Pretoria - The directive by the Road Accident Fund (RAF) not to pay for past hospital and medical claims issued by members of medical aid schemes has been declared unlawful.
In his ruling, Gauteng High Court, Pretoria Judge Mandla Mbongwe was highly critical of the fact that the RAF had issued the directive against the legislation, and because it was done without consulting any of the stakeholders or the public.
The order followed an urgent application by Discovery Health after the RAF issued a directive that it would make no payments to claimants if their medical aid scheme had already paid for (claims) arising from a vehicle accident.
Discovery argued that medical aid schemes would be out of pocket if the new directive to reject claims for past medical expenses already paid was implemented.
Discovery Health argued that not only did the RAF Act not allow the entity to refuse paying for the medical expenses which a road accident victim had already incurred, but such a decision would have dire financial consequences for each medical aid scheme in the country.
Discovery said in court papers it estimated that this loss to medical schemes could be in the region of R500 million a year. It said this might result in them increasing the monthly premiums payable by their members.
The RAF, on the other hand, argued that there was no obligation on it to reimburse claimants who claimed their expenses from their medical aid schemes.
Judge Mbongwe said the RAF Act did not provide for the exclusion of benefits the victim of a vehicle accident had received from a private medical aid scheme for past medical expenses.
The legal position was that the RAF could not free itself of the obligation to pay full compensation to victims of motor vehicle accidents. Thus, the challenged directive fell outside the authority of the RAF, the judge said.
“The social security protection the RAF provides is in no way intended to impoverish medical schemes, which, were the directive to stand, would face a one direction downwards business trajectory as a result of their members becoming victims of vehicle accidents,” the judge said.
He added that the levy paid on fuel provided the funds for payment of compensation, and nothing in law obliged medical schemes to contribute towards such compensation.
The judge commented that medical aid schemes provided its members with invoices to include in their claims. If this was no longer allowed, it would mean that medical schemes would have to institute their claims against the RAF. This duplication would result in wasteful expenditure, he said.
“There can be no doubt that the issuing of the directive amounts to an unlawful abrogation of the fund’s statutory obligations in terms of the RAF Act.” The judge added that not only was this a flagrant disregard for the law, but also a ‘hopeless undermining’ of the provisions of the Constitution, “which seeks lawfulness, justice and fairness”.
The judge found the matter was indeed urgent, as it had grave consequences for medical aids and the public if the directive remained in place.
He said it was concerning that the RAF saw fit not to give notice of its intention to issue the directive, and not to invite comments on this crucial issue. “It chose to go rogue and arbitrary,” the judge said.
He said the “absurd outcome” of the directive would mean that the public would first have to settle their medical claims before they could lodge a claim with the RAF.
The judge subsequently interdicted the RAF from implementing the directive.
Pretoria News