Business Report Economy

Sanitas cuts ties with Medscheme over fees

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Durban - After a relationship spanning 24 years, Sanitas, the medical aid scheme, has parted ways with Medscheme, its administrators, amid a storm of speculation and allegations.

Marlon Pillay, the scheme`s principal officer, said last month the scheme had seen "rampant" claims` costs this year despite attempts to introduce "managed care". The scheme had remained underfunded despite members` contributions being raised by 10 percent in May, he said.

This situation was aggravated by "the large number of members` contributions which appear not to have been collected or processed", Sanitas said on Friday.

The scheme had appointed forensic auditors to investigate its financial position, and it was currently in negotiations with another leading medical scheme administrator. Medscheme officials refused to comment.

Medical aid brokers expressed surprise at the allegations levelled against Medscheme, which administers about 80 of South Africa`s approximately 150 medical aid schemes, and said there was speculation that Sanitas` claims had not been met, which had led to some doctors insisting on members paying cash.

Pillay said last month that many brokers were taking advantage of speculation about the scheme`s financial health to attempt to influence Sanitas members to join other medical aids.

"Members should seriously consider any decision they take regarding their healthcare cover, as moving members from one medical aid scheme to another is lucrative business for brokers.

"This type of activity will be rife for the rest of the year because the Medical Schemes Act, which takes effect on January 1, will severely curtail the earnings potential of these individuals and companies," said Pillay.