CMS steps in as Discovery Health begins recovering pharmacy overpayments

Discovery Health has begun engaging affected members on a case-by-case basis after a system error led to pharmacy claims being paid beyond members’ Above Threshold Benefit (ATB) limits for most of 2025 – an issue that has now drawn the attention of the medical schemes regulator.

The error, identified in December, affected the pharmacy claims processing system of the Discovery Health Medical Scheme (DHMS) and resulted in some members receiving benefits they were not entitled to between January and December 2025.

Discovery Health told Moonstone it is working closely with impacted members to determine an appropriate recovery process for funds paid in error and to provide support where required.

The administrator said further details would be shared with affected members during January, including detailed statements and reconciliations. It added that all impacted claims have since been reprocessed so they are funded from the correct benefits – either members’ Medical Savings Accounts or the Self-Payment Gap – to ensure alignment with scheme rules and regulatory requirements. A recovery process for over-funded amounts has also begun.

According to News24, Discovery has said “only” 0.6% of members on its Executive, Comprehensive and Priority plans were affected, although it has not disclosed the absolute number of members or the total value being recovered. Discovery Health has stated that only a “small proportion” of scheme members were impacted.

The administrator said all affected claims have now been corrected, members are receiving proactive support, and stronger controls have been implemented to prevent a recurrence.

The issue has drawn widespread attention after Moneyweb and News24 reported cases involving large repayment demands, including elderly members facing debts running into tens of thousands of rand for an error they were unaware of.

Discovery Health acknowledged the potential impact on members’ finances, saying: “We recognise that unexpected adjustments can affect personal budgets and planning, and we are working closely with each affected member to manage this in the most appropriate and supportive way.”

CMS becomes aware via media reports

The Council for Medical Schemes (CMS) has confirmed that it became aware of Discovery Health Medical Scheme’s alleged medicine claims processing errors only after the matter was reported in the media.

The CMS said it learnt of the issue on 5 January 2026 and had not received any formal complaints from affected members at that stage.

The matter was subsequently escalated to the regulator by Medicheck, one of the country’s consumer health affairs bodies.

According to the CMS, Medicheck raised three concerns: allegations of systemic claims processing errors and associated recovery mechanisms; questions around compliance with Regulation 6 of the Medical Schemes Act and the applicable scheme rules; and issues relating to governance and administration oversight under section 57 of the Act and Regulation 17.

While the CMS acknowledged that the Medical Schemes Act allows recovery of funds paid to members who were not entitled to them, it emphasised that schemes are expected to clearly govern how such recoveries are implemented.

Section 59(3)(a) of the Act permits recoveries, but as a general principle, the CMS said schemes should set clear parameters to ensure transparency, fairness, courtesy, and clear communication with members. The regulator said the concerns raised would be addressed in line with its statutory mandate and processes.

What went wrong

Throughout last year, a processing fault resulted in certain medicine claims being reimbursed at levels higher than permitted under members’ plans. As a result, some members on Executive, Comprehensive and Priority options exhausted their Above Threshold Benefit (ATB) earlier than expected, with claims incorrectly funded from ATB during the year.

Moneyweb reported that Discovery Health subsequently contacted affected members to seek repayment once the error was identified. News24 further reported that the administrator has been withholding refunds for some doctors’ visits and recovering funds from members, citing its obligations under the Medical Schemes Act and the rules of the Council for Medical Schemes.

An article published by Grobank shed light on the mechanics of the error, indicating that the problem lay in how different categories of medicine were processed. Under normal circumstances, prescription medicines and over-the-counter medicines are reimbursed at varying rates depending on the plan and the type of medicine. However, during the affected period, the system incorrectly processed certain medicine claims at 100% of the Discovery Health Rate, regardless of the applicable benefit limits.

This meant that medicines that should have been reimbursed at lower percentages – or not at all – were paid in full, accelerating members’ progression to their ATB and resulting in benefits being paid beyond what their plans allowed.

Discovery Health stressed that the problem does not affect future cover.

“Importantly, members’ 2026 medical benefits and medical aid cover and access are entirely unaffected by this error, and no healthcare providers have been negatively impacted,” it said.

The administrator apologised for the incident, stating: “We deeply regret the error and inconvenience, and in keeping with fairness to all members, the affected members are not legally entitled to retain funds paid in error.”

It added that, while such incidents are very rare, it is not unprecedented for medical schemes to recover overpayments made in error.

“This is an operational matter, and the approach being taken is not unprecedented.”

Why the scheme says recovery is required

Discovery Health said the recoveries are necessary to ensure fairness and the integrity of scheme rules.

The administrator said all recoveries are being managed strictly in accordance with the Medical Schemes Act, CMS rules and DHMS Rules 15.5 and 16.4. Rule 15.5 allows the scheme to recover amounts paid in excess of what it is liable for, while Rule 16.4 provides that any benefit paid to which a member was not entitled is recoverable by the scheme.

Discovery Health said it would keep the CMS informed as the recovery process progresses.