Medical schemes regulator hits back

The medical schemes regulator has hit back at one of SA’s key industry associations, denying allegations by the Board of Healthcare Funders (BHF) that it has abused its power and accusing the organisation of paying media outlets to attack it.

The Council for Medical Schemes (CMS) released a 30page response to a leaked legal letter sent by the BHF on February 16 to CMS chair Thandi Mabeba and health minister Joe Phaahla, denying accusations that it had abused its power to place schemes under curatorship, wasted money on unnecessary litigation and failed to comply with the Medical Schemes Act’s requirements that it regularly review the prescribed minimum benefits.

Without providing specific examples, it is alleged in the response that concerns raised by the BHF’s members are “continuously weaponised through paid media to attack the integrity of the CMS, including its personnel”.

The CMS report, which was released on Friday afternoon, was triggered by a series of media articles published after the letter was leaked in early March. It is alleged in the letter, a copy of which was provided to

Business Day, the CMS registrar Sipho Kabane deliberately delayed the introduction of lowcost benefit options, destabilised weak schemes and used curatorship to intimidate the boards of trustees of medical schemes.

At the time, the CMS declined to comment in detail, saying its legal team needed to consider the letter.

It has now published a lengthy response, defending its use of curatorships, the establishment of an inquiry into alleged racial profiling by medical schemes and administrators, and its approach to regulatory reform. It criticises the BHF for taking its concerns to the public, saying the CMS and the courts provided ample mechanisms for resolving disputes.

The CMS had not responded by the time of publication to Business Day’s request to elaborate on its allegation that the BHF had paid media outlets.

The BHF, which represents medical schemes and administrators covering 4.5-million beneficiaries in SA, or half the local medical scheme market, rejected the CMS’s claim that it had paid media to publish material attacking the regulator, saying it was an ethical organisation.

The CMS’s report contained many false allegations, BHF MD Katlego Mothudi said. “The paidfor media assertion is such an example, as we never paid any media to run with these stories.”

The BHF said its aim was to advocate for the interests of “health citizens”, and this was why it sought to highlight issues that threatened the sustainability of the industry or had a potentially negative impact on the health sector.

The CMS accused the BHF of acting in the interests of industry players — medical schemes and administrators — rather than medical scheme beneficiaries. The CMS had a statutory obligation to protect the interests of SA’s 9-million medical scheme beneficiaries, it said.

“The CMS is therefore not surprised that the BHF would place the narrow commercial and vested interests of its members above those of the 9.04million medical scheme beneficiaries,” it said in the report.

“The CMS wishes to express its right of reply to the various falsehood perpetuated in the leaked letter by BHF. Ours is to present an unambiguous regulatory response based on empirical evidence. This is solely in the best interest of the medical schemes industry, medical schemes beneficiaries and the public,” it said.

It defended its use of curatorship, saying it had been circumspect. It was ultimately up to the courts to decide whether to grant an application from the regulator to place a scheme under curatorship, and this was done only when a credible and justifiable case had been made.

Of the 11 schemes placed under curatorship between 2012 and 2023, seven were granted on an ex parte basis, according to figures in the CMS report. An ex parte application allows the regulator to ask the court for a curatorship order without the scheme in question being given an immediate opportunity to oppose it.

While proponents of this approach argue it prevents scheme officials from destroying evidence before a scheme is placed under curatorship, critics say it deprives schemes of an opportunity to oppose being placed under curatorship.

‘CONCERNS RAISED BY THE BHF ARE WEAPONISED THROUGH PAID MEDIA TO ATTACK THE INTEGRITY OF THE CMS’