The Health Funders Association (HFA) has asked the National Assembly’s Standing Committee on Public Accounts (SCOPA) to direct the Road Accident Fund (RAF) to settle claims from medical schemes valued at more than R2.3 billion.
The HFA represents 20 medical schemes and three administrators, collectively covering 46% of the private healthcare market – equivalent to about 4.1 million beneficiaries.
In a statement this week, the HFA said it has made a formal submission to SCOPA about “the financial and administrative mismanagement” at the RAF.
In June, SCOPA decided to launch an inquiry into allegations of maladministration, financial mismanagement, wasteful and reckless expenditure, and related financial misconduct at the Fund.
Read: Wake-up call for RAF as SCOPA prepares for full-scale inquiry
The HFA said its submission to SCOPA focuses on two issues:
- The RAF’s directive in August 2022 to reject claims for past medical expenses if these costs have been paid by a medical scheme. The RAF’s justification for the directive is that the claimants have not suffered any financial loss and, therefore, the RAF is not obliged to reimburse them.
- The Fund’s implementation of “inadequate” medical tariffs.
Discovery Health and the RAF have been engaged in litigation over the directive, as well as two related directives issued in 2023.
In October 2022, Judge Mandla Mbongwe, sitting the High Court in Pretoria, set aside the directive and interdicted the RAF from relying on it to reject claims for the disputed medical expenses.
The Fund sought to overturn the ruling, taking the matter all the way to the Constitutional Court. In October 2023, the apex court refused the RAF’s application, stating the matter did not engage its jurisdiction.
Discovery Health then brought an application for a declarator that the RAF is in breach of Judge Mbongwe’s order. The administrator also sought a pronouncement that the RAF’s reliance on the two subsequent directives perpetuates its breach of the order.
In December last year, the Full Bench of the High Court in Pretoria ruled against Discovery. The majority decision was that Discovery misinterpreted and extended Judge Mbongwe’s judgment.
Read: Discovery to appeal ‘far-reaching’ judgment in favour of RAF
In April this year, Discovery was granted leave to appeal the Full Bench’s decision in the Supreme Court of Appeal.
Call to revoke the directives
The HFA said the RAF’s directive contravenes the RAF Act, which obliges the Fund to reimburse all reasonable medical expenses incurred as a result of motor vehicle accidents.
“Section 17 of the Act expressly states that compensation is due irrespective of any insurance benefits received by the claimant, including those from medical schemes.
“By refusing to reimburse expenses covered by medical schemes, RAF has effectively discriminated against members who contribute equally to the Fund through the fuel levy but are denied the same benefits as uninsured individuals. These actions continue to burden medical schemes and their members, forcing schemes to increase contributions and undermining affordability.”
The Association said that of the 9.1 million medical scheme beneficiaries in South Africa, 68% are black, and more than 80% of principal members earn below R37 500 a month. Nearly half earn under R16 000. These include teachers, nurses, police officers, and other public servants.
According to the HSF, more than 10 000 scheme-related RAF claims valued at more than R2.3bn remain unresolved. In addition, more than 1 000 court judgments worth R250 million remain unpaid. “These amounts, while significant to medical schemes, represent less than 2% of the RAF’s total annual expenditure,” it said.
The HSF said medical schemes generally fund treatment upfront, to ensure their members have immediate access to care while RAF claims are finalised, a process that often takes four to five years. Scheme rules allow for the recovery of such payments once the RAF pays out. It said the Fund’s continued refusal to reimburse these amounts disrupts this system and undermines the financials of medical schemes.
The HFA has called on SCOPA to direct the RAF to:
- revoke all its directives denying payment of medical expenses to medical scheme members;
- settle the 1 000 judgments and process the 10 000 unresolved claims; and
- cease its litigation related to these matters.
It said continued legal resistance by the Fund “constitutes wasteful and irregular expenditure, delays justice, and undermines public trust”.
Setting of medical tariffs
The Association said the RAF published new medical tariffs in 2022 that were set significantly below private healthcare rates and excluded many essential procedures.
“The tariffs would have covered only 60% of the treatments previously reimbursed and made it financially unviable for private facilities to treat road accident victims.”
After legal action by the National Council for Persons with Disabilities and the Law Society of South Africa, which was supported by the HFA, the High Court granted an urgent interdict in December 2022 to suspend the tariffs.
The court subsequently refused the RAF’s appeal and awarded punitive costs against the Fund, citing its late opposition and lack of disclosure in the decision-making process.
If the tariffs had been implemented, road accident victims who do not belong to a medical scheme and who rely on the public sector would have faced serious delays and barriers to recovery, the Association said.
For scheme members, the RAF’s directive combined with the low tariffs would have created a double penalty. First, through the reduced payments for treatment, and second, through the denial of claims for expenses already paid by their medical schemes.
The HFA said this approach was procedurally and substantively flawed. “It jeopardised constitutional rights to access healthcare, ignored prior court rulings, and revealed a concerning lack of consultation with healthcare stakeholders.”
The HFA recommends that any future tariff changes be preceded by robust consultation with the private healthcare sector. It said this will ensure alignment between the RAF’s obligations and healthcare realities, and avoid future litigation and legal costs, while protecting accident victims’ rights to timely and appropriate care.
