Registrar gets go-ahead to investigate Hosmed

October 31, 2011

By Laura du Preez

An inspection of Hosmed Medical Scheme is likely to proceed after the scheme lost its appeal to prevent the Registrar of Medical Schemes from investigating its affairs.

The Council for Medical Schemes appeals committee dismissed Hosmed’s appeal and an appeal by a brokerage used by Locgov Healthcare Associates on the grounds that the registrar has the power to order an inspection if he thinks it will provide evidence of an irregularity.

In 2004, Hosmed ended its administration contract with Thebe Ya Bo Phelo, alleging non-performance. Allcare took over the contract and remained administrator until this year. This year, Hosmed again appointed Thebe Ya Bo Phelo as its administrator.

Dr Monwabisi Gantsho, the registrar, told Personal Finance he had received allegations that the tendering process Hosmed followed in appointing Thebe Ya Bo Phelo this year was flawed.

He had also received allegations that large amounts of money were rapidly being spent from the scheme’s marketing budget and that several providers had been paid half of the contracted amount for marketing material upfront despite a previous contractor failing to provide marketing material after being paid upfront.

Gantsho says he wanted inspectors to investigate these allegations and the allegations of irregular conduct relating to the Locgov brokerage.

However, when the scheme and brokerage lodged their appeals, which were heard together, the inspections were suspended.

According to the appeal committee ruling, the scheme and brokerage argued that the scope of the searches was too general and vague and, as a result, the invasive powers of the inspectors were inconsistent with the constitution.

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