Discovery Health Medical Scheme (DHMS) has reversed its controversial decision regarding claims overpayments. The administrator will now cover the costs after sustained member outcry and mounting public pressure. This marks a significant shift in strategy. The provision protects members on the scheme's high-end plans
Impact of Discovery Health Claims Processing Errors
The issue centres on a processing mistake. This error affected members on five of the most premium DHMS plans. In early January, Discovery began notifying members about money owed. The system linked these debts to the Above Threshold Benefit (ATB) calculations.
The initial notifications frustrated members, who criticised the tone of the letters. The communication labelled the situation an "error" but avoided taking clear responsibility. Furthermore, CEO Dr Ron Whelan did not sign the letters. Instead, they came from the Chief Operating Officer. The letters also lacked dates.
These missteps increased member anger. The letters indicated that claims had been reprocessed as early as 18 December. This meant members could not adjust their plans for the new year. While many might not have downgraded, the lack of transparency caused deep dissatisfaction.
Regulatory Scrutiny and Communication Missteps
Discovery Health confirmed that the error affected 16,507 members. This represents about 0.6% of the total membership. Although the percentage is small, the financial scope is large. Early estimates suggested the liability could be R250 million. However, Discovery claims the amount is significantly less. Industry observers suggest a range between R50 million and R100 million.
Many affected members had already undergone medical procedures. They acted in the belief that their benefits were available. Discovery’s initial solution included payment plans or future deductions. Some communications even hinted at debt collection. This caused panic among the membership.
Another major point of contention was the regulator's involvement. DHMS did not notify the Council for Medical Schemes (CMS) of the error. The CMS stated it first learned of the issue through media reports. This lack of communication raised serious questions about governance and regulatory obligations.
Discovery Health Claims Costs To Be Absorbed By Scheme
A recent statement from CEO Dr Ron Whelan marked a change in tone. He addressed member concerns directly. Whelan stated that covering the overpayment costs was "the right decision." He emphasised the scheme’s commitment to fairness and integrity.
The CEO apologised unreservedly to those affected. Analysts believe an earlier apology could have prevented much of the reputational damage. By absorbing the costs, the scheme hopes to restore member confidence.
Affected members no longer face repayment demands. The scheme will now honour the overpaid amounts. This episode highlights the need for clear communication in medical scheme administration. Decisive leadership is vital when errors impact member finances.