Public Protector should investigate Council of Medical Schemes for alleged corruption

The DA will write to the Public Protector to ask her to investigate the Council for Medical Schemes following allegations of corruption during the merger of Liberty Health Medical Scheme and Medicover Medical Scheme at the beginning of 2010.

The DA has reason to believe that up to R65 million of ordinary South Africans’ medical contributions were used for individual self-interest which has effectively compromised the healthcare of many ordinary South Africans whose medical contributions were syphoned off- without- their knowledge to benefit a few greedy health insurance officials. If these allegations turn out to be true it will be a cruel conduct of a system that promises to take care of ill people and that they have been taken advantage of at a time when they are most vulnerable.

The Council for Medical Schemes is a statutory body tasked with the important job of regulating medical schemes. 

At the time of the merger, the Liberty Health Medical Scheme was administered by Liberty Health.

A letter in the possession of the DA shows the CEO of Liberty Health, Peter Botha, and the then acting Registrar of the Council for Medical Schemes, Patrick Matshidze, corresponding about a “condition to the merger” which will be resolved “through this settlement”.

The detail of the “settlement” is not disclosed in the letter, but any merger between medical schemes has to be done according to the prescripts of section 63 of the Medical Schemes Act, 131 of 1998.

An affidavit lodged in support of a criminal complaint related to this matter alleges that a payment of over R60 million was made by Liberty Health to Medicover Medical Scheme for Medicover’s “operating system”. However, according to the affidavit, the operating system was never used by Liberty Health to administer any medical scheme.

It is alleged that the payment was made to Medicover Medical Scheme in order to facilitate the merger.

It cannot be that the healthcare contributions and well-being of our people is used to service the greed of the very few at the helm of our medical services and the Public Protector should immediately investigate this and table a report to Parliament so we may satisfy ourselves that appropriate action will be taken against any one implicated in the alleged fraud affecting South African people.

Issued by Dr Wilmot James, DA Shadow Minister of Health, 9 November 2015