Court sides with Discovery Health in bid to stop RAF ‘going rogue’

Discovery Health took on the Road Accident Fund (RAF) for its unilateral decision in August to illegally exclude medical scheme members from RAF payments — and won.

On Thursday the Pretoria high court released a judgment confirming Discovery Health, which administers and manages 40% of the medical scheme market, was successful in its bid to prevent the RAF from rejecting motor vehicle accident victims’ medical claims if a medical scheme had paid for the expenses in question.

On August 12, the RAF’s acting chief claims officer, Maria Rambauli, issued an internal directive to RAF managers instructing them to stop processing and payment of all past hospital and medical expense claims from medical scheme members with immediate effect.

“This directive was immediately implemented, resulting in a sudden and immediate cessation in settlements of all medical claims submitted by attorneys on behalf of medical schemes members for the reimbursement of accident-related medical expenses,” Discovery said on Thursday night.

“In simple terms, the RAF began rejecting valid medical claims submitted by people who are members of any medical scheme.”

This was done without consulting or notifying medical schemes, their members or attorneys.

Despite its “extensive” attempt to engage the RAF about its decision, “Discovery Health did not receive any response from senior leadership at the RAF”, the scheme said.

“Consequently, Discovery Health, on behalf of its administered client medical schemes and in the public interest, had no alternative but to launch an urgent application in the Pretoria high court against the RAF and transport minister, seeking to interdict the RAF from implementing its directive.”

Judge Mandla Mbongwe agreed. “Discovery Health’s approach to the court could not be more justified and, in fact, coerced by the RAF’s directive,” he said.

“The RAF chose to go rogue and arbitrary, without any consideration of the social benefit the [RAF] act is intended to serve and the requisite consultative public engagement of all stakeholders such as the schemes which alleviate the plight of motor vehicle accident victims.”

His strongly worded judgment states that the RAF is interdicted and restrained from implementing the directive.

“We acknowledge this is an important victory for members of all medical schemes who have equal rights to benefit from the RAF support and who all make the same, significant fuel levy contributions,” Discovery Health CEO Dr Ryan Noach said after the ruling.

Thanks to this judgment, it is back to “normal”, he said.

After paying members’ healthcare claims for road accident-related injuries, medical schemes submit the medical claim expenses as part of their members’ claims to the RAF. When the RAF settles the medical claims, it pays the money to the medical schemes where, as Noach said, “it serves to reduce medical inflation and protect members from higher medical scheme contribution increases”.

What the RAF sought to do would have meant medical schemes suffered significant and unplanned loss of income, Discovery Health argued. Had the court not stopped the RAF from carrying out its plan, medical schemes may have resorted to excluding claims for medical expenses arising from car accidents. That would have entitled RAF claimants to claim for their past medical expenses from the fund, Discovery said.

“But this [would have] undermined the very purpose of the schemes, as members would have been forced to pay for their medical costs upfront, and claim from the RAF later.”

The RAF is compelled to provide cover and compensate people who suffer damages as a result of a road accident within SA’s borders. It is a form of compulsory social insurance, funded by a fuel levy of R2.18/l of petrol paid by every motorist in the country, including all members of medical schemes who purchase fuel.

Discovery Health and its administered medical schemes had slammed the RAF’s move as “discriminatory in the highest order”, given that medical scheme members pay the same fuel levies as all other road users, and have equal rights in law to RAF compensation.

The act also protects those who cause road accidents from being sued for damages because the RAF assumes the wrongdoer’s liability to the victim.

“Who otherwise would be liable for the victim’s medical expenses or, where relevant, be liable to reimburse the individual’s medical scheme for those incurred medical expenses?” Discovery Health asked.

“We’re satisfied with the Pretoria high court’s judgment, which is in the public interest, and we are pleased our interdict was able to bring a sense of normality back to the RAF medical claims process,” Noach said.

TimesLIVE