SA's medical schemes regulator has lost its High Court bid to stop Discovery Health and a division of Netcare from selling prepaid private healthcare vouchers, aimed at the millions of people who cannot afford traditional medical scheme cover.
The Council for Medical Schemes (CMS) now has to resume an internal appeal process launched by the companies more than two and a half years ago and resolve the matter under provisions of the Medical Schemes Act, reports Business Day.
In 2020, Discovery Health and Netcare Plus separately launched prepaid vouchers that provide the bearer with a consultation with a primary healthcare provider. The vouchers are aimed at non-medical scheme members, which covered just 14.9% of the population in 2022.
Discovery Health offers vouchers for GP and nurse consultations, while Netcare Plus sells vouchers for GPs, optometrists and dentists.
The CMS initially instructed the companies to stop selling their vouchers, accusing them, in 2020, of doing the business of a medical scheme without being registered as such.
Discovery Health and Netcare Plus lodged separate appeals with the CMS council, arguing that prepaid vouchers are quite different from medical schemes, which pool the risk of future healthcare expenses among members who pay monthly premiums.
Instead of hearing their appeals, the CMS lodged an application with the Gauteng High Court (Pretoria), asking it to declare both companies to be doing the business of a medical scheme and to interdict them from selling their vouchers.
But in a ruling on 13 October, Judge Mandlenkosi Motha dismissed the CMS’ application, saying it should have exhausted its own internal appeals process before turning to the courts.
“This court must decline to usurp the administration function of an organ of state (the CMS),” he said.
The dispute should proceed before the CMS appeal board, in line with section 49 of the Medical Schemes Act. He granted a punitive cost order against the CMS, meaning it must cover the full legal costs borne by Discovery and Netcare in defending the application.
CMS spokesperson Stephen Monamodi said vouchers “are unregulated and leave consumers without protection”. The CMS had approached the court to determine the legality of these rather than dealing with unregulated products in a “piecemeal” manner, he added, but would abide by the court ruling and a section 49 appeal would be heard “in due course”.
See more from MedicalBrief archives:
Discovery Health introduces prepaid vouchers for GP consultations
CMS orders a stop to prepaid, low-cost GP vouchers