As Bonitas Medical Fund moves to sever a 44-year relationship with Medscheme, the scheme has assured members that a regulatory investigation will not derail the administrator change – or disrupt access to benefits.
Bonitas has acknowledged that members may experience some operational changes as the scheme moves its administration to Momentum Health from 1 June but says the process will be carefully managed.
The Council for Medical Schemes (CMS), meanwhile, has confirmed that a section 44 investigation into Bonitas has been initiated. The CMS emphasised that the investigation is focused on specific historical procurement decisions and does not, in its view, justify halting the implementation of new service-provider contracts.
The scheme said it intends to communicate timeously with members to ensure the transition is as seamless as possible. Although some “teething problems” are possible, Bonitas indicated it is confident Momentum Health has sufficient contingency plans to minimise disruption to claims processing, authorisations, provider networks, and continuity of care.
Scope of the section 44 investigation
Central to the dispute is a section 44 inspection under the Medical Schemes Act, which empowers the Registrar of Medical Schemes to order an inspection if it may provide evidence of non-compliance or for routine compliance monitoring.
Bonitas emphasised that although it will fully co-operate with the Registrar, the investigation has a defined and limited scope. It said no formal terms of reference have yet been issued and no inspector has been appointed.
According to the scheme, the inspection referred to by the CMS relates specifically to two earlier procurement processes: the 2022 agreement with Private Health Administrators (PHA) for administration and managed-care services for Bonitas’ low-cost BonCap option, and the 2024 appointment of Agile Business Solutions for marketing, sales, and distribution services.
Bonitas said the section 44 inspection “has nothing to do with the current procurement processes which have been finalised”, including the recent appointment of Momentum Health as administrator and PHA for managed care across the rest of the scheme.
At this stage, the scheme said, its engagement with the regulator has gone no further than the information already provided during the earlier section 43 inquiry. It indicated that further participation would follow once an inspector is appointed and the terms of reference are known.
Why Bonitas proceeded with the administrator change
Addressing questions about timing, Bonitas said the board could not delay appointing a new administrator simply because an investigation is under way. The administration and managed-care agreement with Medscheme Holdings ends automatically on 31 May 2026 and allowing that deadline to approach without a replacement in place would risk members’ access to benefits.
The scheme added that the procurement process began in May 2025 to allow sufficient time for a proper evaluation of bids and decision-making. Medscheme, Bonitas noted, participated in the process but was unsuccessful.
CMS: investigation under way, but narrowly focused
The CMS confirmed that a section 44 investigation into Bonitas has been initiated. However, it said the probe is confined to “specific bids which relate to the allegations that were reported” and does not encompass the scheme’s operations as a whole.
In response to whether it is appropriate for a medical scheme to proceed with major appointments before the conclusion of such an investigation, the regulator said it would be unfair to expect a scheme to wait indefinitely, particularly because investigations may take time.
The CMS confirmed that Bonitas formally notified it of the intended appointment of Momentum Health, with a letter received from the principal officer on 29 January 2026. The regulator reiterated it does not approve administrator appointments. Schemes are free to contract with any accredited administrator, provided they can demonstrate that a fair process was followed, and the board applied its mind in line with Board Notice 73 of 2004.
The CMS also stated that proceeding with the Request for Proposal (RFP) award does not, in its view, undermine the regulatory or investigative process, despite Medscheme’s attempt to secure a court interdict to prevent implementation pending the outcome of the section 44 investigation.
That said, the regulator acknowledged concerns about the potential impact of the unfolding dispute on members and the stability of the scheme, confirming the matter is being monitored, and it is engaging with Bonitas.
Litigation and industry fallout continue
The regulatory process is unfolding alongside urgent High Court litigation launched by Medscheme, which is seeking to halt the implementation of the RFP outcome. Bonitas has argued that the application has been overtaken by events, while AfroCentric, Medscheme’s parent, has indicated it will persist with the case.
Read: Bonitas’ dispute with Medscheme heads to court
In its initial media statement issued on 30 January, AfroCentric said Medscheme had approached the High Court in mid-December seeking urgent relief to halt Bonitas’ RFP process pending the outcome of the CMS’s section 44 investigation.
The application, it said, was brought against the backdrop of media reports alleging governance and procurement improprieties at Bonitas, as well as the regulator’s decision to proceed with a forensic investigation.
AfroCentric said the purpose of the litigation was to ensure that the RFP process was lawful, fair, and transparent, and decisions affecting members were properly scrutinised.
It noted that Bonitas had nevertheless proceeded to announce the outcome of the RFP and said it would respect the legal process while continuing to communicate developments through appropriate channels, emphasising its commitment to protecting the interests of members, employees, and clients.
AfroCentric declined to provide further comment beyond its earlier media statement.
The matter is due to be heard in the High Court in Johannesburg on 3 March.
