Medical schemes regulator in shock move to ditch top managers

The medical schemes regulator has taken the shock decision to terminate the services of all but three of the senior managers reporting to its CEO, it emerged on Thursday.

The hollowing out of the Council for Medical Schemes (CMS) raises questions about its capacity to oversee the R160bn industry, which provides cover to 8.9-million people, or 15.6% of the population.

The CMS is charged with overseeing the conduct of medical schemes, administrators and brokers, and also with protecting consumer interests.

Its responsibilities range from managing complaints to determining the basket of benefits that schemes must provide.

The latest development follows a series of events that rocked the regulator.

In February, it suspended its head of compliance and investigations, Stephen Mmatli, pending the conclusion of an investigation into alleged corruption.

In July, the Special Investigating Unit launched a probe into the CMS for alleged maladministration and corruption.

And in September, the CMS suspended five senior officials pending the outcome of an investigation into alleged corruption and unethical conduct, and announced that it would subject all its executives to a lifestyle audit.

Legal proceedings

It has now emerged that a sixth senior official has been suspended, and that only three of the 11-member management team that was in place in January 2019 will be at the helm at the start of the new financial year in April.

All of the affected executives have worked at the CMS for more than a decade, according to several sources, who spoke to Business Day on condition of anonymity for fear of compromising their relationship with their employer.

The CMS GM for accreditation, Danie Kolver, retires this week, while the former head of complaints and investigations, Stephen Mmatli, resigned in September.

Six other executives were informed that their contracts, which expire on March 31, will not be renewed, the CMS’s head of stakeholder relations, Grace Khoza, said on Thursday.

The decision was made by the CMS’s council. The affected executives are: CFO Daniel Lehutjo; chief information officer Jaap Kugel; and the GMs for legal services (Craig Burton Durham), financial supervision (Tebogo Maziya), benefits management (Paresh Prema), and human resources (Lindelwa Ndziba).

Business Day’s sources said that they had not been given reasons for the CMS’s decision not to renew their contracts.

Their contracts stipulate three possible grounds for nonrenewal: gross misconduct, reaching retirement age and consistently failing to perform.

Business Day understands that they have all received performance bonuses.

CMS registrar Sipho Kabane declined to answer Business Day’s questions about the rationale for not renewing their contracts, as several staff had instituted legal proceedings at the CCMA and labour court.

The three executives who retain their positions are Khoza, and the GMs for complaints and adjudication (Thembi Phaswane) and research and monitoring (Michael Willie).