Financially distressed South African medical scheme Health Squared, whose management has taken steps to liquidate it, has been placed under provisional curatorship effective from 8 September 2022.
The curatorship order was made as some members of the Health Squared claimed that they have been left in the lurch by both Health Squared and the CMS.
The Council for Medical Schemes (CMS), the autonomous statutory body created by Parliament to regulate medical schemes in South Africa, confirmed on Friday that Judge Allyson Crutchfield has agreed to place Health Squared under provisional curatorship following a CMS application.
The CMS said it brought the curatorship application to examine the actual financial position of the scheme and oversee the liquidation process.
This follows Health Squared Medical Scheme, which has about 48 000 members and was formed in 2018 through the amalgamation of two long-standing medical aid providers, Resolution Health and Spectramed, lodging an application in the High Court in Johannesburg on 18 August 2022 in terms of Section 51 of the Medical Schemes Act (131 of 1998) for leave to apply for the voluntary winding up of the scheme in the interest of its members.
It notified its members about the planned winding up on 19 August 2022 via an SMS with a link to a Health Squared statement and a copy of its high court notice of motion related to the winding up of the scheme.
It further advised members that the voluntary winding up would be effective from 1 September 2022.
The CMS indicated it would oppose Health Squared’s liquidation application, adding that the Nephrology Society had also filed intervening affidavits to postpone the liquidation for two months.
The case stood down and thereafter an order was issued for Health Squared to continue providing cover to members who had life threatening conditions until the end of this month.
This was to address problems experienced by Health Squared members who were undergoing dialysis and other expensive life saving treatments in obtaining alternative healthcare cover.
The CMS said on Friday that the court agreed with it that a curator is a suitable remedy to address the concerns it has raised, adding that the CMS has a statutory duty to uphold the rights and interests of beneficiaries.
The council said the curator’s role and mandate are, among other things, to restore overall effective governance of the scheme while ensuring continued servicing of members and beneficiaries of the scheme.
Johannes Seoloane has been appointed curator of Health Squared.
The CMS said Seoloane is expected to take complete control of the scheme and attend to all complaints and queries from concerned beneficiaries seeking assistance with their membership.
The council added that Seoloane has extensive experience and knowledge of the healthcare industry, spanning more than 20 years.
Seoloane is a former CEO of Sanlam Health and in 2018 was appointed curator of the South African Municipal Workers Union National Medical Scheme (SAMWUMED) and last year was appointed provisional curator of KeyHealth Medical Scheme,
The CMS advised Health Squared to direct all queries, complaints and questions to Seoloane by email at [email protected]gmail.com or to phone him on 011 796 6425.
Disgruntled members of Health Squared have complained about a number of issues since the medical scheme advised them it was was to be wound up.
One member complained about problems experienced in obtaining authorisation from Health Squared for hospital admissions and procedures in the period before 31 August 2022, the date after which the scheme indicated it would not honour claims.
The member said that while Health Squared had informed members it would cover costs incurred before the end of August, it was impossible to reach the scheme on its phones to get pre-authorisation for hospital admissions and procedures.
“Consequently, medical treatment is being withheld by service providers.
“My dad is currently in hospital in need of surgery and, just to be admitted, had to pay R22 000 and they [the hospital] have refused surgery pending him getting pre-authorisation from Health Squared, which is unresponsive,” he said.
Another Health Squared member expressed concern about what would happen to the “large amount of savings” he had invested in the scheme while another asked who they could contact about issues with the chronic medication used by an elderly member of the scheme.
A further Health Squared member complained about the lack of communication from Health Squared and the CMS and how members had been left to manage the collapse of the scheme and the withdrawal of their medical aid cover on their own.
He said a certificate of membership with a resignation date from Health Squared was required by all other medical schemes before they would permit them to join the scheme.
The member said he spent an hour on hold at Health Squared just to get hold of someone in its membership department, who provided him with an email to which he could send this request.
He added that thereafter he had to send two emails to Health Squared before receiving the required certificate.
“At least now I can move forward with my own application with a new medical aid, which was already in place pending this medical aid membership certificate with a resignation date,” he said.
He confirmed he had managed to join BestMed, which has waived the three-month waiting period before accepting claims, but the waiting period would apply to a family member who had joined Discovery Health.
The member described the lack of information coming from Health Squared and the CMS as “crazy”.
“The only information we are getting is from radio interviews or the CMS press releases on its website. Basically nothing has come from Health Squared,” he said.