Supreme Court again rejects medical scheme regulator in low cost cover case

The Supreme Court of Appeal (SCA) has rejected the medical scheme regulator’s latest attempt to avoid handing over its records on low-cost benefit options (LCBO) to the Board of Healthcare Funders (BHF), one of SA’s key industry associations.

The BHF hopes the documents will reveal why the Council for Medical Schemes (CMS) took so long to finalise its position on LCBOs, which proponents say could help millions of low wage earners access primary healthcare in the private sector.

LCBOs are cheap, pared-down medical scheme options that may be offered by schemes only if they are granted an exemption to the Medical Schemes Act by the CMS.

The SCA in May dismissed the CMS’s application for reconsideration of its decision in late 2023 to dismiss its application to appeal against a high court directive to provide the documents to the BHF, saying no exceptional circumstances that would warrant a reconsideration had been presented.

The decision is part of a legal battle between the BHF and CMS that began when the association took the regulator to court in 2022 for allegedly stalling the implementation of LCBOs. The CMS began developing a regulatory framework for these products in 2015 but submitted its final report to health minister Joe Phaahla only in November 2023. The minister has sought legal opinion and set up a task team to consider the report, according to health director-general Sandile Buthelezi.

The BHF alleges the CMS refused to consider new exemption applications from medical schemes while it developed the framework yet continued to allow a closed group of health insurers to continue selling primary healthcare cover products that effectively do the same thing.

The BHF asked the court to review and set aside the CMS’s latest extension to the exemption granted to health insurers; its moratorium on medical schemes offering LCBOs; and its refusal to consider exemption applications from schemes wishing to do so, pending the finalisation of the framework.

BHF asked the CMS to provide all its records on LCBOs as part of its review application. Dissatisfied with the CMS response, which the BHF said included only documents that were already in the public domain, the association obtained a high court order in July 2023 compelling the regulator and the health minister to hand over the full record of their decisions on LCBOs.

The BHF’s legal team identified 35 documents critical to the CMS’s decision-making, including minutes of meetings and research reports, said BHF head of research Charlton Murove.

When these documents were not provided, the BHF launched contempt of court proceedings against both parties. The health minister settled with the BHF and provided the records it sought, but the CMS fought back, taking the matter all the way to the SCA. Its application for leave to appeal was heard on December 13 and dismissed with costs, as was its reconsideration application.

In line with the SCA’s latest decision, the BHF’s legal team had asked the CMS to provide the documents that it had previously requested. “Then we will know why LCBOs have not been approved, and can potentially take the decisions on review,” said Murove.

The CMS had not responded to Business Day’s questions at the time of publication.

kahnt@businesslive.co.za