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COIDA Amendment Bill's ban on cessions will deepen Compensation Fund dysfunctionality

COIDA Amendment Bill's ban on cessions will deepen Compensation Fund dysfunctionality

The National Employers' Association of South Africa (NEASA), representing thousands of businesses and well over 300 000 employees, warned Parliament’s Portfolio Committee on Employment and Labour, that the inclusion of Section 43 of the COID Amendment Bill (The Amendment Bill) will exacerbate the Compensation Fund’s inability to function.

NEASA says Parliament must remove Section 43, and Government must urgently find measures to rebuild the integrity of the Fund to ensure its efficient operation. 

The Portfolio Committee on Employment and Labour (The Committee) is currently hearing oral submissions related to the Amendment Bill.  The Committee will hear from 17 applicants on 20-, 22 and 28 April 2021.

NEASA is opposing section 43 of the Amendment Bill.  This section will ban the cession of medical service provider invoices to financial institutions and third-party administrators.  NEASA believes this is the only part of the Compensation Fund’s value chain that currently works, thus, so removing cessions will have a devastating impact on workers, medical professionals and employers.

Gerhard Papenfus, CE of NEASA said, “NEASA is particularly and vehemently opposed to the introduction of Section 43 of the Amendment Bill. The reasons for this are simple; the Compensation Fund is, and has been for some time, structurally and operationally dysfunctional. This is evidenced by repeated qualified audits by the Auditor-General and a slew of litigation and court orders against the Compensation Fund for non-payment of claims.”

When an employee is injured while performing their duties at work, the employee is able to access necessary specialised private medical care, given that the employer contributes to the Compensation Fund. Medical service providers then claim the fee from the Fund. However, because of the Fund’s dysfunction and rigorous administrative processes, medical professionals often choose to cede their claims to third-party administrators in return for immediate payment at a fee charged directly to the medical provider and not the Fund. 

In its presentation, NEASA highlighted that the explanatory memorandum to the Amendment Bill provides no insight as to the reason for the amendment, as it only indicates what the proposed amendment will be, without any explanation as to the purpose. 

“In our opinion, it may also be that the Fund is well aware that medical practitioners do not necessarily have the administrative capacity or expertise to navigate the complex and dysfunctional claims system. Third-party administrators have been very successful in finalising claims, often by way of legal action. It is possible that the fund is trying to prevent further adverse court findings against it, in the hope that the medical practitioners will not pursue unpaid claims,” says Papenfus.

NEASA told the Committee that Section 43 collapses the only element of the Fund’s process that currently functions efficiently, and will have a detrimental impact on the entire value chain, including employers, injury-on-duty patients and medical service providers, even to the Fund itself. In the end, it will be the injured workers who will suffer most, as practitioners will no longer be willing to treat them and they will be forced to pay personally or resort to public hospitals, which are already overburdened and rife with poor or non-existent service delivery.