The Road Accident Fund’s (RAF) directive – that no payments be made to claimants if their medical aid scheme has already paid for medical expenses after a road accident – is not in line with the Medical Schemes Act, says the Council for Medical Schemes (CMS).
Nor, said CMS senior manager for legal services John Letsoalo and CMS benefits management senior analyst Mpho Sehloho, is the decision in the interest of scheme beneficiaries, reports MoneyWeb.
Discovery Health has been engaged in a legal tussle with the RAF over the directive, issued on 12 August 2022, and which the Gauteng High Court (Pretoria) declared unlawful on 27 October, after an urgent application from Discovery.
This court ruling was upheld on review for leave to appeal at both the High Court and the Supreme Court, with the RAF subsequently appealing the ruling at the Constitutional Court.
Discovery unsuccessfully attempted to obtain an order forcing the RAF to immediately resume the payment of past medical expenses for injured members.
Leave to appeal this ruling was heard by the High Court on 4 August, with judgment reserved.
‘Unfair discrimination’
Last week, Discovery Health CEO Dr Ryan Noach welcomed the CMS statement on the RAF directive.
“We agree with the CMS interpretation – which notes the negative effect on medical scheme reserves if members are excluded from RAF payments.
“This is an unfair discrimination against them…who as road users also pay the fuel levies,” he said.
Discovery awaits the outcome of the Constitutional Court review and Noach said he was confident it would be favourable for medical scheme members, “considering the strong judgments to date by the High Court and Supreme Court of Appeal”.
Clarity sought
Letsoalo and Sehloho said medical scheme members had sought clarity or a position from the CMS on the issue.
“The CMS is not obliged to release commentary on matters remote to its mandate, but …it became necessary to clear up any anomalies.”
Under the Medical Schemes Act, they said, schemes undertake liability in return for a contribution by, among other things, granting assistance in defraying expenditure incurred in connection with the rendering of any relevant health services.
The Act further obliges medical schemes to pay for prescribed minimum benefits in full, which include any emergency medical conditions, under which motor vehicle claims could fall.
Unless a claim is specifically excluded under the schemes’ rules and/or does not meet the criteria of the definition of relevant healthcare, they said, “the scheme must still pay”.
They added that most medical schemes provide for handling motor vehicle claims in their rules, wherein members of medical aids can claim compensation from the RAF for such claims and any future healthcare services that may arise due to that motor vehicle accident.
It is also common cause that where the RAF is responsible for claims, which a medical scheme has paid in terms of its rules and the MSA, the RAF should refund such amounts paid to the medical scheme.
Letsoalo and Sehloho added that members of medical schemes who would have claimed directly from the RAF, and received compensation for such claims, must also pay such amounts back to the medical scheme, which is commonly known as subrogation.
“Should a member not receive any compensation from the RAF even after claiming, the scheme remains liable for the costs of the treatment, subject to the registered scheme rules. and (the member) must not be required to repay/refund such funds to the scheme.
“The scheme may, however, attempt to recover such amounts paid from the RAF for the members’ benefit.”
Subrogation, they said, allows schemes to minimise losses due to these claims and keep members’ contributions reasonable by holding responsible parties accountable.
It also prevents members from being “overcompensated” or unjustifiably enriched for the loss since they should not receive double compensation from the medical scheme claim payout and the recovery from the RAF.
Risk pool funds
The financial risk associated with health interventions, for which the need is uncertain, is equitably shared within the covered population through a risk pool, managed by medical schemes under the MSA.
“Therefore, the CMS cannot condone … members being forced to be out of pocket due to non-payment of medical costs by the RAF, where these have since been paid.”
By implication, they added, the RAF’s refusal to refund medical schemes leads to the unfair deterioration of the entire risk pool funds.
MoneyWeb article – Council for Medical Schemes red flags RAF non-payment (Open access)
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Discovery appeals dismissal of application for RAF to resume payments
Court blow for Discovery Health in RAF feud
Discovery wins court bid to stop ‘rogue’ RAF’ directive