The numbers behind the Medscheme/Bonitas bombshell litigation

Afrocentric subsidiary Medscheme this week released its answering affidavit in an ongoing litigation against one of the country’s biggest medical schemes, Bonitas.

In November last year, Medscheme launched an urgent high court application for an interdict to halt Bonitas Medical Scheme’s current tender process for administration and managed care services, intensifying a long-running commercial and governance dispute.

The contracts at issue relate to South Africa’s second-largest open medical scheme, with about one million beneficiaries and roughly R20-billion in annual contributions.

Filed in the Gauteng Division of the High Court in Johannesburg, the application seeks an interim interdict to suspend the tenders until the Council for Medical Schemescompletes a forensic investigation. The hearing is set to take place in two weeks time on Tuesday, 3 March 2026.

The Council for Medical Schemes confirmed in November last year that the initial results of a Section 43 analysis showed that allegations against Bonitas warranted further investigation.

The council has since instituted a section 44 investigation with extensive powers to investigate governance, procurement and compliance failures. A section 44 investigation is an extraordinary regulatory intervention triggered only where serious governance, procurement and fiduciary failures are suspected.

Medscheme, which has been Bonitas’ administrator since 1982, argues that the tender process was fundamentally compromised and not fair or transparent. It cites allegations of manipulated bidding processes and conflicts of interest linked to prior distribution tenders under a restructuring drive known as Project StepAhead. Court papers reference claims that insiders and associated entities helped shape request-for-proposal documents that advantaged certain bidders. Evidence includes a funding commitment tied to a rival bidder, Private Health Administrators.

In his affidavit, Medscheme director Gerald van Wyk points out that implementation of the tenders awarded and under dispute is not a neutral or reversible step.

“It entails the transfer of administration, managed care functions, data systems, provider arrangements, authorisation protocols, payment flows and regulatory reporting obligations. Once these processes are live, unwinding them would be operationally complex, costly, disruptive to members and providers, and likely to prejudice third parties who are not before court.”

Van Wyk further states: “Once the new contracts are implemented, the prejudice to Bonitas and its members flowing from a fatally flawed procurement process becomes irreversible. A claim for damages cannot retroactively restore the integrity of a compromised tender process, nor can it unwind the operational disruption and instability that will result.”

The whistleblower

Van Wyk confirms that Medscheme is in possession of documents supplied by whistleblowers and reported on by journalist Michael Avery in October in Business Day, in an article titled: “Whistle-blower detonates bombshell on Bonitas”.

Medscheme attorney Brandon Starr, an associate at Werksmans Attorneys, had immediately sent the file supplied by the whistleblower to Michelle Bonthuys of FACTS Consulting, a cyber forensics and data specialist firm.

Bonitas signed a short consulting contract in late 2023 with a company called DP Investments, represented by consultant Tobie du Preez. His job was to give strategic advice to help Bonitas improve its products, grow membership, design new options and deal with service providers. He was given access to sensitive Bonitas information and was required to keep it confidential and avoid conflicts of interest. The contract was later extended to run until June 2024 under mostly the same terms.

According to whistleblower evidence in the court papers, Du Preez allegedly used Bonitas’ confidential financial and strategy information to help another company, Agile, prepare a winning bid for a Bonitas tender linked to Project StepAhead. This tender involved marketing and distribution services. Agile’s pricing and plans reportedly matched Bonitas’s internal budgets, giving it an unfair advantage.

The documents also claim Du Preez helped draft the tender documents while advising Bonitas, and that people linked to another bidder, Private Health Administrators, also helped shape the request for proposals. Despite knowing Du Preez’s links to Agile, Bonitas still awarded the tender to Agile. There are further claims that steps were taken to hide this conflict of interest by using a proxy signatory on Agile’s bid paperwork.

What are the numbers at play here?

To put the dispute in perspective, a cursory glance through the Council for Medical Scheme’s annual industry report for 2024 reveals that Bonitas had 356,713 members and paid managed care fees of R154.25 per member per month for a grand total of R55-million a month or about R660-million a year. The administration fees for 2024 worked out to roughly R91.9-million a month or about R1.1-billion for the year.

Admin fee: This is the “overhead” – what you pay for the scheme to exist, process claims, and run call centres.
Managed care: This covers programmes designed to manage chronic diseases, hospital authorisations and specialised care to ensure the scheme’s clinical outcomes are cost-effective.

Now let’s look at how Bonitas’ service provider costs hold up compared with other large medical schemes.

Considering the data above:

Efficiency vs scale: Discovery Health maintains the highest administration fee (R387.08 per member per month), yet it has one of the lower managed care costs as a percentage of relevant income (2.98%).

The self-administered edge: Bestmed stands out by being self-administered, which typically reduces external vendor overheads. It also shows the lowest managed care cost (R116.11) and the lowest percentage of relevant income (2.34%) among the four.

Managed care focus: Momentum has the highest percentage of managed care relative to its income (3.63%), suggesting a more aggressive focus on active clinical intervention or a different risk pool profile compared to its peers.

Where is the matter now?

On 29 January 2026, Bonitas announced it had awarded the contracts for administration and managed care under the July 2025 Request For Proposal (RFP) to Momentum and Private Health Administrators (PHA). Commenting at the time, Hannes Viljoen, the Chief Executive Officer of Momentum Health, said: “This deal adds more than 750,000 beneficiaries under our administration, bringing the group’s health beneficiaries in Africa to over 3,3 million and worldwide to more than 25 million.”

However, Medscheme contends that the composition of the board of trustees that adjudicated the Requests For Proposal that are a subject of CMS investigation is largely the same as the one that adjudicated the July 2025 Requests For Proposal, and so is the principal officer.

Daily Maverick reached out to Bonitas’ principal officer, Lee Callakoppen, but received no immediate response. A few hours later, a PR agency representing Bonitas sent us their media statement on the matter.

“The scheme has opposed the legal proceedings instituted by Medscheme and has filed a detailed affidavit setting out its position. Any issues raised will be addressed through the court process in the appropriate forum. The media statement issued by Afrocentric is improper as its subsidiary is currently involved in a matter which is sub judice. It is a desperate attempt that seeks to influence the regulator and the public and tarnish the reputation of the scheme in an underhanded manner.

“Bonitas remains financially sound and choses (sic) to focus on its operational transition to ensure continued stability and acting in the best interests of its members.” DM