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CMS suspension raises questions

20 February 2019 Myra Knoesen

The Council for Medical Schemes (CMS) recently suspended its investigations head, Stephen Mmatli, following anonymous tip-offs of corruption.

According to an article on BusinessDay, the CMS said it had served its GM for compliance and investigations, Mmatli, with a letter of precautionary suspension, pending the outcome of investigations into “serious acts of misconduct”.

“We received anonymous tip-offs alleging, among others, that Mr Mmatli has been involved in corrupt relationships with organisations regulated by the CMS. Secondly, that he has deliberately misled the council to take decisions in favour of those organisations and benefited financially in return,” the CMS said in a circular.

With CMS probing Discovery Health Medical Scheme (DHMS) and the Government Employees Medical Scheme (GEMS), as well as smaller scheme Bonitas, do the allegations against Mmatli raise questions about the legitimacy of inspections?

Some background

At a press briefing in Cape Town, in October 2018, according to an article on BusinessDay, Mmatli said an inspection into DHMS and its administrator Discovery Health had been initiated following allegations that members’ claims for Prescribed Minimum Benefits (PMB’s) were not being paid in full, in contravention of the Medical Schemes Act. The Council had also received a complaint from a pharmacy alleging it had been forced to sign an acknowledgement of debt in order to have its claims paid.

Mmatli said the inspection into GEMS was triggered by allegations that it was not paying PMB claims in full, and a sharp increase in member complaints during the course of 2017. “It may be suggestive of a governance issue,” he said. “We have also been looking at the role of the administrator are they (the complaints about non-payments) systemic, and if so, who is complicit,” he said.

Consumer complaints to the council about GEMS rose from 0.5 per 1000 beneficiaries in 2016 to 0.6 per 1000 beneficiaries in 2017, catapulting GEMS into sixth place in the top 10 offenders among restricted schemes.

Mmatli said investigations were also underway into two smaller open schemes, Resolution Health and Bonitas Medical Fund. The Council was probing allegations that Resolution’s principal officer provided loans to employees without following proper procedures, and that the scheme’s board of trustees was failing in its fiduciary duties because it its administrator Agility was not providing value for money, he said.

Bonitas was inspected following allegations that there was a lack of an arms’ length relationship with its service providers, including its administrator, Medscheme. There were also suggestions that some of its trustees had conflicts of interest, he said.

Ethical standards and governance

FAnews spoke to Grace Khoza, General Manager of Stakeholder Relations at CMS, about whether the allegations against Mmatli raise questions about the legitimacy of inspections?

“We do not know the far-reaching implications as yet, as the allegations are still to be investigated. We are certain that the findings will give light to any implications towards the industry – please note the investigations stem from a whistle-blower focusing on their own narrative that is to be investigated. We cannot pose aspersions to Mr Mmatli, as due process needs to take place (the investigations),” said Khoza.

With regards to the current status of inspections Khoza said, “Investigations at GEMS and Discovery have been completed and are following due internal process. The Bonitas’ investigation is at the process of engagement between CMS and Bonitas.”

When approached for comment the CEO of Discovery Health, Dr Jonathan Broomberg said, “We are naturally concerned at these allegations and hope that the CMS and SIU are able to complete their investigations quickly and effectively, as it is vital that all stakeholders are assured of the highest ethical standards and robust governance in the industry regulator. We are not aware of the details of the investigations and therefore cannot provide further comment on the specific questions.”

Principles of fairness 

“Inspections are a very important tool to ensure that where necessary, the regulator has sufficient powers to ensure that proper evidence is gathered, so that whatever lawful processes are then invoked are done where necessary for the protection of the members and the industry. Where inspections are however used for ulterior purposes, which is then an abuse of power, such actions should not be allowed to continue to happen,” commented Kenneth Marion, Chief Operating Officer of Bonitas. 

“However, in general, without knowing what complaints have been put before the regulator, we cannot conclusively state whether a blind eye was turned in circumstances where an intervention was necessary. In our view, any allegations pertaining to any wrongdoing within the industry must be fairly investigated. We, therefore, welcome any due process which might be followed,” said Marion. 

“In the healthcare industry, there have long been allegations of fraud which contributes to the high cost of healthcare services. Therefore, having a regulator which exercises its oversight in a fair and impartial manner is imperative to ensure that all stakeholders within the industry are held accountable, including the regulator itself. We hope that once the investigations are completed, the industry will have taken stock of itself, and ensure that it realigns itself to ensuring that it remains sustainable and motivated by principles of fairness going forward,” continued Marion. 

In his concluding comments Marion told FAnews, “We are disappointed by the report of alleged corruption within the CMS. As the regulatory body responsible for ensuring that medical schemes follow proper governance procedures and act in an ethical manner, it is regrettable that allegations of corruption have tainted this role. We await the outcome of proceedings and will continue to act against fraud, waste and abuse and ensure the best interests of our members.”

Editor’s Thoughts:
For now, we do not know what the implications will be, until the investigation is concluded. However, we have to ask, with the allegations against Mmatli of corrupt relationships with organisations regulated by the CMS and that he deliberately misled the council to take decisions in favour of those organisations, do you believe this will taint the CMS’s role? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za.

 

Comments

Added by Andrea, 20 Feb 2019
Dear Myra,

3 years ago I reported Discovery Health for non payment out of full benefit for my daughters orthodontic treatment for 24 months.

It was treated as a brush off and I got the sense that I am not heard. As a single parent I had to pay 25 k out of my savings in total for entire procedure, I felt misunderstood and hurt that the regulator could not enforce some kind of co payment from Discovery.

I then raised it with the Competition Commission health enquiry, but learnt that there process is also on hold.

Regards
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