Discovery wins in dispute with RAF over medical scheme members’ claims

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The Constitutional Court yesterday declined the Road Accident Fund (RAF) leave to appeal against a judgment declaring unlawful its directive to reject claims for medical expenses where these expenses have already been paid by medical schemes, not members.

Discovery Health, the largest medical scheme administrator in South Africa, obtained the High Court judgment in October last year. Judge Mandla Mbongwe interdicted the RAF from implementing its directive issued in August 2022.

Read: RAF ordered to pay medical expense claims covered by medical schemes

The Fund attempted to appeal the decision all the way up to the Constitutional Court, but the apex court refused its application with costs. The Constitutional Court said it had concluded that the application for leave to appeal “does not engage the jurisdiction of the Court”.

The Court’s order confirms the previous rulings by the High Court and the Supreme Court of Appeal, making the decision final and binding on the RAF.

The RAF is a statutory body established to cover the medical expenses of road accident victims and is funded by a fuel levy of R2.18 per litre of petrol sold.

Discovery Health lost two High Court cases in which it attempted to obtain an order compelling the RAF to process claims from medical scheme members injured in road accidents while the Constitutional Court’s decision was pending.

Read: Discovery and RAF see latest High Court judgment differently

Dr Ryan Noach, the chief executive of Discovery Health, said the Constitutional Court’s ruling means that medical scheme members retain the right and entitlement to claim medical expenses from the RAF, in accordance with the Road Accident Fund Act, and over a century of common law precedent.

“This is an important fairness and equity principle that has prevailed and represents a victory in the public interest for all members of medical schemes in South Africa,” he said.

Discovery Health and all related parties involved in the process of claiming from the RAF will immediately ensure that valid claims submitted to the RAF are advanced, to ensure the rightful processing and settlement of these claims for members of schemes, Noach said.

Noach said the ruling has no material short-term impact on Discovery Health Medical Scheme (DHMS) or the other schemes administered by Discovery Health, but it does serve to protect members from possible higher costs in the longer term.

Discovery Health has 19 clients, including DHMS and 18 smaller restricted schemes.

It remains to be seen whether the Constitutional Court’s order will have an impact on a provision in the draft RAF Amendment Bill that proposes to exclude the Fund’s liability where an injured person’s treatment is covered by a medical scheme.

Read: RAF amendments ‘will result in higher medical scheme contributions’

Timeline of litigation between Discovery Health and the RAF

12 August 2022: The RAF’s acting chief claims officer issues an internal communiqué instructing regional managers to ensure that their teams assess claims for past medical expenses and reject the claims if a medical scheme has already paid them.

27 October 2022: Judge Mandla Mbongwe, sitting in the High Court in Pretoria, hands down a judgment declaring the RAF’s exclusion of medical scheme members unlawful. The Court interdicts the RAF from implementing its August directive.

23 January 2023: The High Court in Pretoria denies the RAF leave to appeal its October judgment.

20 February 2023: The RAF applies to the Supreme Court of Appeal (SCA) for leave to appeal.

3 March 2023: Discovery Health brings an application, in terms of section 18(3) of the Superior Courts Act, to compel the RAF to resume processing claims while the Fund’s appeal is pending.

31 March 2023: The SCA dismisses the RAF’s application for leave to appeal.

24 April 2023: The RAF applies to the Constitutional Court for leave to appeal.

26 June 2023: The High Court in Pretoria dismisses Discovery Health’s section 18(3) urgent application seeking to compel the RAF to pay claims to medical scheme members while the RAF’s application to the Constitutional Court is pending.

4 August 2023: The High Court hears Discovery’s application for leave to appeal.

22 September 2023: The High Court denies Discovery Health leave to appeal the dismissal of its section 18(3) application.

18 October 2023: The Constitutional Court refuses the RAF’s application for leave to appeal with costs.