In a startling revelation, Collins Letsoalo, CEO of South Africa’s Road Accident Fund (RAF), has announced that the fund is owed millions of rand by various medical aid scheme service providers, including prominent player Discovery. This alarming debt raises significant concerns about the financial sustainability of the RAF and, by extension, the welfare of those relying on its services for road accident-related medical care.
While speaking to Newzroom Afrika on Tuesday, Letsoalo who two weeks ago slammed a prominent lawyer for amassing billions in medico legal fees said RAF will be going after all the medical aids schemes in a bid to recover all the money owed to it.
According to Letsoalo these service providers have been "unlawfully claiming" from RAF said to be just over R500 million a year.
The Road Accident Fund, funded by a levy on fuel purchases, serves as the safety net for victims of road accidents, providing crucial compensation and medical care. However, the accumulating debts from medical aid schemes threaten to undermine its operations, leaving many without vital support during their time of need.
Letsoalo's comments come in the wake of calls for urgent reform within the RAF, which has faced scrutiny over its financial management and claims settlement processes in recent years. Stakeholders are now questioning the viability of the fund, considering the rising operational costs and the growing number of claims. With the added burden of non-repayment by schemes such as Discovery, the RAF’s ability to provide comprehensive services and manage claims effectively is increasingly under threat.
Letsoalo indicated also that the South African laws do not support the claims the medical aid schemes have been submitting.
“We are very ready for them. We are going to win this case hands down. What we want to do is to claim all the monies that Discovery and other medical Aid schemes have been claiming from us because what they had been claiming is not supported by the law. In that regard, we are going to be making the calculations.
Letsoalo indicated that RAF is legally mandated to pay legal claimants and not service providers.
“The law is very clear and we have been saying this since time immemorial. People say RAF does not want to pay but we want to pay valid claims which is why they saying to their members claim from RAF and once they get the money they pay us that money and not claim themselves,’ he added.
Letsoalo claimed that Gert Nel Inc., a prominent law firm in the sphere has received over R2.2 billion from the RAF over the past five years, suggesting that Gert Nel has amassed a significant personal fortune through these alleged irregularities.
“Over the past period of five years, Gert Nel Attorneys has been paid over R2.2 billion from the RAF. You can therefore do your calculation of how much that is as part of the 25%. For R2 billion, we know that is close to R500 million that he has made. You are not shocked why this man fights so much. He wants to continue,” Letsoalo stated.
However, the law firm, through Nel slammed Letsoalo saying: “It was disingenuous of Mr Letsoalo to have gone on a public platform, as everything has happened over 23 years, having acted on behalf of thousands of victims.
“The fact that we are still in practice without any complaints and findings of undue processes on our side should tell you that what we are doing is above board and that we are administering the contingency fees act to the letter of the law. It was really overzealous on the part of the CEO to suggest that,” Nel stated.
Responding to Letsoalo’s accusations, Discovery Health CEO, Dr Ron Whelan, said it was unfortunate that RAF’s failure to pay claims is a clear discriminatory practice.
“ Unfortunately, the RAF not paying claims is a discrimination against all medical scheme members (not just those of Discovery Health Medical Scheme) who are also road users and who pay the same fuel levies towards the RAF as all other road users. Discovery Health’s legal action has sought to ensure that all valid claims of all medical scheme members in South Africa injured in road traffic accidents are paid in accordance with the Road Accident Fund Act,” Dr Whelan said.
Furthermore, Whelan said the medical aids fund has noted with concern the judgment handed down by the Gauteng High Court in the matter of Discovery Health versus the Road Accident Fund.
This week, Discovery suffered a blow at the Gauteng High Court, having its case to force the Road Accident Fund (RAF) to reimburse it for claims dismissed.The ruling was handed down by the North Gauteng High Court, with a dissenting judgement included.
“Discovery Health respectfully disagrees with the judgment delivered by Mlambo JP and Bam J and aligns with the dissenting judgment by Opperman J. Given the far-reaching implications of the judgment, Discovery Health intends to apply for leave to appeal and believes the matter warrants the attention of the Supreme Court of Appeal,” he added.
The Star