Corp24 seeks action against Cimas

Published: 15 March 2018

Corporate 24 seeks action against Cimas
THE dispute between Corporate 24 Hospital Group (Corp.24) and Cimas Medical Aid Society has taken a new twist, with Corp.24 pushing for de-registration of the country's oldest medical aid society.

The hospital group, which also runs a medical aid scheme, has also embarked on a parallel process in which it has requested Parliament to investigate government's failure to act on the group's longstanding dispute with Cimas.

Cimas, the country's biggest medical aid society by membership, has been rejecting Corp.24 claims since 2015, when external auditors claimed they had uncovered fraudulent submissions.

Cimas has insisted that Corp.24 should ask for cash payments from its members, instead of billing the medical aid.

But Corp.24 has argued that asking patients to pay cash when they have medical aid is against the law.

However, Cimas has not been paying claims, said by sources to have reached $1,5 million, from its members for services rendered by Corp.24.

In a letter to the Clerk of Parliament, Kennedy Chokuda, Corp.24 chief executive officer (CEO), Mike Joka, said the standoff was exerting financial stress on the firm, which is "on the brink of collapse".

Joka requested the Ruth Labode-led Parliamentary Portfolio Committee on Health and Child Care to summon Health Minister, David Parirenyatwa, over failure to enforce government's directive for Cimas to reverse its decision and pay Corp.24.

He wants Cimas to be summoned on the same day.

Parirenyatwa commissioned an enquiry into the dispute in 2016.

Corp.24 attends to many Cimas members every year, who make up 35 percent of medical aid transactions at the hospital, according to Corp.24 officials.

But a forensic audit had indicated that some claims from Corp.24 were fraudulent.

Documents due to be lodged with Parliament indicated that Corp.24 has continued to serve Cimas members using the medical aid, despite the fact that Cimas was not honouring claims from Corp.24.

Government has directed Cimas to honour the claims.

Its latest correspondence with Cimas over the issue was made on January 11.

In a letter to Health and Child Care permanent secretary, Gerald Gwinji on January 22, Corp.24 CEO, Joka, reminded government that its directive had been disregarded for too long, and questioned why the ministry was not "showing its teeth".

He claimed that Cimas had been throwing spanners in the works to eliminate competition from Corp.24's ambitious medical aid unit, one of the fastest growing until the dispute erupted three years ago.

"Prior to licence renewal for this year in our last correspondence we lobbied your office to conclude the matter before licence renewal to enforce compliance," Joka said.

"Unfortunately, our plea was not considered. It is now obvious that without a forced hand, Cimas is not going to comply with your directive. We plead with your office to urgently intervene on this matter in enforcing compliance on the matter of Cimas," he said.

Joka claimed that Cimas had avoided discussing the contentious forensic audit by Cape Town-based Grant Thornton, which claimed Corp.24 claims worth $27 000 were fraudulent.

"Considering that this is the second time that Cimas has defied your directive, we plead with your office to show teeth and enforce compliance to avoid the imminent dis-regulation of the sector due to the bad precedence they are setting. Cimas does not want to pay Corporate 24 for the services rendered to their bonafide members as stipulated by the law. Prior to the suspension, Corporate 24 medical aid had launched the switch campaign in early 2015, which was meant to engage members on other medical aid societies to switch from their medical aid to join Corporate 24 medical aid and get instant cover. This strategy was not taken lightly by Cimas who then decided to choke the Corporate 24 funding channel by cooking up conspiracies which, as expected, they failed to substantiate," Joka said.

In one of its correspondence with Corp.24, Cimas said it was carrying out a misinformation campaign.

"It has come to our attention that your marketing officer has been addressing members of Cimas and inviting them to seek services at your outlet on the basis that Corporate 24 is now on direct cash payment. A recent report in one of the Sunday newspapers, no doubt motivated by your institution, made a similar claim. This is not only misleading, but also contrary to the agreement reached at out meeting with honourable A Musiiwa, deputy minister of Health and Child Care," Cimas said.

Aldrin Musiiwa, who died last year, was a deputy minister of health.

In its letter to Parliament, Corp.24 said it rejected findings of a forensic audit by the Cape Town-based Grant Thornton, arguing that it violated the law.

It further argues that only the Ministry of Health was empowered to commission an audit on behalf of aggrieved parties.

Cimas has argued that it reserves the right protect its members.

"Our client has terminated that arrangement and has insisted that you must ask that its members pay cash for the services you render…you have ignored this change and you continue to see our client's members without insisting on cash upfront. Please note that our client will not honour any claims that you may present in these circumstances," Cimas lawyers, Gill, Godlonton & Gerrans (GGG), warned Corp.24.

In April 2016, Cimas chairman, Modecai Mahlangu, who is also a partner in GGG, undertook to settle the Corp.24 dispute after a meeting with the Ministry of Health.

"Those claims that do not present any difficulty will be settled…(those with) difficulties will be highlighted and will have to be resolved before further action is taken thereupon," he said.

Joka hit out at Cimas for "unfair and unlawful practices", which have seen Corp.24 losing $3,5 million in potential revenue in three years.

"I write to plead for your intervention in the matter between ourselves, Corp.24 Medical Centre and Cimas Medical Aid," Joka wrote.

"We lodged a complaint with the permanent secretary's office on the issue over the unfair and unlawful practices perpetuated by Cimas on us in June 2015. The permanent secretary's office issued two directives to Cimas to stop the unfair and unlawful practices, but unfortunately, Cimas has not complied with the directives and the regulator (the Ministry of Health) has failed to enforce the compliance. This failure by the permanent secretary's office to act timeously has made us suffer prejudices running into millions, leaving us on the brink of collapse," said Joka.

Labode has agreed to invite the warring parties to a hearing.