You were in a motor vehicle accident and your medical aid scheme covered your medical costs. On advice of your attorney you also submitted a claim to the Road Accident Fund (RAF) for your medical expenses. The RAF indicated it was prepared to pay out your claim but now your medical scheme insists that the medical costs it paid be recovered from the amounts paid out by the RAF. Is this correct and must you pay back your medical insurer for your medical costs?

The Medical Schemes Act 131 of 1998 provides that each medical scheme shall, in the case where a claim has been submitted, subject to the rules of that medical scheme, pay to a member or a supplier of a service any legitimate claim or benefit legally owing to that member or supplier, within 30 days after the day on which the claim in respect of such benefit was received by the medical scheme.

Medical schemes are accordingly not allowed to evade the obligation the scheme has towards a member who was in an accident, irrespective of who was at fault. In the same vein, a medical scheme cannot for instance withhold its pre-authorisation subject to the outcome of a member’s third party claim lodged with the RAF.

However in terms of our law of insurance the medical scheme can ask you to recover costs on their behalf and submit a claim to the RAF. If a member’s medical expenses are covered by the medical scheme and the member receives additional compensation from the RAF to cover the same medical costs, this would result in a double benefit to the member, leaving them enriched. This means that if the RAF compensates the member for its medical costs, the member has to pay the amount received for medical costs back to the scheme to prevent unjustified enrichment by the member, who would otherwise receive double benefit for the same event.

It’s important to note thought, that payments received from the RAF can consist of different portions – some amounts are allocated to medical expenses, others paid as compensation for loss of income and/or pain and suffering (depending on the circumstances of each specific claim). The member will only be responsible to pay back to the medical scheme amounts received from the RAF specifically for medical expenses. Payment received for loss of income or pain and suffering will not have to be paid to the medical scheme, irrespective of whether the amount the RAF pays out for medical expenses is less than that covered by the medical scheme.