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Discovery Health response on cover for motor vehicle accidents and claims from the Road Accident Fund

04 October 2013 Discovery Health Medical Scheme

In response to inaccurate statements being shared on social media regarding how Discovery Health Medical Scheme pays claims for motor vehicle accidents and refunds from the Road Accident Fund (RAF), we would like to provide the correct information.

Discovery Health Medical Scheme members have full cover for claims related to a motor vehicle accident

Members of the Discovery Health Medical Scheme are fully covered for injuries or any other healthcare claims that result from a motor vehicle accident or any other injury. These claims are paid in line with a member’s plan choice and the guidelines established for the Prescribed Minimum Benefits. Discovery Health settles claims as soon as they are received, including those resulting from motor vehicle accidents.

Claims paid by the RAF for healthcare expenses already paid by a medical scheme must be reimbursed to the medical scheme

If members decide to institute claims against the third parties responsible for sustained injuries, this is their own decision. Should the RAF pay out for medical expenses already paid by the Scheme, members are then required to refund these claims to the scheme. The Council for Medical Schemes has ruled unequivocally in favour of the Discovery Health Medical Scheme on this issue, concluding that the scheme is entitled to claim reimbursement of medical expenses paid in respect of RAF matters. This is in accordance with the Scheme’s rules and in terms of common law principles.

In practice, the Discovery Health Medical Scheme never forces members to institute claims against the RAF. Where the Discovery Health Medical Scheme becomes aware that a member has instituted a claim and has been paid out, the scheme will request that the member reimburses the scheme for medical expenses paid on the member’s behalf.
 
It is very difficult to determine how many Discovery Health Medical Scheme members recover costs from the RAF. At any given time, there are about 3 600 scheme members claiming from the RAF.

RAF fraud happens in some cases at the expense of medical schemes and its members

Members who claim do sometimes enrich themselves either knowingly or in some cases unintentionally. The biggest problem for Discovery Health Medical Scheme is, however, some unscrupulous attorneys who are enriching themselves at the expense of both the Discovery Health Medical Scheme and its members. The impact of "RAF-stripping”, whereby excessive legal fees are levied on members claiming from the RAF by their attorneys, can have a significant negative impact on these members, who have in many cases suffered serious motor vehicle accident injuries.

Discovery Health spends approximately R120 million annually on medical expenses on behalf of its members, for which the RAF is liable. These are only in respect of the cases we are aware of. There are also no doubt many other claims that we are unaware of, since it is in the interests of the unscrupulous attorneys referred to not to advise us of them. In addition, a substantial number of claims are not payable by the RAF due to lack of merit.

Discovery Health is assisting DHMS members to act against attorneys who are committing fraud

Discovery Health is currently assisting Discovery Health Medical Scheme members to lodge complaints with the Law Society of the Northern Provinces against attorneys who are committing fraud by overcharging their clients. We believe we have an obligation to assist and protect our members, particularly those that find themselves in a vulnerable position. We also believe we have a duty to defend the integrity of the broader structures of our society, in this case the RAF.

We have become increasingly concerned that Discovery Health members may have been subjected to excessive legal costs in respect of legitimate claims that they have against the RAF which would negatively impact both the members and the refunds due to the Discovery Health Medical Scheme.

A complaint was lodged against Ronald Bobroff & Partners

During the course of the last 24 months, information provided to Discovery Health by some of its members suggested that Ronald Bobroff and Partners may have acted to the detriment of some of its clients by, among other things, charging excessive and unlawful fees for claims lodged with the RAF. Confirming our concerns, all Ronald Bobroff’s contracts with his clients were recently declared unlawful by a full bench of North Gauteng High Court in the matter of De La Guerre against Ronald Bobroff & Partners. A copy of the judgement is attached. Ronald Bobroff was refused leave to appeal by the three judges including the Judge President who heard the case as well by the Supreme Court of Appeal. The denial of leave to appeal means that both the full bench, and the Supreme Court of Appeal, concluded that no court could reasonably come to a different decision, effectively confirming the illegality of Ronald Bobroff’s contracts.
 
The effect of this judgement is that all Ronald Bobroff clients have a potential claim against him for the difference between what he illegally charged and what would be a reasonable fee for the work actually done as determined by an independent taxing master, based on a High Court Tariff.  Given his large practice the amounts due to clients is estimated to be in the hundreds of millions of Rands.

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