CIMAS wins licence case
Daniel Nemukuyu Senior Court Reporter
The High Court has barred Government from cancelling CIMAS Medical Aid Society’s operating licence pending finalisation of its dispute with Corporate 24 Group of Hospitals.
Justice November Mtshiya set aside the decision by Deputy Minister of Health and Child Care Dr Aldrin Musiiwa to cancel CIMAS’ licence.
The threat of CIMAS, one of the largest medical aid societies in the country, losing its licence had caused panic and chaos among the membership but the court set the decision aside.
The two companies entered an agreement whereby CIMAS members would be treated at Corporate 24 Hospital using their valid medical aid cards and CIMAS would later pay for the services directly to the hospital.
CIMAS accused Corporate 24 of processing fraudulent medical aid claims and exaggerating the figures, a development that temporarily ended the direct payment system between the two firms.
It is claimed CIMAS reported to Government its discovery of fraudulent claims, but little action was taken by the Ministry of Health and Child Care.
Corporate 24 then made its report complaining of the unpaid bills and the termination of the direct payment system and the ministry arranged meetings with the two parties.
CIMAS wants a forensic audit of the claims first before honouring the debt.
Dr Musiiwa wrote to CIMAS giving it seven days ultimatum to comply with Government’s directive or risk losing its licence.
CIMAS through its lawyers Mr Raymond Moyo of Gill Godlonton and Gerrans and Advocate Thabani Mpofu, filed an application for review of the Government’s decision alleging bias.
The medical aid giant accused the Deputy Minister of siding with Corporate 24 and turning a blind eye on CIMAS’ fraud concerns.
In the same week, the lawyers filed an urgent chamber application barring Government from cancelling CIMAS’ licence.
On Friday High Court judge Justice November Mtshiya, granted CIMAS’ application and barred Government from cancelling the licence pending determination of the dispute between the two firms.
“Pending determination of this matter, the applicant is granted the following relief:
“The decision of the first respondent (Deputy Minister Musiiwa) to cancel the applicant’s licence be and is hereby stayed,” ruled Justice Mtshiya.
In the application filed at the High Court, Deputy Minister Musiiwa was accused of being biased in handling the dispute of the two companies.
“First respondent acted in a biased manner in that he elected not to investigate applicant’s legitimate complaints against third respondent’s conduct, which led to the dispute between applicant and third respondent, but has proceeded to vigorously pursue the resolution of the third respondent’s subsequent complaint ignoring the fact that third respondent’s complaint cannot be properly resolved without addressing applicant’s complaint against the third respondent,” reads the papers.
CIMAS’ lawyers argued that the Deputy Minister’s decision was unreasonable under the circumstances.
“First respondent’s decision to cancel applicant’s licence is unreasonable in that it effectively places the applicant in a position where it must abandon good corporate governance procedures and embark on a course of action that is not economically sound and is not in the best interest of its members, especially as it would open applicant’s business to possible fraud by unscrupulous service providers,” the papers read.
The lawyers further argued that the Deputy Minister’s decision was bad at law and a breach of CIMAS’ right to administrative justice.
CIMAS argued that it was in a very sound financial position and that cancelling its licence was unlawful.
Cancellation of a medical aid licence can only be done by the permanent secretary in the Ministry of Health and Child Care and Deputy Minister Musiiwa went off side in making the decision.
The actions of the Deputy Minister, the lawyers argued, amounted to abuse of power.
It was also argued that the actions were irrational in that they were designed to coerce CIMAS to engage in conduct that would open it up to fraudulent medical aid claims.