CMS looks to stamping out SA trustee fraud

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SA’s Council for Medical Schemes is taking steps to stamp out fraud in the election of medical scheme trustees, who hold powerful sway over the lucrative contracts awarded to service providers such as administrators and brokers, reports Business Day.

The council’s senior investigator, Sibonelo Cele, said the initial 21-day public comment period for its draft declaration of undesirable business practices – published in the Government Gazette on 27 May – had been extended until 8 July because no substantive submissions were received and some medical schemes had requested more time. The declaration aims to make it more difficult for medical scheme contractors to manipulate trustee elections to serve their own interests.

The report quotes Cele as saying that in the past decade, the council had investigated numerous cases of alleged trustee election fraud and identified several cases in which proxy votes were “blatantly” manipulated. It had secured several court orders to remove fraudulently elected trustees and placed the schemes in question under curatorship.

Examples of schemes in which trustee elections were rigged included Medshield, Sizwe, Pro Sano and Hosmed, which were all placed under curatorship, said Cele. The council had also probed a complaint laid by a member of Discovery Health Medical Scheme over the election of trustees at its 2013 annual general meeting, but the matter was yet to be resolved. The member drew attention to the high volume of votes received for four trustees, which was much greater than those of other candidates.

Council for Medical Schemes acting registrar Daniel Lehutjo plans to declare the following practices irregular or undesirable for anyone working for a service provider: approaching people to stand as candidates for election; canvassing for votes; using personal information of members to influence voters; funding or campaigning for the election of an individual; or procuring proxies to engineer the election of a trustee

“It is essential that democratic processes are used to appoint or elect fit and proper persons to hold such office of trust. In this regard, it is also essential to avoid the appointment of candidates whose personal interests or the interests of those promoting or ensuring their candidature and appointment are in conflict with the interests of beneficiaries of medical schemes and potential scheme members and the public interest,” says the draft declaration.

Full Business Day report

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