court clips medical aid registrars wings  
10 April 2008

A long-running row between Council for Medical Schemes registrar Patrick Masobe and Genesis medical scheme has finally come to an end, after the Constitutional Court denied Masobe the right to appeal against a high court ruling compelling him to register the scheme’s rules for its benefit packages.

The decision has important implications, as it provides clarity on the scope of the registrar’s powers. It upholds the high court’s finding that the Medical Schemes Act does not give the registrar the authority to challenge decisions taken by his own council’s appeal committee, as to do so would mean he was defying the very body of which he was a functionary. Masobe had argued that the act gave the registrar administrative powers independent of the council.

The council is a statutory body that oversees medical schemes to safeguard con-sumers’ interests.

Genesis and Masobe first crossed swords in 2006, when the registrar refused to register the scheme’s rules because he believed they would discriminate against older and sicker consumers. Genesis wanted to market packages that offered extensive hospital benefits and limited cover for non-hospital events. Masobe refused to give the products the green light, saying the scheme needed to offer more comprehensive out of hospital benefits to cater for older and sicker consumers.   Genesis took up the matter with the Council for Medical Schemes’ appeal committee, which overturned Masobe’s decision. Masobe then notified the scheme that he planned to challenge the committee’s decision at an appeal board appointed by the minister of health. Genesis said he had no right to do so in terms of the Medical Schemes Act, as it would in effect mean he was challenging a decision made by his own employer.

Genesis obtained an urgent high court order in February last year declaring the registrar had no further recourse once the council’s appeal committee had made its decision. The ruling also ordered Masobe to register Genesis’s rules. Masobe then sought leave to appeal against the ruling, but was rejected, first by the high court, then by the Supreme Court of Appeal, and finally by the Constitutional Court last month.

Masobe said he accepted the Constitutional Court’s decision, and had registered Genesis’s rules. He said the legal wrangle with Genesis had focused solely on administrative issues, and he remained concerned that the scheme was systematically excluding older and less-healthy consumers.

Genesis lawyer Cassian Coquelle, a partner at Webber Wentzel, said the Constitutional Court’s decision provided much needed clarity on the powers of the registrar.
“This clips the registrar’s wings”, he said.  The ruling had implications for all decisions made by the council’s appeal board where the registrar was the appellant, as such rulings could now be set aside, he said. However, the Board of Healthcare Funders (BHF), the main industry body for medical schemes, said it was unaware of any such cases.

Tamar Kahn,  www.businessday.co.za