Discovery Health has appealed the dismissal by the High Court in Pretoria of its application seeking to compel the Road Accident Fund (RAF) to immediately resume the processing of claims and payments to medical scheme claimants.
Discovery Health CEO Dr Ryan Noach has confirmed that it has lodged an appeal against the judgment dismissing its Section 18(3) application, adding that the appeal is set down to be heard this week.
The application was lodged after the high court declared unlawful an RAF directive that no payments must be made to claimants by the fund if their medical aid scheme has already paid for their medical expenses arising from a road accident.
There has been widespread condemnation of the RAF directive, which was issued on 12 August 2022 by the RAF’s acting chief claims officer and declared unlawful on 27 October 2022 following an urgent application by Discovery Health.
Both the high court and the Supreme Court of Appeal (SCA) have dismissed the RAF’s leave to appeal the ruling.
This led to it applying to the Constitutional Court for leave to appeal the high court judgment.
Noach said the RAF has failed to recommence claims processing for medical scheme members despite the unlawfulness of its directive, as per the high court rulings.
“Consequently, Discovery Health filed a Section 18(3) application in the urgent court to compel the RAF to resume claims processing of medical scheme members’ legitimate claims, pending the Constitutional Court considerations and judgment,” he said.
However, Noach said the High Court in Pretoria on 26 June 2023 dismissed Discovery Health’s Section 18(3) application seeking to enforce the unlawfulness of the RAF’s directive on the basis that there is an appeal pending to the Constitutional Court.
Optimistic
Noach said it is important to keep in mind that Discovery Health’s Section 18 (3) dismissal has no bearing on the fact that the RAF directive has been declared unlawful.
“The judgment from the Pretoria High Court in October 2022, which was also supported by the Supreme Court of Appeal in March this year, remains in force.
“Irrespective of the outcome of the Section 18(3) application to hasten resumption of legitimate RAF payments, we remain optimistic that the Constitutional Court will find in favour of Discovery Health.
“This would be to the benefit of all medical scheme members, to ensure fairness and equity and legal compliance in the RAF claims handling processes,” he said.
Noach added that Discovery Health has opposed the RAF’s application to the Constitutional Court and is waiting for a ruling in this regard.
Noach previously told Moneyweb that Discovery Health’s successful litigation achieved protection for members of medical schemes against discrimination by the RAF, which sought to unlawfully discriminate against medical scheme members by excluding them from RAF payments.
Read: High Court orders RAF CEO to pay legal costs ‘out of his own pocket’
The RAF was set up as a public entity to pay compensation to victims of road accidents and the medical expenses associated with treating these injuries.
It is funded by a special fuel levy on petrol and diesel, which is currently R2.18 per litre.
Loss of millions ‘not an exceptional circumstance’
In dismissing Discovery Health’s Section 18(3) application, Judge NV Khumalo said Discovery Health’s suggestion that “medical schemes are suffering irrecoverable losses of millions of rands on a daily basis” is incorrect and does not constitute an exceptional circumstance.
She said its offer for an undertaking requires the RAF to pay over to Discovery Health the monies that are payable to the member claimants so as to ring-fence the money based on the misguided and incorrect premise that medical schemes have a reimbursement claim to recover “millions of rands” from their members through the RAF, which will be negated while the appeal procedures are pursued.
“The right to compensation being enforceable by the member claimant is therefore no legal basis for payment to be made to the applicant [Discovery Health],” she said.
In addition, Judge Khumalo said the demand for the payment only for it to be ring-fenced does not make sense if any harm or hardship that is unbearable is suffered during that period.
“The applicant [Discovery Health] has failed to demonstrate sufficient degree of exceptionality that indicates any harm that is irreparable to justify the extraordinary order for the upliftment of the suspension,” she said.
Deprivation
This followed Discovery Health pointing out that medical schemes cannot direct their member claimants to refuse to settle these matters as their rules generally only impose an obligation on member claimants to include past medical expenses in their claims and to reimburse the medical scheme of any amounts recovered from the RAF.
Discovery Health further claimed that the settlement of the claim is binding and in full and final settlement of all of the RAF’s liability in respect of the accident.
It said consequently every time an unlawful tender is accepted and settled, the medical schemes are deprived of the potential to recover the past medical expenses where the medical scheme had already paid for the medical expenses.
Discovery Health said the result is the irrecoverable loss of about R500 million per year.
It added that since August 2022 the medical schemes suffered irrecoverable losses of at least R138 million because 15% of the South African population has private medical insurance.
The RAF disputed the allegation that Discovery Health conducts a business of a medical scheme and that it is entitled to the RAF’s money that is used to pay for the benefits to which the medical scheme’s member claimants are entitled in law.
It argued that Discovery Health is only an administrator of medical schemes and the money paid out is from the medical schemes and Discovery Health therefore does not suffer any harm when it makes such payments.
The RAF further claimed the medical schemes Discovery Health administers also do not suffer any loss when they pay the benefits they owe to their members and accordingly argued that no direct loss is suffered either by Discovery Health or the medical schemes.
Listen/read: Protecting assets arising from a Road Accident Fund or medical-negligence claim
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