A four-decade long relationship has ended after Bonitas severed its ties with medical scheme administrator Medscheme, appointing Momentum and Private Health Administrators (PHA) to take over its contracts.
Business Day reports that the move by Bonitas will not only wound Medscheme, but also its parent company Afrocentric. Bonitas has more than 374 000 principal members and about 750 000 beneficiaries, so it is one of Medscheme’s core clients. It has been administered by Medscheme since 1982.
Bonitas principal officer Lee Callakoppen said the industry regulator requires schemes to continuously benchmark their contracts with service providers, and that evergreen contracts aren’t in members’ best interests.
The latest development follows Medscheme’s failed attempt in December to secure an urgent interdict to stop Bonitas from tendering for a new administrator and managed care provider pending the outcome of a forensic investigation by the industry regulator.
The matter was deemed not urgent and set down for 3 March.
The Council for Medical Schemes launched a forensic investigation into Bonitas last year focused on allegedly improper procurement processes in its appointment of PHA to administer its low-income option, Boncap – previously administered by Medscheme.
Last week Bonitas said it had appointed new contracts for administration and managed care services covering all of its options except Boncap. The administration contract was awarded to Momentum and the managed care contract to PHA.
In anticipation of Medscheme’s five-year contract ending in May, Bonitas had issued a request for proposals to assess the services provided by various companies, Callakoppen said.
“Part of our review process was to extract value for our members in terms of lower non-healthcare costs,” he said, and declined to elaborate on the financial aspects of Bonitas’ present contract with Medscheme or the one it is entering into with Momentum.
Medscheme currently has 14 medical scheme clients, including the Government Employees Medical Scheme (GEMS).
It said last year that its legal proceedings against Bonitas had been prompted by “concerns over ethical, contractual and statutory obligations to the scheme and its members”.
Its concerns had been heightened by media reports alleging governance failures and procurement irregularities involving senior Bonitas executives and trustees, it said at the time.
Business Day article – Bonitas severs ties with administrator Medscheme (Restricted access)
See more from MedicalBrief archives:
Medscheme launches urgent bid to pause Bonitas move
Watchdog deepens Bonitas investigation