A critical legal dispute is unfolding in South Africa’s private healthcare sector. Medscheme has filed an urgent application with the Johannesburg High Court to suspend or terminate several Requests for Proposals (RFPs) issued by Bonitas Medical Fund. Furthermore, the dispute signals deepening tensions between long-standing partners in the administration of the country’s second-largest open medical scheme.
Medscheme Bonitas Legal Battle Raises Governance Alarms
Medscheme, a subsidiary of AfroCentric Group and majority-owned by Sanlam, currently administers key operations for Bonitas. Now, it is seeking judicial relief and cites serious concerns about governance, ethical conduct, and regulatory compliance in Bonitas’ recent procurement process.
Bonitas issued RFPs in July 2024 to appoint a new scheme administrator, sparking its legal battle with Medscheme. Medscheme contends that irregularities compromised the process.
Additionally, it claims that senior Bonitas executives may have manipulated procurement frameworks for personal or political gain.
CMS Investigation Adds Pressure To Procurement Dispute
The Council for Medical Schemes (CMS), South Africa’s regulatory authority, has launched a forensic investigation into Bonitas. Whistle-blower reports triggered a probe into how the scheme transferred a lucrative Boncap contract from Medscheme to Private Health Administrators (PHA).
This contract shift ended a long-standing relationship. It also prompted accusations of backroom dealings, including the use of fronting structures and the leaking of confidential information to secure contracts.
The investigation will likely run for at least six months, further complicating the procurement environment.
Medscheme Seeks Court Intervention Over RFP Process
Medscheme’s court application aims to freeze the current RFP process until the CMS investigation concludes. The company argues that proceeding with the procurement in the current environment could entrench alleged wrongdoing. Moreover, it could violate its contractual and statutory obligations to scheme members.
Bonitas, however, is pushing back hard. It argues that the decision to reissue RFPs was financial, not political. The fund claims Medscheme failed to offer a competitive pricing model for Boncap in 2022. As a result, Bonitas considers the shift toward more cost-effective administration necessary.
Bonitas Defends Its Actions As Cost-Driven
Bonitas insisted that it handled the RFP process with “rigour and transparency”. It asserts full compliance with procurement regulations and denies any irregularities.
The scheme also noted the complex dynamic created by Medscheme’s dual role as both current service provider and bidder in the new tender round.
High Stakes For Members As Legal Clash Deepens
The stakes in the Medscheme Bonitas legal battle are high. The fund administers healthcare for millions of South Africans. A court ruling in Medscheme’s favour could delay Bonitas’ administrative restructuring for months, if not longer.
Conversely, a dismissal would allow Bonitas to proceed despite unresolved governance questions and the ongoing CMS probe.
Adding to the drama, Sanlam, a major Medscheme stakeholder, has already moved its employee healthcare cover from Bonitas to rival Fedhealth. This represents a strong sign of fractured trust between the parties.
The outcome of this legal clash could redefine expectations for governance and procurement practices across South Africa’s broader medical scheme industry.
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