RAF won’t budge despite losing ConCourt leave to appeal high court ruling on medical scheme claims

Discovery Health took the Road Accident Fund (RAF) to court to declare as unlawful the RAF’s directive issued in August to exclude medical scheme members’ claims, and for the RAF to resume the processing of members’ road accident-related claims. 

Discovery Health won the case. This week, the RAF’s application for leave to appeal to the Constitutional Court was refused, with a full costs order awarded to Discovery Health.

The RAF directive, issued just over a year ago, instructed its various claims offices to stop processing medical scheme members’ claims. 

“This constituted clear discrimination against medical scheme members who are road users and pay the same fuel levies towards the RAF as all other road users,” says Dr Ryan Noach, chief executive of medical scheme administrator Discovery Health.

A quick look at the RAF’s financial records makes it clear why management is desperate to cut costs wherever it can. 

The RAF recorded a deficit of R8.43-billion for the 2022/23 financial year, compared with a surplus of R428-million the previous year. However, the fund maintains that this was largely due to not seeing an increase in the fuel levy over the past two years, against a backdrop of an average 6.9% increase in inflation during 2022/23. The deficit was also impacted by the increase in claims liability when compared with the previous year.

Chief executive of the RAF, Collins Letsoalo, told Daily Maverick the ConCourt decision has “no implications” for the fund as it did not deal with the merits of the case, but merely raised issues of a lack of jurisdiction.

“The RAF issued an internal directive on the 12th of April 2023 stating its legal position about prescribed minimum benefits and emergency medical conditions, and how those claims should be processed. That directive has neither been challenged nor set aside and thus still applies,” he says.

Letsoalo was unable to tell Daily Maverick how many RAF claims from medical scheme members had been stalled since August 2022, but confirmed that those claims would not be processed immediately.

“Our position has always been that we will not pay for prescribed minimum benefits and emergency medical conditions, as prescribed by the Medical Schemes Act. Each case will be reviewed based on its merit,” he says.

According to Letsoalo, the Gauteng Division of the High Court in Johannesburg ruling on 22 September 2023 stated: “Neither Discovery nor the medical schemes it represents have a right to directly claim from the fund, right to compensation being that of the member claimants as the road accident victims.”

However, Discovery contends that the ConCourt ruling means that medical scheme members retain the right and entitlement to claim medical expenses from the RAF, in accordance with the Road Accident Fund Act, and a century of common law precedent.

Noach says although the ruling has no short-term impact on the Discovery Health Medical Scheme or other schemes administered by Discovery Health, it does serve to protect members from possible higher costs in the longer term.

“Discovery Health and all related parties involved in the process of claiming from the RAF will immediately ensure that the valid claims submitted to the RAF are advanced, to ensure the rightful processing and settlement of these claims for members of schemes,” he says. DM

Timeline of the legal battle