South Africa

Gauteng health recovers more than R523m from Road Accident Fund

Gauteng health recovers more than R523m from Road Accident Fund

The Gauteng department of health has recovered more than R523m from Road Accident Fund (RAF) claims for the last three financial years.

Acting health MEC Jacob Mamabolo said after the department treated a road accident patient, it had to submit a claim to the RAF to recuperate costs incurred.

Mamabolo said: “The department has been experiencing an upward trajectory with regards to the collection of revenue, which resulted in a total collection of over R523.9m from RAF claims for the period under review.”

The department appointed Batsumi Claims Management Solutions to assist it with administering, processing and recovering claims from road accidents.

Mamabolo said due to the complex nature of the claims process, which required legal skills and investigative capacity and at times extended over multiple financial years, the department worked with Batsumi, who had extensive capacity and expertise in this area.

“The process to collect from RAF is quite involved. It requires visiting and analysing the accident scene, compiling official accident reports, statements from witnesses in case of multiple accidents, amongst others. The department has no in-house skills to do such work,” said Mamabolo.

From the R523.9m in RAF claims over the past three financial years, Batsumi was paid 18% commission, which amounted to more than R145m.

“Our ability to successfully lodge medical supplier claims has a bearing on whether we are able to sustain our services to people that fall victim to road accidents. Hence it is important that attention is paid to [this] area of work,” said Mamabolo.

Tender process 'suspicious': DA

However, the DA's Jack Bloom said Batsumi Claims Management Solutions was paid millions by the department to collect accident information.

Bloom said in a statement last week that Mamabolo had confirmed the matter in a written reply to the party’s questions in the Gauteng legislature.

“Mamabolo says that the department outsourced the collection of accident information because of its legal nature and lack of internal capacity to collect information and get accident reports from the South African Police Services (SAPS) and metro police," said Bloom.

“Batsumi has had a contract with the department since 2006, initially through an open tender, but the second award for this contract was through participation of the Free State department of health tender in terms of section 16.A6.5 of Treasury regulations.”

Bloom further said it was “suspicious that an open tender process was not followed”, even though Mamabolo argued that the contract enabled the department to meet its annual revenue targets.

He added that Batsumi’s 14-year contractual relationship with the department should have been reviewed a while back.

Cash flow challenges

Transport minister Fikile Mbalula told parliament last week that the RAF was looking to secure a “finance facility” to pay R17bn in unpaid claims – some that have been outstanding for more than five years.

He said the revenue received by the RAF from the fuel levy was insufficient to address its claims liability.

Mbalula said previously that as of March 31, the RAF's liability grew to R324bn and had claims valued at R17.2bn that had been finalised but could not be paid due to financial cash flow challenges.

Approximately 102,086 new claims were registered during 2019-2020. Mbalula said the RAF received 297,610 claims in the past three years.