In the recent matter of Board of Healthcare Funders of Southern Africa v Council For Medical Schemes 2011 JDR 1471 (GNP), the first and second applicants approached the Court with a request to issue a declaratory order regarding the interpretation of the words “pay in full” in regulation 8(1) of the General Regulations made pursuant to the Medical Schemes Act, 131 of 1998.
The applicants contended that the Court had to decide three issues, namely:
1. The first applicant’s entitlement to institute proceedings for declaratory relief;
2. The interest and locus standi of the intervening respondents in opposing the relief sought by the applicants; and
3. The meaning of the words “pay in full” in regulation 8(1) of the General Regulations which were promulgated in terms of section 67 of the Act.
Regulation 8 has been in force since 1 January 2000. According to the applicants, the current problem came into existence on 11 November 2008 when the Appeal Board decided two cases on appeal which was referred by the Appeal Committee in terms of section 50 of the Act. The Appeal Committee and the Appeal Board had, pursuant to these two decisions, interpreted the words “pay in full” in regulation 8 to mean that the medical scheme must make full payment of a service providers’ invoice in respect of the costs of providing health care services for Prescribed Minimum Benefits without taking the rules of the medical scheme into consideration in dealing with any complaints.
It was the applicants’ contention that “pay in full” means payment according to the rules of the Medical Scheme, while according to the respondents, the decisions by the Appeal Board have not been challenged as yet and presently medical aid schemes are bound to this authority and have to pay service providers’ invoices in full.
The main complaint by the respondents was that the first applicant had no direct and substantial interest in the application as the judgment would not have an impact on it. Although the first applicant contended that it represented 75 registered medical aid schemes and therefore had locus standi, the Court found this not to be the case. This was due to the fact that the first applicant saw fit to have the second applicant, who is a registered medical aid scheme, joined. Furthermore, only 15 registered medical schemes, in the founding and supplementary founding affidavits, confirmed that a declaratory order should be sought.
The Court held that had the first applicant been so sure that it represented all 75 medical aid schemes it would not have been necessary to join the second applicant or to obtain affidavits and signatures of 15 members of the first applicant. The Court concluded from this that the first applicant did not in fact represent 75 members, but only the 15 members mentioned in the papers.
The non-joinder of all the medical schemes rendered the application fatally defective as the Court could not find that the first applicant, as a general representative of the medical schemes, would be prejudicially affected by a judgment, but found that its members may all be prejudicially affected and accordingly, all the members should have jointly instituted the application for a declaratory order.
The Court found that the first applicant did not have locus standi for the following reasons:
1. The matter was one that could be classified as a representative matter, but not all the medical schemes had been joined and it had not been launched as a representative matter due to the fact that the first applicant did not have any mandate to litigate on behalf of all 75 of its members;
2. In order to institute action in terms of Section 38 of the Constitution, a litigant needs to show that a right enshrined in the Bill of Rights has been encroached upon as well as sufficient interest in the relief sought. The first applicant did not explicitly aver any such infringement and the Court found that the First Plaintiff would not be directly influenced by the judgment and did not have a sufficient interest in the relief sought.
With regard to the second applicant the court held that it could not succeed in the application on its own, as none of the other medical aid schemes or administrators had been joined.
As a result the court dismissed the application without deciding the meaning of the words “pay in full”.