After a wave of negative publicity, medical scheme administrator Discovery Health has reversed its controversial decision to claw back the money it accidentally paid out on behalf of thousands of medical scheme members last year.
“We apologise unreservedly to members affected by the error. Covering the cost is the right decision, one that reflects our commitment to fairness, integrity and putting members first, especially when we fall short,” Discovery Health CEO Ron Whelan said in a statement.
Discovery Health, which administers South Africa’s biggest open medical scheme, Discovery Health Medical Scheme (DHMS), mistakenly covered medicine claims for 16,507 of the scheme’s beneficiaries that in some instances ran to tens of thousands of rand. Its decision to absorb the costs of its error is not expected to have a material effect on DHMS’s financial position, as, according to Discovery Health, the total cost of the overpaid claims is about R125m, equivalent to about 0.1% of its annual claims.
Discovery Health triggered a public outcry after it sent letters to affected DHMS members late last year notifying them of its intent to recover money mistakenly paid out on their behalf. It offered different ways to settle, such as agreeing to a payment plan, deducting the money from future reimbursements for medical claims or handing over the matter over to debt collectors.
While Discovery Health’s move was in line with the provisions of the Medical Schemes Act, it triggered shock and anger among affected members, who went public with their concerns.
Section 59 (3) (a) allows the recovery of money that has been paid to a member if the individual was not entitled to the funds.
Consumer health organisation Medicheck, which has lobbied on behalf of DHMS members affected by the clawbacks, welcomed Discovery Health’s decision to absorb the cost of its error.
“Our members were facing significant financial pressure over an issue that was entirely outside their control, which is why we lodged the issue with the Council for Medical Schemes. The outcome ensures no member is financially prejudiced by Discovery’s systems failure,” said MediCheck CEO Mark Hyman. Affected members had faced recovery demands of up to R80,000, said MediCheck.
Discovery Health’s medicine claims processing error affected some DHMS beneficiaries on its executive, comprehensive and priority plans between January and December 2025. The mistake affected 10.5% of the members on the plans and less than 0.6% of its total membership.
The error centred on members’ above-threshold benefits, which kick in after they have exhausted their routine benefits. A claims processing error led to the scheme paying for some medicines and services that should have been paid for by the members.
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