that the scheme pays the claimant’s medical expenses and, when the claim is settled, the member reimburses the medical aid scheme.
Makgoka said reimbursement is not the same as sharing proceeds.
“Accordingly, an agreement between a medical aid scheme and a member who claims under the RAF Act to reimburse the scheme for past medical expenses does not fall within the provision’s scope,” he said.
Moneyweb article – Discovery wins SCA appeal against RAF medical expense deductions (Open access)
See more from MedicalBrief archives:
Discovery allowed to appeal RAF medical claims ruling
Discovery judgments mount amid RAF dispute