Health on brink of collapse ‘due to fraud’

More than R1bn has been paid out on medico-legal claims

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Massive medico-legal claims and unsettled legal bills have brought the Eastern Cape health department to the brink of collapse.
R1.1bn worth of legal claims was paid out between 2009 and June last year.
This is an average of more than R110,000,000 a year.
“For 2017-18 [financial year] the department paid R423.396 million and R44.452 million to the state attorney,” MEC Helen Sauls-August said.
This expenditure, according to sources, is related to fraudulent claims by “rogue” lawyers who at times allegedly collude with state attorney officials to get out of court settlements.
In December, the department had a paltry R40m for goods and services. Sauls-August said: “The department has requested a R490m facility from [provincial] treasury, and the request was supported by the provincial cabinet.
“This has allowed the department to revise its cash flows with R200m [available] in January and R144.5m for February and March.”
On Wednesday the Hawks arrested attorney Zuko Nonxuba in Mthatha as part of their countrywide investigation into widespread fraudulent claims (see below).
Nonxuba was arrested on fraud charges amounting to R30m after filing allegedly bogus claims on behalf of two mothers in separate incidents.
The SIU identified three separate cases amounting to R45m. All have been handed over to the Hawks for investigation.
Sauls-August said an additional five cases were referred to SAPS and another five cases are still at inquiry stage.
To add to the department’s woes, lawyers were now attaching tits “white fleet” – vehicles used by officials – to be held until the department pays their legal fees.
Sauls-August confirmed the attachments and said the reason was that the state attorney’s office had failed to pay the lawyers’ legal fees.
Health spokesperson Lwandile Sicwetsha said 18 health vehicles had been confiscated by the sheriff of the court.
All were needed for administration.
He said: “The vehicles are confiscated to put pressure on the department to pay as directed by court order.
“When the payment is made the vehicles are returned.”
A legal practitioner who is close to the developments told the Dispatch some lawyers were making millions from medical negligence claims.
“There are defence lawyers that live purely on these claims. This is a state capture on another level because it also involves state attorney officials and we also suspect court officials. They sometimes get out-of-court settlements and dish out bribes.
“They are looting the department hence you will see them living a lavish lifestyle,” the source said.
To stem the haemorrhaging millions, the department commissioned the SIU to investigate.
At the same time, to bypass the state attorneys’ office, it brought in a private legal consortium to both defend it and investigate the claims. The department says the consortium has so far staved off 10 claims totalling R186m.
Late last year justice minister Michael Masutha paid a visit to the troubled Mthatha Master’s office, one of several offices red-flagged nationwide where the state finds itself settling a suspicious number of huge legal claims.
At the time Masutha said: “We are cleaning up the state’s legal services.
“You may be aware of the SIU investigation, which is part of the reason I am going to Mthatha tomorrow.
“There has been a lot of pressure brought to bear on some of our officials at the state attorneys’ offices.
“As the sting begins to bite, the net is closing in.”
Sauls-August said investigators raided the offices of one lawyer late last year.
Hawks national spokesperson Brigadier Hangwani Mulaudzi confirmed all the cases given to the Hawks by the health department were at an advanced stage.
“We have a number of investigations that are ongoing. There are others that are going to be finalised very soon.”
He said the elite police unit was working closely with the NPA.
Sauls-August said payments on the claims had constricted the department’s cash flow and general finances so badly that the treasury bailout would have to be “prioritised” to pay the most critically affected service providers, including SMMEs and maintenance service providers.
Law Society of SA co-chair Ettienne Barnard said “errant members of the profession” were not above the law and the public must be protected.
“We urge a speedy resolution to this matter.”
Health spokesperson Lwandile Sicwetsha said 18 health vehicles had been confiscated by sheriff of the court. All were needed for administration.
Sicwetsha said: “The vehicles are confiscated to put pressure on the department to pay as directed by court order. When the payment is made the vehicles are returned.”
A legal practitioner who is close to the developments told Dispatch some lawyers were making millions from medical negligence claims.
“There are defence lawyers that live purely on these claims. This is a state capture on another level because it also involves state attorney officials and we also suspect court officials. They some times get out-of-court settlements and dish out bribes. They are looting the department hence you will see them living a lavish lifestyle,” the source said.
To stem the haemorrhaging millions, the department commissioned the SIU to investigate.
At the same time, to bypass the state attorneys’ office, it brought in a private legal consortium to both defend it and investigate the claims. The department says the consortium has so far staved off 10 claims totalling R186m.
Late last year justice minister Michael Masutha paid a visit to the troubled Mthatha Master’s office, one of several offices red-flagged nationwide where the state finds itself settling a suspicious number of huge legal claims. At the time Masutha said: “We are cleaning up the state’s legal services. You may be aware of the SIU investigation, which is part of the reason I am going to Mthatha tomorrow. There has been a lot of pressure brought to bear on some of our officials at the state attorneys’ offices.
“As the sting begins to bite, the net is closing in.”
Sauls-August said investigators raided the offices of one lawyer late last year.
Hawks national spokesperson Brigadier Hangwani Mulaudzi confirmed all the cases given to the Hawks by the health department were at an advanced stage.
“We have a number of investigations that are ongoing. There are others that are going to be finalised very soon.”
He said the elite police unit was working closely with the NPA.
Sauls-August said payments on the claims had constricted the department’s cash flow and general finances so badly that the treasury bailout would have to be “prioritised” to pay the most critically affected service providers, including SMMEs and maintenance service providers.
Law Society of SA co-chair Ettienne Barnard said “errant members of the profession” were not above the law and the public must be protected.
“We urge a speedy resolution to this matter.”..

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