Discovery Health has suffered a setback in its legal wrangle with the Road Accident Fund (RAF) over medical schemes’ right to claim reimbursements for past medical expenses from the fund.
The North Gauteng High Court on Friday rejected Discovery’s leave to appeal against a June judgment that the RAF could not be compelled to immediately process medical scheme members’ legitimate claims until the Constitutional Court decides on the dispute between the parties.
“Discovery has been found to have failed to prove on a balance of probabilities an irreparable loss occasioned by the suspension of the order. Consequently, the argument on the harm being irreparable and the order of final effect refutable. There is therefore no measure of certainty that another court would arrive at a different conclusion,” judge Nomsa Khumalo said.
Medical schemes have historically submitted claims to the RAF after footing the bill for members injured in road accidents.
However, the RAF shocked the establishment in August when it announced that it would no longer pay for past hospital and medical claims issued by members of medical aid schemes.
Angered by the directive, Discovery dragged the RAF to court. In October, the court interdicted the RAF from implementing an internal directive to reject all claims for medical expenses where these expenses were paid by medical schemes, not by the claimants.
The RAF then approached the Supreme Court of Appeal for leave to appeal. However, the country’s second-highest court dismissed its application for lack of a prospect of success.
The RAF has since approached the Constitutional Court for recourse. Discovery, which claimed medical aids are losing R2m a day due to the RAF’s directive, went back to the high court seeking an order forcing the fund to immediately resume payments until the apex court decides on its appeal.
Khumalo also ruled against Discovery in the matter, leading to its appeal — on which she has now poured cold water.
Both Khumalo’s judgments did not touch on the merits of the matter as that would be decided on by the apex court in due course. That outcome will have an enormous bearing on some of the changes proposed in the draft RAF amendment bill currently out for public comment, particularly as it relates to medical aid members, whichever way the Constitutional Court rules.
The RAF in a statement welcomed Khumalo’s dismissal of Discovery leave to appeal.
“The fund continues to call for the protection of medical scheme members against abuse and being put under duress and undue influence. The contributions of the medical schemes could never have been determined with this false premise that medical schemes have a right to coerce its members to claim from social security funds,” the RAF said.
“The termination of membership for ‘not co-operating’ with an underhanded scheme of arrangements to claim from the fund and pay over to the medical schemes what is a social benefit is patently unethical and unconstitutional.”
If the amendment bill is passed in its current form, it will do away with reimbursement of expenses covered by medical aid/insurance.
Another proposed amendment is the banning of compensation for any person who is not a SA citizen or a permanent resident. The bill also proposes that all future medical claims will have to be pre-authorised by the RAF or they will not be paid.
Kirstie Haslam, partner at DSC Attorneys, said that there is likely to be widespread opposition to the bill’s introduction from a wide array of civil society interest groups.
“The bill seeks to treat the symptom and not the cause. The RAF is largely the author of its own misfortune by virtue of systemic administrative incompetence,” Haslam said.
“A significant part of the problem is the volume of claims, which is directly attributable to our unacceptably high collision rate, which is in turn in significant part due to inadequate enforcement of traffic laws.”
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