The high court in Pretoria has denied the Road Accident Fund (RAF) leave to appeal against its ruling in 2022 that the fund’s decision to stop paying medical schemes was unlawful.
The development has industrywide implications, giving medical schemes and their administrators the assurance that they can continue to claim from the RAF on behalf of their members.
The RAF, a statutory body that covers the medical expenses of road accident victims, is funded by a fuel levy, currently set at R2.18 for every litre of petrol sold.
Medical schemes have for decades covered the cost of their members’ hospital and medical bills, in accordance with the benefits they are due in terms of their policy, and then claimed the money back from the RAF. They were stunned last August when the RAF unilaterally decided to stop paying for medical expenses for road accident victims who belonged to medical schemes.
The RAF’s move was successfully challenged by Discovery Health, SA’s biggest medical scheme administrator, which won an urgent high court application to have the fund’s internal directive to stop paying medical schemes declared unlawful and set aside.
In a ruling handed down in October, the RAF was ordered to immediately resume payments to medical schemes for their members. The RAF’s application for leave to appeal was dismissed with costs on Monday.
“The setting aside of this unlawful directive protects members from having to pay twice for protection against medical expenses associated with road accidents — through the fuel levy and then again through their medical scheme contributions,” Discovery Health CEO Ryan Noach said.
“This ruling benefits all medical scheme members across the entire industry and is strongly in the public interest,” he said.
In a ruling handed down on Monday, judge Mandla Mbongwe said the RAF’s directive had been ultra vires (beyond its legal power) and therefore unlawful.
“Just like their members, medical schemes are entitled to be placed in the position they would be in had the motor vehicle accident not occurred. That the schemes claim through their members via subrogation should be of no concern to the RAF if the relevant invoices, and if necessary the members’ written undertaking to pay the recovered past medical expenses to the scheme, is furnished to the RAF,” he said.
Board of Healthcare Funders MD Katlego Mothudi welcomed the legal clarity provided by the high court’s decision, but said that schemes still faced extensive delays.
“We advised schemes that the challenges with the RAF will not be resolved by this judgment alone,” he said. The RAF takes up to two years to process claims from medical schemes, he said.
Update: January 24 2023
This story includes additional information and comment
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