Despite a Constitutional Court ruling last week compelling the Road Accident Fund to resume and honour payment of claims lodged on behalf of medical scheme members injured in road accidents, the RAF is digging in its heels and refusing to do so.
It also claims it is not in contempt, after Discovery Health threatened to hold the body in contempt if it failed to comply with the decision.
Last Wednesday, the RAF lost its legal battle to overturn an interdict secured by Discovery in 2022 declaring its decision to exclude claims from medical scheme members unlawful, after the Constitutional Court rejected its application to appeal the lower court’s ruling.
But in a surprise turn of events, RAF CEO Collins Letsoalo told Business Day on the day of the ruling that the organisation would not resume payments to medical schemes, despite the apex court’s decision.
He said the organisation stands by the position it previously articulated.
“There are no implications on the RAF following the Constitutional Court decision. The court order did not deal with any merits. It raised issues of a lack of jurisdiction,” he said.
On Discovery’s threat to seek a contempt of court and enforcement order, he said: “They must not litigate through the media. We will not be blackmailed. If they want to go to court, so be it.”
Letsoalo said the RAF had issued an internal directive on 12 April stating its legal position about prescribed minimum benefits and emergency medical conditions, and how those claims should be processed.
It was apparent from the Constitutional Court order, he added, that nowhere did it uphold any decision by the High Court or SCA.
“The Constitutional Court simply raised an issue of jurisdiction and did not uphold any decision,” he said.
“That directive has neither been challenged nor set aside and thus still applies.”
He had previously told Business Day the RAF’s position has always been that it will not pay for prescribed minimum benefits and emergency conditions.
The RAF has “for more than a year now amended that position, in the directive, to assessing each claim on its merits and reject the payment of prescribed minimum benefits (PMBs) and emergency medical conditions (EMCs)”, he said.
He claimed PMBs and EMCs “are obligations of Medical Schemes in terms of the Medical Schemes Act (MSA) and Regulations, specifically Section 29(1)(o) and Regulation 7 and 8 of the MSA Regulations”.
“Put differently, RAF will pay any other medical costs by claimants who are medical scheme members,” Letsoalo said.
“One will note that this was a departure from the 12 August 2022 directive, which was set aside by the Gauteng High Court (Pretoria), a decision upheld by the Supreme Court of Appeal.”
Letsoalo added that the Gauteng High Court (Pretoria) on 22 September 2023 furthermore unequivocally stated that: “… neither Discovery nor the medical schemes it represents have a right to directly claim from the Fund, the right to compensation being that of the member claimants as the road accident victims (the medical scheme).”
He said this legal position has not changed “and confirms RAF’s position”.
“Medical schemes are not insurers or insurance but social benefit organisations governed by the MSA (Medical Scheme Act) and clearly differentiated through the demarcation regulations issued through a government gazette on 23 December 2016 by the National Treasury.
“The demarcation framework buttressed the … principles of medical schemes, open enrolment and community rating,” he said.
“It is, therefore, incorrect to say the RAF is in contempt of any court judgment,” he told MoneyWeb, and said the RAF calls on medical scheme members and trustees “to refuse this bullying and abuse from administrators of medical schemes”.
“They are owners of medical schemes and should reject any attempts to be put under duress and undue influence by being threatened with termination of membership when they refuse to claim from the RAF social benefit scheme that has nothing to do with any loss or damage that they have suffered.
“Medical schemes and their administrators are not claimants in terms of the RAF Act, and they must continue to pay for PMBs and EMCs without any deductibles or co-payments as obligated by the MSA and MSA regulations.”
Taken aback
“We are surprised by this position, which appears not only to be antagonistic but also flies in the face of the clear and strong position taken by the courts,” Discovery Health CEO Ryan Noach said, adding that they were unaware of any further directive issued by the RAF.
“The only directive we know about is the internal memo sent by the RAF on 12 August 2022.”
PMBs are defined by the Medical Schemes Act and “relevant only to the conduct of medical schemes in terms of how specific conditions are funded”.
“PMBs have no legal bearing whatsoever on the RAF,” he said.
“Letsoalo’s alleged assertion that the RAF will not pay the claims … is, to the best of our understanding, contemptuous of the explicit ruling of the High Court, which both the Supreme Court of Appeal and now the Constitutional Court have affirmed.
“Should the RAF fail to process these valid claims, then unfortunately, as a last resort, we would be left with no alternative but to seek to enforce the court’s ruling through a further application for a contempt and enforcement order.”
In last week’s order, the Constitutional Court said it had considered the application for leave to appeal and concluded that “it does not engage the jurisdiction of the court”, reports MoneyWeb.
“Consequently, leave to appeal must be refused. The court has decided to award costs. Leave to appeal is refused with costs,” it said.
The judgment also has industrywide implications, as it provides medical schemes and their administrators with legal assurance that they can continue covering members’ medical bills for injuries from accidents, and then claim the money back from the RAF.
Noach had said the ruling “now confirms all prior rulings, making the decision final and binding on the RAF”.
“It is in accordance with the Road Accident Fund Act, and more than a century of common law precedent,” he said.
Discovery Health’s client schemes are owed about R140m by the RAF, he added.
All related parties involved in the process of claiming from the RAF would “immediately ensure that the valid claims submitted to the RAF are advanced to ensure the rightful processing and settlement for members”.
The court’s ruling was also welcomed by the Board of Healthcare Funders (BHF), whose head of research, Charlton Murove, called the RAF’s efforts to exclude medical scheme members from the fund’s benefits “unreasonable”.
Not entitled
In handing down judgment, Judge Mandla Mbongwe said the legal position was that the RAF was not entitled “to seek to free itself of the obligation to pay full compensation to victims of motor vehicle accidents”.
“Thus the directive challenged in the present proceed is outside the authority given by the enabling statute. More specifically the directive is inconsistent with the express provisions of Section 17 (of the RAF Act) and is, consequently, unlawful,” he said.
The social security protection the RAF Act provides “is in no way intended to impoverish medical schemes who, were the directive to stand, would face a one direction downward business trajectory as a result of their members becoming victims of motor vehicle accidents”.
“The levy paid on fuel provides the funds for payment of compensation to motor vehicle accident victims and nothing in the law obliges medical aid schemes to contribute towards such compensation by the payment, from the time of hospitalisation and treatment of a motor vehicle accident victim, of medical expenses without a reasonable expectation of reimbursement upon settlement of the claimants’ claims in terms of the RAF Act.”
MoneyWeb article – Discovery Health hails ConCourt’s RAF ruling (Open access)
Business Day PressReader article – Top court hands medical schemes an RAF win (Open access)
Business Day PressReader article – Discovery issues warning to RAF (Open access)
MoneyWen article – RAF says it is not in contempt of high court judgment (Open access)
See more from MedicalBrief archives:
Discovery setback in tussle with RAF
Discovery appeals dismissal of application for RAF to resume payments
Court blow for Discovery Health in RAF feud