MediCheck claims win as Discovery Health writes off up to R170m in ATB recoveries

Discovery Health has scrapped plans to recover as much as R170 million from more than 16 500 medical scheme members after sustained pressure from MediCheck, which says its intervention forced the administrator to reverse course on a controversial claims recovery process.

The reversal was confirmed on Sunday night, when Discovery Health announced it would absorb the full cost of a 2025 claims processing error instead of pursuing recoveries from affected members of Discovery Health Medical Scheme (DHMS).

Recovery demands spark dispute

MediCheck, an independent medical scheme advocacy firm, said the decision followed a week of intensive engagement after members began receiving repayment demands for overpaid Above Threshold Benefit (ATB) claims – in some cases exceeding R80 000 – for an administrative error they had not caused.

The firm, which represents more than 1 500 affected members, said it escalated the matter to the Council for Medical Schemes (CMS) after deductions and recovery notices were issued.

Mark Hyman, chief executive officer of MediCheck, said the outcome ensured members would not carry the financial burden of a system failure.

“We welcome Discovery Health’s decision to do the right thing and absorb the cost of their own error,” Hyman said. “Our members were facing significant financial pressure over an issue that was entirely outside their control, which is why we lodged the issue with the Council for Medical Schemes. This outcome ensures no member is financially prejudiced by Discovery’s systems failure.”

Discovery confirms full reversal

In a media statement issued on Sunday, Discovery Health said affected DHMS members would not be required to repay any amounts linked to the error, and that no other members of the Scheme would be disadvantaged.

The administrator said the error affected 16 507 members on certain Executive, Comprehensive and Priority plans where ATB applies – representing 10.5% of members on those plans and less than 0.6% of the Scheme’s total membership.

With Discovery Health absorbing the cost, it said neither the Scheme nor its members would be negatively impacted.

How the error occurred

According to reporting by Grobank, the problem lay in how different categories of medicine were processed during 2025. Certain medicine claims were incorrectly reimbursed at 100% of the Discovery Health Rate, regardless of applicable benefit limits.

This meant 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.

MediCheck estimates the total value of disputed recoveries at between R130 million and R170 million, based on the number of affected members and the range of recovery amounts issued.

Refunds and reinstatements

Discovery Health said claims statements for affected members would be updated to reflect the reversal.

“Any deductions made to Medical Savings Accounts, Personal Health Fund or HealthPay accounts will be reinstated, and members who have already repaid amounts will be refunded in full. A dedicated service team will contact affected members directly to address outstanding queries and provide clarity.”

Dr Ron Whelan, chief executive officer of Discovery Health, said the decision followed engagement with affected members.

“Notwithstanding the validity of the recovery, having carefully listened to members’ concerns and considered their individual experiences and circumstances, Discovery Health has decided to cover the cost on members’ behalf.”

“There is no impact on members outside this group, and benefits for 2026 across all plans remain completely unaffected,” the administrator said.

Whelan apologised to affected members, adding: “Covering this cost is the right decision, one that reflects our commitment to fairness, integrity and putting members first, especially when we fall short.”

Timeline of escalation

The reversal follows developments reported last week, when Discovery Health confirmed it had begun engaging affected members on a case-by-case basis after pharmacy claims were paid beyond ATB limits for most of 2025. At that stage, a recovery process for over-funded amounts had already begun.

Read: CMS steps in as Discovery Health begins recovering pharmacy overpayments

According to a timeline provided by MediCheck:

• 6 January: Discovery Health requested a meeting following MediCheck’s formal dispute notice and demands for substantiation.
• 7 January: MediCheck issued an urgent cease-and-desist notice as deductions began.
• 9 January: An emergency meeting was held between Hyman, MediCheck counsel Advocate Lewis Rosen and Discovery executives.
• 11 January: Discovery Health confirmed a full reversal of the recovery decision.

Regulator and governance concerns

The issue drew widespread attention after Moneyweb and News24 reported on cases involving large repayment demands, including elderly members facing debts of tens of thousands of rand.

The CMS confirmed last week that it became aware of the claims processing issue only after media reports, saying it learnt of the matter on 5 January 2026 and had not received any formal complaints at that stage. The matter was later escalated to the regulator by MediCheck.

While acknowledging that the Medical Schemes Act allows schemes to recover funds paid in error, the CMS stressed that recoveries must be clearly governed and implemented in a manner that ensures transparency, fairness and clear communication.

“Members deserve answers”

While welcoming the outcome, Hyman said the case raised serious questions about governance and administrative controls within medical schemes.

“Under the Medical Schemes Act, the Board of Trustees is responsible for ensuring proper control systems. When a systemic error of this magnitude occurs across an entire benefit year, members deserve answers about what went wrong and what safeguards are now in place,” he said.

MediCheck said it would continue monitoring the implementation of refunds and has called on the CMS to review the governance and administrative failures that allowed the error to persist.