From 1 June, Bonitas’s managed-care functions – the clinical and operational services that sit behind how benefits are applied and healthcare is co-ordinated – will move from Medscheme to Private Health Administrators (PHA), while Momentum Health takes over administration of the scheme.
Managed care includes services such as hospital and medicine authorisations, clinical case management, disease and utilisation management, provider network management, pharmacy benefit management, care co-ordination, and certain healthcare funding decisions that influence how members access benefits and move through the healthcare system.
Although the public focus has largely been on Bonitas ending its 44-year administration relationship with Medscheme, PHA’s appointment has attracted scrutiny in its own right.
PHA already has a relationship with Bonitas through BonCap, the scheme’s lower-cost benefit option, for which it was appointed in 2020 to provide administration and managed-care services. That appointment later became one of the issues examined as part of the Council for Medical Schemes’ section 44 investigation into procurement and governance processes at Bonitas. The investigation is ongoing. Bonitas and the regulator have previously said the current appointments of Momentum Health and PHA do not form part of that investigation.
Questions around PHA’s appointment have also formed part of the ongoing litigation between Medscheme, Bonitas, Momentum Health, and PHA, which remains unresolved pending allocation of a court date after the matter was removed from the urgent roll earlier this year.
Read: Bonitas-Medscheme court battle stalls as application removed from urgent roll
In court papers, Medscheme argued that the process leading to the appointments was flawed and questioned whether PHA had the operational capability, infrastructure, and scale to absorb a managed-care function of Bonitas’s size. Medscheme also raised concerns around procurement governance and argued implementation should be delayed until regulatory processes had progressed.
PHA rejected those allegations.
In its answering affidavit, the company said its appointment followed a concluded procurement process and argued that criticism of its capability overlooked both its existing operations and preparations undertaken for the Bonitas transition. PHA maintained it has the clinical, operational, and managed-care capability required for the role and argued that delaying implementation would create unnecessary disruption for members and the scheme.
Bonitas similarly disputed Medscheme’s claims, arguing the scheme had followed a structured procurement process across multiple workstreams, and the appointments formed part of a broader redesign of its operating model rather than a straightforward administrator replacement exercise.
It therefore came as little surprise that PHA’s presentation on 21 May focused heavily on one objective: convincing stakeholders that it has the capability, systems, and governance structures to deliver on the Bonitas mandate.
Accreditation, experience and readiness
Opening the presentation, Dr Ayanda Mbuli-Madikazi (pictured), the chief executive of PHA, confirmed that the organisation’s administrator and managed-care accreditations had recently been renewed by the CMS, framing the renewal as evidence that its governance, clinical oversight, and operating processes continue to meet regulatory requirements.
From there, the focus shifted from accreditation to operational readiness, with Thabiso Mphehlo, executive at PHA, taking stakeholders through the transition programme and implementation plan.
Mphehlo said PHA has built its transition model around three areas – people, technology, and processes – with operating procedures designed around service, operational, and outcome measures.
PHA repeatedly emphasised the experience behind the transition effort, noting that its leadership and specialist teams collectively represent 941 years of industry experience across healthcare administration, managed care, operations, and technology.
Mphehlo said PHA has used data received during the transition process to configure systems and workflows intended to support a more integrated service experience and reduce internal handovers between teams. The organisation also pointed to recent stress testing and disaster recovery exercises as part of its readiness programme ahead of implementation.
Even so, PHA repeatedly acknowledged that readiness alone would not determine whether the transition succeeds and said the real test would be whether members, providers, brokers, and employers experience improved outcomes after implementation.
Why provider contracts are changing
One of the more substantive operational changes discussed by PHA – and one that also reflects Bonitas’s broader redesign of its service-provider model – was provider contracting.
Mphehlo explained that many of the healthcare provider agreements currently supporting Bonitas were historically concluded by the incumbent administrator and managed-care provider on behalf of the scheme rather than directly between providers and Bonitas.
With the transition to new service providers, PHA said the incumbent has already communicated termination of those agreements.
PHA said Bonitas has taken the decision that future provider agreements should sit directly with the scheme and network providers rather than through outsourced service providers.
“We have decided with the scheme that it will be responsible that going forward those agreements should be entered into by the scheme, as well as the network providers, to ensure that one day when PHA is no more around, they don’t go through the same cycle again,” Mphehlo said.
For members, PHA’s message was that continuity rather than redesign remains the immediate priority.
Mphehlo said Bonitas intends retaining the current healthcare provider networks during the transition period, and members should continue to have access to existing network providers while the new contracting process is completed.
To support that approach, PHA said reimbursement arrangements would continue in line with existing agreements during the transition period to reduce the risk that members are exposed to unexpected co-payments or interruptions in access to care.
The contracting process formally started on 1 May and is expected to run until 31 August.
According to Mphehlo, contracts are being distributed through provider liaison officers to providers already participating in the network. Follow-up engagements are planned during July, with final reminders scheduled for August before the process closes. Providers that remain outstanding after that point will be engaged directly to preserve network access and minimise member disruption.
The contracting process has been phased rather than implemented as a single cutover.
Provider engagement formed a substantial part of PHA’s preparation effort.
According to PHA, provider engagement started on 15 April, followed by a review of existing provider agreements on 30 April. Formal re-contracting began on 1 May, with PHA saying more than 1 600 general practitioners had already been confirmed in-network at that stage.
PHA said the initial network loaded into the new environment included approximately 7 129 general practitioners and 4 920 specialists, with invitations issued to providers to conclude agreements under the new structure.
According to Mphehlo, provider liaison officers are engaging providers regionally between May and August, collecting signed agreements and following up directly with providers who have not completed the process.
PHA said reminder communications are scheduled for July and August ahead of the 31 August deadline.
The organisation indicated that providers who remain unsigned at that point may fall outside the network structure and non-network reimbursement arrangements may apply, although late sign-ups will continue to be processed.
Changeover and transition to go-live
PHA also provided a detailed picture of how responsibility for managed-care operations will move from Medscheme to the incoming service providers.
According to Mphehlo, the transition depends on phased data transfers governed through structured handover controls.
The first batch of data was shared on 30 April and underwent quality assurance testing before being loaded into the new environment. PHA said it expected to receive a further data batch on 22 May, followed by daily delta files from 25 May to 29 May to ensure systems remain current up to implementation.
The managed-care transition itself will happen in stages.
Pharmacy benefit management is expected to become the first operational area to transition, with responsibility transferring shortly after midnight between 26 and 27 May. Committee decisions and final operational processes currently managed by Medscheme are expected to conclude on 29 May, with PHA operations commencing immediately thereafter.
He noted that although 1 June remains the formal implementation date, parts of the transition will occur before then.
He emphasised that continuity of care remained the guiding principle throughout the cutover period and said operational capacity had been scaled beyond expected requirements, including contingency and failover capability if volumes exceed expectations.
“We know that there will be some stress testing to say, let me just check in case something happens. You are more than welcome,” he said, before adding that stakeholders should do so “considerably”.
What happens after 1 June
Although much of the discussion focused on readiness, PHA repeatedly argued that implementation itself would not determine whether the transition succeeds.
Mphehlo said the real assessment would begin after go-live and would ultimately depend on whether the transition delivers measurable value.
“What is going to be the true test of this decision is again now is there a benefit realisation that comes as a result of this decision,” he said.
According to PHA, performance will be monitored through a combination of operational service levels, financial measures, healthcare outcomes, and stakeholder feedback.
The organisation said it intends using member, provider, and broker feedback – together with escalations and operational data – to refine processes, strengthen systems and continue developing staff capability after implementation.
The service commitments presented by PHA included:
- answering 80% of calls received through the scheme’s dedicated call centre within 45 seconds;
- successfully enrolling 40% of identified high-risk beneficiaries over a six-month period;
- resolving 80% of queries within three working days and 95% within five working days;
- processing authorisations within targeted turnaround times of 80% within 24 hours, 95% within 48 hours and 99% within 72 hours; and
- ongoing engagement with healthcare provider leadership structures and monitoring through governance and assurance processes.
Closing the presentation, Mbuli-Madikazi acknowledged that readiness alone would not settle stakeholder concerns.
“PHA understands that confidence is not built through presentations, it’s built through consistent delivery, accountability, and experience,” she said.
“The real measure of success will be what the members, the providers, the employers, and the brokers experience post-go live.”
At the time of publication, the parties had provisionally secured 9 and 10 June as potential court dates for the matter, although these remain subject to confirmation and may change depending on procedural developments.
