Collins Letsoalo, CEO of South Africa’s Road Accident Fund (RAF), has disclosed that the fund is owed millions of rand by various medical aid scheme service providers, including prominent player Discovery. This alarming debt raises significant concerns about the financial sustainability of the RAF and, by extension, the welfare of those relying on its services for road accident-related medical care.
During an interview with Newzroom Afrika on Tuesday, Letsoalo, who recently took aim at a prominent lawyer for amassing billions in medico-legal fees, stated that the RAF is committed to pursuing all medical aid schemes to recover the substantial sums owed. “We are very ready for them. We are going to win this case hands down. What we want to do is to claim all the money that Discovery and other medical aid schemes have been claiming from us because what they had been claiming is not supported by the law,” he said.
Letsoalo mentioned that these service providers have been “unlawfully claiming” an estimated R500 million annually from the RAF. The Road Accident Fund, which is largely financed by a levy on fuel purchases, serves as a crucial safety net for victims of road accidents. However, as debts accumulate against medical aid schemes, including Discovery, the RAF’s ability to deliver necessary services and effectively manage claims is increasingly jeopardised. This precarious situation comes at a time when calls for urgent reform of the fund are gaining momentum, with stakeholders expressing concerns about its financial management and claims settlement processes.
“The law is very clear, and we have been saying this since time immemorial. People say the RAF does not want to pay, but we want to pay valid claims. They say to their members to claim from the RAF, and once they get the money, they pay us that money and not claim themselves,” explained Letsoalo, underscoring that the RAF is legally mandated to compensate legal claimants rather than service providers.
Scrutiny has intensified regarding the RAF’s operational costs and the rising number of claims. Letsoalo also alleged that Gert Nel Inc, a prominent law firm in the sector, has received over R2.2 billion from the RAF over the past five years, indicating that attorney Gert Nel has potentially amassed a significant personal fortune through these alleged discrepancies. “You can do your calculations. For R2 billion, we know that’s close to R500 million that he has made. You are not shocked why this man fights so much. He wants to continue,” he remarked.
However, Gert Nel Inc has dismissed Letsoalo’s assertions, branding them as disingenuous. “It was really overzealous on the part of the CEO to suggest that,” Nel stated, asserting that their practice has been above board for over 23 years, acting on behalf of thousands of victims without any complaints or findings of undue processes against them.
Discovery Health’s CEO, Dr Ron Whelan, responded to Letsoalo’s statements, highlighting that the RAF’s failure to reimburse valid claims constitutes discriminatory practices against all medical scheme members. “Unfortunately, the RAF not paying claims is a discrimination against all medical scheme members who are also road users and pay the same fuel levies toward the RAF,” he said.