South Africa’s second-largest open medical scheme, Bonitas, is opposing an urgent court application by Medscheme to block the appointment of two new service providers. The Bonitas Tender Dispute centres on Bonitas’ decision to end a 44-year administration relationship with Medscheme. Medscheme has served as its administrator since 1982.
Bonitas, which covers more than 730,000 people, has appointed Momentum to take over its administration services contract. It also awarded its managed care services contract to Private Health Administrators (PHA). The scheme awarded the tenders and signed the contracts on 28 January.
Medscheme, a subsidiary of JSE-listed investment group Afrocentric, says the tender process was compromised. It wants the court to interdict the awarding of the contracts pending the outcome of a probe by the Council for Medical Schemes (CMS). In addition, this probe involves alleged tender irregularities.
The Bonitas Tender Dispute Centres on “Moot” Interdict Claim
In an answering affidavit, Bonitas principal officer Lee Callakoppen argues that Medscheme’s application is now moot. He says Medscheme is seeking to halt awards that have already happened. He also claims the litigation is an abuse of process. This is because it could compel Bonitas to continue paying Medscheme for years while the CMS investigation proceeds.
Callakoppen disputes allegations that the scheme engineered the recent tenders to favour PHA. He says the committee did not exclude Medscheme and that they followed proper procurement processes, which independent auditors verified.
Callakoppen also argues Medscheme’s case relies on issues tied to older tenders from 2022 and 2024. He says these are unrelated to the 2025 tenders that awarded work to Momentum and PHA.
Why Afrocentric and Medscheme are Pushing Ahead
Despite the committee awarding the contracts, Afrocentric plans to proceed with litigation. The financial stakes are high. Afrocentric estimates that Bonitas accounts for about 40% of Medscheme’s income.
The Council For Medical Schemes probe includes concerns linked to Boncap, Bonitas’s low-income option, and a 2024 marketing and sales distribution contract. Callakoppen says Bonitas sought better pricing for Boncap. Negotiations failed, and Medscheme did not bid when the tender was issued.
The matter is set down for 3 March at the High Court in Johannesburg. The outcome will be closely watched across the managed care and medical scheme administration market. This is due to the scale of claims and the continuity risk for members.
Read the Original Article (May require a subscription)