PSMAS faces closure over debts

PSMAS faces closure over debts
Published: 22 January 2014
ALL public sector workers - including teachers, nurses, police officers and soldiers - may go without medical aid as the government has yet to renew the operating licence for Premier Service Medical Aid Society (PSMAS).

Pensioners could also be affected by the licence hitch caused by PSMAS' accumulation of debts totalling $38 million at the end of last year, most of it owed to doctors, dentists, hospitals and other service providers for more than two months.

Most PSMAS members work for the government, either directly through the civil and uniformed services, or in parastatals, or are pensioners of the state. But the majority of its 600,000 members are outside the public sector.

Regulations governing the operations of medical aid societies say service providers must be paid within 60 days.

PSMAS insists that it is solvent, since it is owed $44 million by members.

"PSMAS has been failing to pay up service providers on time citing low remittances from members but we heard that they received a substantial amount from the government in remittances for civil servants and we don't understand why they haven't paid their dues," a source said.

PSMAS group legal and corporate secretary Cosmas Mukwezha said he was not aware that the licence would not be renewed. PSMAS was waiting for a response from the government after submitting the required paperwork last week.

He said while they owed service providers, they were also owed about $44 million by their members mostly from government parastatals and other private companies. PSMAS members on government schemes pay between $7,50 and $33 per person depending on the medical aid plan.

The lowest subscription for members on private schemes is $18 per person for the lowest plan but members could pay up to $90 per person for top plans.

"We're owed more than we owe the providers, making it difficult for us to settle claims on time," Mukwezha said.

He said the government asked them to submit particular documents like the society's constitution, audited financial accounts and membership rules, which they did.

"If they need further information, we're sure they will communicate with us," he said.

Sources said PSMAS last submitted its audited financial accounts to the Ministry of Health and Child Care in 2009.

Recently, the society made headlines after it emerged that its chief executive Cuthbert Dube was earning a monthly salary of $250,000, while his managing director, Farai Muchena, takes home $190,000.

The government has denied Harare Municipality Medical Aid Society a licence to operate after it failed to pay its dues amounting to $2 million.

HMMAS chief executive Everisto Rukasha said they were working to meet a two-week deadline given by the government to clear the debt.

"The government gave us a two-week deadline on January 8 and we're making all efforts to prove to them that we've made meaningful progress in terms of clearing the debt," he said.

Rukasha attributed his society's failure to pay up service providers on time to minimal remittances from its parent company - Harare City Council.

"We're also owed about $6 million by the Harare City Council and that impacts negatively on our reimbursements to service providers," he said.

Shelter and Kwekwe municipality medical aid societies are yet to apply for renewal of operating licences. Health and Child Care Deputy Minister Dr Paul Chimedza said the government was working with all societies to ensure that they abide by set regulations.

"We're working with them. There're a few issues that as a regulator, we want to make sure are followed whenever a licence is renewed," Dr Chimedza said.

Government sources report that 25 societies have so far been renewed to operate in 2014. The government is pushing for all medical aid companies to settle claims within the stipulated time frames so that no service provider denies treatment to a patient with a valid medical aid card.
- chronicle
Tags: PSMAS,


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