The long-standing relationship between Bonitas Medical Fund and Medscheme has entered a new, tense phase following Bonitas’ decision to appoint new service providers. The development coincides with regulatory scrutiny by the Council for Medical Schemes (CMS) and pending High Court proceedings involving the parties.
Bonitas last week announced it would appoint Momentum Health as its new administrator from 1 June 2026, formally severing ties with Medscheme after 44 years. The move followed what Bonitas described as extensive benchmarking and a formal request for proposal (RFP) process for administration and managed-care services, resulting in Momentum Health being selected for administration and Private Health Administrators (PHA) for managed care.
In explaining the decision, Bonitas pointed to guidance flowing from the Health Market Inquiry and the CMS, which has repeatedly warned that so-called “evergreen” contracts – long-standing arrangements between schemes and suppliers that escape regular competitive tendering – stifle competition and entrench incumbency. In 2024, the regulator singled out such contracts as a key contributor to market stagnation.
Bonitas’ principal officer, Lee Callakoppen (pictured), said the board spent the past four years interrogating how best to position the scheme for sustainability in an increasingly pressured healthcare environment. He said the board continuously tested whether its service providers were delivering value aligned with the scheme’s strategic objectives and member expectations.
“We have seen medical schemes placed under financial strain, with sustainability challenges emerging, and we remain committed to remaining relevant to our members and must therefore be vigilant in our approach,” Callakoppen said.
Section 44 inspection
Bonitas’ announcement, however, lands amid intensifying regulatory scrutiny after the CMS confirmed in November last year that it would proceed with a forensic investigation into the scheme, following matters raised during a section 43 inquiry initiated in February 2025.
While section 43 inquiries are generally viewed as preliminary, a section 44 inspection allows the regulator to subject a scheme’s books, records and governance structures to far more invasive scrutiny.
At the time, the CMS said information supplied by Bonitas warranted deeper examination, emphasising that the investigation carried no predetermined outcome and would be conducted objectively and transparently.
“The Registrar has resolved to initiate a forensic investigation to examine the full scope of the claims and to formulate appropriate recommendations,” the regulator said.
Bonitas responded by acknowledging the Registrar’s statutory powers and reiterating its commitment to full co-operation, while pushing back against the “forensic” label. The scheme said it had answered all regulatory queries and expressed confidence that the process would “put these unfounded allegations to rest”.
Read: Bonitas commits to co-operating with CMS investigation
Governance under the spotlight
Public scrutiny of Bonitas intensified following opinion pieces published in Business Day by columnist Michael Avery. In October 2024, Avery questioned certain board decisions and service-provider appointments, with a follow-up column in October 2025 renewing calls for closer regulatory oversight.
Among the issues raised were a marketing and distribution services tender awarded in 2024 to Agile Business Solutions, led by former AfroCentric executive Tobie du Preez, replacing AfroCentric Distribution Services, as well as the 2022 appointment of PHA to administer Bonitas’ low-income BonCap option (both of which now fall within the scope of the CMS probe).
At the time, Medscheme continued to administer all of Bonitas’ other options.
Bonitas has dismissed the allegations as “sensationalistic and fraught with inaccuracies” and said it had demanded a retraction and apology. None has been forthcoming.
The governance controversy has also bled into broader industry realignments. In February 2025, Moonstone reported on the effective unravelling of Sanlam’s long-standing association with Bonitas after Sanlam announced Fedhealth as its exclusive open medical scheme partner.
Read: Sanlam’s split with Bonitas paves the way for exclusive Fedhealth partnership
At the time, Sanlam emphasised that Bonitas remained a valued AfroCentric client, and service-provider appointments fell squarely within Bonitas’ governance autonomy.
The fight moves to court
The dispute has since escalated into litigation. In a statement released on 30 January, AfroCentric said Medscheme launched an urgent High Court application on 15 December 2025 seeking, among other relief, an order compelling Bonitas to suspend any ongoing RFP processes pending the outcome of the CMS’s section 44 investigation.
The application also seeks an interdict preventing Bonitas from negotiating, finalising, or implementing any RFP awards.
AfroCentric said the application was intended to ensure that the RFP process was lawful, fair, and transparent, particularly in light of media reports alleging governance and procurement improprieties and the CMS’s investigation. It noted that Bonitas had nevertheless proceeded to announce the outcome of the RFP.
According to Business Day, which reported on Bonitas’ answering affidavit deposed to by Callakoppen, the scheme argues that Medscheme’s application has been overtaken by events. The affidavit reportedly contends that the awarding of the contracts on 28 January renders the relief sought moot.
“The allegation levelled by Medscheme is that tenders 3 and 4 have been engineered by Bonitas in such a way to ensure PHA would be awarded both contracts,” the affidavit reads. “This would mean that Medscheme, on its own version, would be excluded from being considered and being appointed to render the services. That is factually incorrect.”
In the affidavit, Callakoppen is reported to accuse Medscheme of resorting to litigation to protect its position as Bonitas’ dominant service provider, noting that the scheme contributes about 40% of Medscheme’s income. He further argues that Medscheme is conflating issues by relying on what he describes as unsubstantiated claims relating to older contracts.
According to Business Day, Callakoppen claims Medscheme’s “ulterior purpose … is to delay and prevent appointments of new service providers and therefore seeks to thereby continue to reap the financial benefits emanating from its position as the existing service provider”. He also accuses Medscheme and AfroCentric of attempting to seize control of Bonitas and leverage its membership base to serve their own commercial interests.
Despite the awarding of the tenders, AfroCentric has indicated that it will press ahead with the litigation. The matter is set down for hearing in the High Court in Johannesburg on 3 March.
