Compensation Fund regulations fiasco intensifies

THE battle between the medical service providers (MSP) and the embattled Compensation Fund (CF) about the new regulations that may “spell the demise” of the MSP is far from over, as the CF has been forced to withdraw its notice in the Government Gazette at the last hour.

The new regulations published by the CF in the Government Gazette on September 10, 2021, mean that the CF will no longer accept nominated bank accounts of agents, including thirdparty administrators, for repayment of claims.

As of September 30, 2021, the Fund will only make payments into the bank accounts of medical service providers who provide the service to the injured worker.

However, the Injured Workers’ Action Group (IWAG) – a coalition of affected and concerned parties – are opposed to this move.

IWAG spokesperson Tim Hughes said the minister of labour, the compensation fund commissioner and chief director had not provided evidence-based, empirical, rational, justifiable reasons or benefits for Section 43(4). Nor does the Bill’s Socio-Economic Impact Assessment (SEIA) provide a cogent reason for Section 43(4).

Hughes said their objective was to advocate for the effective and efficient functioning of the CF. He said the fund was a critical component of the South African Government’s social security framework, responsible for the welfare of the country’s most vulnerable citizens. According to the Compensation for Occupational Injuries and Diseases Amendment Bill, Clause 43 will prohibit the cession of medical invoices by MSP to any financial institutions or third party administrators as collateral.

This means that medical professionals will no longer be prefunded by third party administrators, and will, if Clause 43 is promulgated, have to submit their claims directly to the CF for reimbursement.

On Wednesday, a media briefing was cancelled at the last minute because the Office of the State Attorney sent a letter to the aggrieved parties indicating that the regulations published on September 10 would be withdrawn and that the notice will be gazetted within 30 days.

This briefing was supposed to be hosted by Hughes, Dr Angelique Coetzee of the South African Medical Association (SAMA), and senior policy adviser Rona Bekker, of the National Employers’ Association of South Africa (NEASA). The communication spokesperson for the organisations, Angie Richardson, said the reason for the cancellation was in order to not undermine the process.

“We have been informed that the Office of the State Attorney has sent a letter indicating that the regulations published on September 10 will be withdrawn and that the notice will be gazetted within 30 days. This may signal some really good news for medical service providers.

“Given this, and in order not to undermine the process, we are going to postpone tomorrow’s media briefing until we have a little more clarity in this matter,” said Richardson.

“The Compensation Fund has gone rogue. In gazetting draconian, irrational, and unreasonable regulations pertaining to the CF the day after Parliament rose for recess, the minister of employment and labour has cynically abused his executive power, to avoid oversight and evade public scrutiny. By doing so, he has undermined core constitutional principles and legislative good practice. The details of the rogue regulations are simple, but their implications are wide-ranging,” said Hughes.

Hughes said: “It has long been known that the CF is chronically dysfunctional. This has recently been conceded by both the minister of employment and labour and the Auditor-General in a recent Scopa inquiry into the fund. One of the consequences of the CF’s inability to fix itself is that the doctors, private hospitals, physiotherapists and other MSPs who treat injured workers, have had to wait up to two years to be paid by the fund”.

According to Hughes, the contentious issue about the new regulations was that the MSPs will now need to register a bank account with the fund. He said the impact was that the already overburdened payment system is effectively halted, leaving MSPs out of pocket and facing a substantial new administrative burden. The multiplier effect of these regulations cannot be overstated.

“Quite simply, if they are brought into force on September 30 they will deepen the dysfunctional rot that characterises the Compensation Fund, and could well herald its final collapse, leaving the country’s most vulnerable workers unprotected.”

CF Assistant Communication and Marketing Director Themba Mdluli had not responded to enquiries by deadline.