Business Maverick

LEGAL BATTLE

RAF won’t budge despite losing ConCourt leave to appeal high court ruling on medical scheme claims

RAF won’t budge despite losing ConCourt leave to appeal high court ruling on medical scheme claims
A selection of South African banknotes. (Photo: Simon Dawson / Bloomberg via Getty Images) | An accident scene at the corner of Witkoppen Road and Kingfisher Road on 13 August 2021 in Johannesburg, South Africa. (Photo: Gallo Images / Luba Lesolle) | Cars drive past the Discovery offices in Sandton, Johannesburg. (Photo: Shiraaz Mohamed)

Medical scheme members can rest easy after the Constitutional Court this week ruled in favour of Discovery Health in an echo of an earlier high court ruling. But the Road Accident Fund is not budging on its stance.

Discovery Health took the Road Accident Fund (RAF) to court to declare as unlawful the RAF’s directive issued in August to exclude medical scheme members’ claims, and for the RAF to resume the processing of members’ road accident-related claims. 

Discovery Health won the case. This week, the RAF’s application for leave to appeal to the Constitutional Court was refused, with a full costs order awarded to Discovery Health.

The RAF directive, issued just over a year ago, instructed its various claims offices to stop processing medical scheme members’ claims. 

“This constituted clear discrimination against medical scheme members who are road users and pay the same fuel levies towards the RAF as all other road users,” says Dr Ryan Noach, chief executive of medical scheme administrator Discovery Health.

A quick look at the RAF’s financial records makes it clear why management is desperate to cut costs wherever it can. 

The RAF recorded a deficit of R8.43-billion for the 2022/23 financial year, compared with a surplus of R428-million the previous year. However, the fund maintains that this was largely due to not seeing an increase in the fuel levy over the past two years, against a backdrop of an average 6.9% increase in inflation during 2022/23. The deficit was also impacted by the increase in claims liability when compared with the previous year.

Chief executive of the RAF, Collins Letsoalo, told Daily Maverick the ConCourt decision has “no implications” for the fund as it did not deal with the merits of the case, but merely raised issues of a lack of jurisdiction.

“The RAF issued an internal directive on the 12th of April 2023 stating its legal position about prescribed minimum benefits and emergency medical conditions, and how those claims should be processed. That directive has neither been challenged nor set aside and thus still applies,” he says.

Letsoalo was unable to tell Daily Maverick how many RAF claims from medical scheme members had been stalled since August 2022, but confirmed that those claims would not be processed immediately.

“Our position has always been that we will not pay for prescribed minimum benefits and emergency medical conditions, as prescribed by the Medical Schemes Act. Each case will be reviewed based on its merit,” he says.

According to Letsoalo, the Gauteng Division of the High Court in Johannesburg ruling on 22 September 2023 stated: “Neither Discovery nor the medical schemes it represents have a right to directly claim from the fund, right to compensation being that of the member claimants as the road accident victims.”

However, Discovery contends that the ConCourt ruling means that medical scheme members retain the right and entitlement to claim medical expenses from the RAF, in accordance with the Road Accident Fund Act, and a century of common law precedent.

Noach says although the ruling has no short-term impact on the Discovery Health Medical Scheme or other schemes administered by Discovery Health, it does serve to protect members from possible higher costs in the longer term.

“Discovery Health and all related parties involved in the process of claiming from the RAF will immediately ensure that the valid claims submitted to the RAF are advanced, to ensure the rightful processing and settlement of these claims for members of schemes,” he says. DM

Timeline of the legal battle

Gallery

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  • Dennis Bailey says:

    Goes to the lack of common sense and intelligence of RAF management that it would invent this debacle and cost the road taxpayer millions in legal fees. That the same management wanted the high court and constitutional court ruling is diabolical. Where do we dig up this braindead leadership from?

  • Jennifer D says:

    If they continue to rape and treat unfairly the rate paying citizens of SA, they will eventually eliminate any benefit for law abiding people and force everyone to work beneath the legal framework or leave. Why should we pay UIF, tax, etc which is effectively a contribution for essential services rendered by government, when we don’t receive any such service and are forced to work around government. Screw your best customers and you will end up with the poor and unproductive ones only. Can they not see that?

    • Frank Lee says:

      They see it very well @Jennifer D… and they really don’t care

    • Thabo Mashiloane says:

      Exactly. This government and institutions like RAF like to legislate their way to profitability or growth. The SABC is also a good example by trying to force DSTV to collect TV License fees or the Post Office that wanted block courier companies from shipping anything less than 1kg. The government instead of fixing holes in their leaky bucket they want to increase VAT to 16% now. How adding more water on a leaking budget doesnt help until you shut all the holes. How difficult cant that be to understand? Just stop with the corruption and incompetence!!!!

  • Beyond Fedup says:

    Very valid comments and the way it should be. However, in this country, we are dealing with the vile and criminal anc and its rotten cadres, who are on a roller-coaster of voracious, rapacious feeding frenzy of corruption and self-enrichment to the detriment of every honest South African. Even if Cyril the spineless and useless is “shocked” nothing will be done to arrest those who have stolen the RAF funds blind as is the case for every other grand theft of public and taxpayer money. All the kingpins are free, enjoying the fruits of their stealing, they are even included in government/parliament as the party comes first above all and it protects its own. This unfortunately is the true face of the scumbag anc government/party – we have to vote them out for our very survival!

  • Thabo Mashiloane says:

    Chances are that members of a medical aid have a car and buy fuel. So why not benefit from the fuel levy?

  • Johan Herholdt says:

    It is laudable that the RAF wants to cut costs. How about not wasting money on frivolous court actions? How about firing the responsible management team? How about replacing the unmotivated and incompetent employees with skilled people who want to work for the benerit of their paying clients – us?

  • Miss Jellybean says:

    Exempt all medical aid scheme members from the fuel levy then RAF can figure out where to get financing.

  • Tim Price says:

    This is one of several court actions the RAF has faced and still faces due to unlawful directives, one of which purported to change regulations only the Minister can and resulted in claims prescribing, no doubt a deliberate attempt to cut claims and save money. Despicable mismanagement.

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