ActionSA MP Dr Kgosi Letlape at the launch of initiatives focused on meaningful economic transformation in South Africa at the Apartheid Museum Auditorium in Johannesburg on 7 May 2025. (Photo: Gallo Images / Luba Lesolle) 
Letlape lodged the complaints against three medical schemes – Discovery, Medscheme and the Government Employees Medical Scheme (GEMS) – on Monday, 14 July, alleging that serious incidents of fraud and intimidation had occurred at the companies over several years.
Letlape is a member of the parliamentary portfolio committee on health and served as president of the Health Professions Council of South Africa (HPCSA) between 2015 and 2021. His decision to file the criminal complaints follows the release of the Section 59 Final Investigation Report, which found that between 2012 and 2019 there was evidence that the fraud, waste and abuse (FWA) systems used by medical schemes showed racial discrimination against black service providers.
“The section 59 report, which served as a catalyst for these charges, was only tabled before the portfolio committee on health on Friday [11 July]. The earliest opportunity to file the charges was Monday, after studying the matter,” said Matthew George, spokesperson for ActionSA.
Read more: Probe finds evidence of racial discrimination against black healthcare providers by medical schemes
The complaints were lodged at Lyttelton Police Station in Centurion, Gauteng. Lieutenant Colonel Mavela Masondo, spokesperson for the SAPS in Gauteng, confirmed that a case of fraud had been opened and would be transferred to the Directorate for Priority Crime Investigation (Hawks) for further investigation.
The section 59 report noted that the investigative panel was not a judicial body and did not make legal findings about unfair discrimination in terms of section 9 of the Constitution or the Promotion of Equality and Prevention of Unfair Discrimination Act.
However, it did make a “factual finding that the evidence of the risk ratios before us shows racial discrimination against black service providers by the [medical] schemes”.
Patterns of behaviour
According to ActionSA, Letlape’s time as president of the HPCSA, as well as his roles as chair of the council’s Preliminary Committee of Inquiry and chair of the Medical and Dental Board, exposed him to information that informed the criminal complaints.
During this period Letlape was “privy to various investigations and disciplinary proceedings involving conduct by medical aid schemes that may have crossed into criminality”, said ActionSA.
“ActionSA believes that laying formal criminal complaints is a critical step to enable investigators to lawfully access the relevant records, communications and case files. These materials, which ActionSA is not in a position to obtain independently, are essential to uncovering the full extent of any wrongdoing and ensuring that those implicated are held to account, including both medical schemes and practitioners who may have engaged in criminal conduct,” it said.
“The patterns of behaviour uncovered by the section 59 investigation, coupled with Dr Letlape’s own exposure to relevant information during his tenure, point to a deeply rooted culture of impunity that demands comprehensive criminal scrutiny.”
Operating within the law
The GEMS said it was aware of the public statement by ActionSA and Letlape about the intention to lay criminal charges. However, it noted that it had not been formally served with any charges or related documentation, meaning it was unable to comment on the specifics of the allegations.
“GEMS firmly rejects any suggestion of fraud or corruption. The scheme operates within a lawful, strict governance and regulatory framework, including oversight by the Council for Medical Schemes. GEMS upholds the principles of ethical conduct, fair treatment and good governance in all aspects of its operations. These systems are continuously updated to prevent disparate outcomes and to improve transparency across all engagements with healthcare providers,” it said.
“Should a formal SAPS investigation be initiated, GEMS will fully cooperate through all appropriate legal and regulatory channels. We will also seek to understand the legal basis for the charges, given that GEMS has not been found to have acted with racist intent, fraudulently, or in contravention of any legislation.”
The GEMS said it welcomed the Section 59 Final Investigation Report and acknowledged the systemic concerns raised. However, it noted that the report said “GEMS was not found to have acted with racist intent”.
Dr Ron Whelan, CEO of Discovery Health, said the company had not received any information regarding the alleged complaint lodged by ActionSA and was unable to comment on it. However, he noted that Discovery Health “strongly rejects the reported findings of the Section 59 Final Report and is deeply concerned about the reliability and presentation of the analysis”.
“It is factually incorrect that the Section 59 Investigation Panel made a finding of unfair discrimination and racial profiling against Discovery Health. Neither the interim report nor the final report make this claim. The section 59 panel conducted a thorough review of Discovery Health’s forensic processes and found no evidence of unfair discrimination or racial profiling,” said Whelan.
“The panel further stated that the analysis conducted by the panel’s expert witness did not support a scientifically certain conclusion and confirmed that the report is not legally binding. The report therefore provides no basis for legal action.”
Daily Maverick approached Medscheme and its response will be added once it becomes available.
Section 59 report
The section 59 panel’s final report was handed to Minister of Health Aaron Motsoaledi on 7 July. It followed an interim report released by the panel in 2021.
The investigative panel, commissioned by the Council for Medical Schemes (CMS) and chaired by advocate Tembeka Ngcukaitobi, began looking into the matter in 2019 after healthcare providers, represented by two associations, made public allegations about their treatment by medical schemes and administrators.
According to the CMS, the inquiry focused on two issues: whether there was racial discrimination by medical schemes against black healthcare providers; and procedural fairness in the treatment of black healthcare service providers.
“We were not a court of law… We did not have to make legal findings… but what we did have the power to do was to make findings of fact, and that… simply leads to one conclusion. The evidence of the risk ratios before us showed racial discrimination against black service providers by the [medical] schemes,” said Ngcukaitobi at a press briefing marking the handover of the report on 7 July.
The risk ratios were a tool developed by the investigative panel to work out the likelihood that a black practitioner would be subjected to an investigation, finding and penalty, versus a white practitioner, according to Ngcukaitobi.
Whelan said Discovery Health was “deeply concerned that the panel’s conclusions are based on flawed methodology, unscientific assumptions and misinterpretation of complex data”.
Among the issues Discovery Health raised with the panel’s analysis were:
- The sources of the medical schemes investigations, as 78% of Discovery Health’s FWA investigations were triggered by member tip-offs based on their first-hand experiences, with only 22% driven by data analysis of claims patterns and trends;
- Alleged “statistical cherry-picking” on the part of investigators, with the omission of risk ratios showing lower risk ratio rates for black doctors in the report; and
- The surname-based race classification used by investigators, which Discovery Health said had “significant propensity for errors”.
“Discovery Health voluntarily participated in the section 59 investigation and remains committed to cooperating with any further inquiries. Additionally, all 34 complaints raised against the schemes administered by Discovery Health were assessed by the panel and found to have legitimate grounds for investigation and appropriate sanction,” said Whelan.
Representatives of medical schemes, including the Board of Healthcare Funders and the Health Funders Association (HFA), have pushed back against the findings in the report.
The HFA said that the evidence presented to the investigative panel by medical schemes showed that “many, if not all, of the healthcare practitioners that submitted complaints about racial bias to the panel were actually guilty of fraudulent activity against medical schemes”.
“The panel made no finding that these individuals should not have been investigated. Nor did it find that medical schemes acted improperly by recovering funds,” said the HFA.
“Medical schemes are legally and ethically bound to protect their members and their members’ funds against fraud, waste and abuse in healthcare.” DM