MediCheck calls for full probe after Discovery medical aid error

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JEREMY MAGGS: Discovery Health has reversed recovery demands affecting something in the region of 16 500 medical scheme members after a claims processing error triggered widespread concern, confusion and, I think, financial stress for many, many households.

The disputed amounts, estimated at between R130 million and R170 million, will now be written off, with all deductions reversed and refunded. The episode, though, has raised significant questions about governance, about administrative oversight and safeguards that are meant to protect members from systemic failure.

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Joining me now is Mark Hyman, chief executive officer, MediCheck, and I want to take a look at what this incident reveals about transparency, accountability and maybe the state of controls across the industry.

Mark, a very warm welcome to you. Maybe let’s start with us, your understanding of how this internal systems error originated and how it was allowed to escalate to this level. It all still seems very opaque in spite of the turnaround from Discovery.

MARK HYMAN: Yes, Jeremy. Good afternoon and good afternoon to your listeners.

It still remains a opaque to us, despite the fact that we’ve held meetings with Discovery, urgent meetings last Thursday. The level of the error has occurred. We are not able to determine and understand because it has not been disclosed to us how that error occurred. It’s systemic.

The fact that Discovery did not pick this up in their monthly reporting, in their quarterly reporting, and at least by half year, they should have been aware of the fact that there were overpayments, theoretical overpayments, being made to members of the medical scheme.

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We do not have an insight into what actually went wrong beyond the fact that Discovery said they made an error. They’ve admitted their error. We’re not able to delve into the exact error that occurred, but it must be, from our perspective, a coding error that occurred that was not picked up.

The members would have been totally oblivious to this error occurring on their medical aid above-threshold benefits from January of 2025. They would never have seen it.

JEREMY MAGGS: Yet, it’s extraordinary that it took such a long time, Mark, for this issue to be fully acknowledged and then corrected.

MARK HYMAN: Based on the meeting that we held with Discovery, with our senior counsel last Thursday, they advised us that they actually noticed the error six weeks prior to 18 December, and they began the reprocessing as far back as, let’s call it, six weeks. So they would have noticed this error around about mid-October.

Read: Discovery Health Medical Scheme member loss continues

But the regulator wasn’t informed. I’m sure that various board meetings and executive meetings were held at Discovery to determine the value and the volume, but it was undisclosed.

JEREMY MAGGS: And what does that then say to you about practices within Discovery?

MARK HYMAN: Jeremy, I think that in every medical aid, medical aids are required by law to have an administrator. There needs to be an arm’s-length contract between the administrator and the medical scheme. They are two totally separate entities. They are totally separate juristic individuals.

I think that the Chinese walls, between the Discovery administrator, which is Discovery Health Medical Scheme, and Discovery Health, the non-profit, have fallen apart.

I think that the regulator needs to be addressing this, because the closeness between the two is almost impossible to sever with a scalpel in a surgery.

JEREMY MAGGS: Do you think the regulator has the appetite to do that right now?

MARK HYMAN: I believe so. We were in discussions with the Council for Medical Schemes on Friday. We were in discussions again with them yesterday morning when we were advised by Discovery, at 11:30 yesterday morning, that they were retracting their clawback.

It is my view and understanding, and I cannot talk for the regulator, but I do believe that there will be a Section 44 investigation into this debacle.

Now, a Section 44 means an entire audit of both the medical scheme and the administrator.

JEREMY MAGGS: You speak, Mark, about having met with the company on a couple of occasions. Are you able to describe to me the atmosphere within that meeting? Was Discovery dogmatic? Were they contrite? How did these discussions play out?

MARK HYMAN: Jeremy, the meeting was held without prejudice, so we did not discuss the legal aspects. I must stress very clearly that the meeting was chaired by Karen Sanderson, the chief operating officer of Discovery, and the meeting was exceptionally cordial, and they apologised for their error. Towards the end of an hour-and-a-half, one hour and 45 minutes meeting, their comment to me was, “Mark, what do you want?”

JEREMY MAGGS: How do you think Discovery should have handled communication to its members better to prevent the confusion and, Mark, in many cases, panic from some people?

MARK HYMAN: Jeremy, I believe that the methodology used was out of the norm in terms of medical schemes, any medical scheme. I think that the manner in which it was handled by Discovery was not acceptable to the vast majority of members, despite the fact that they commenced phone calls to members commencing 30 December 2025.

I do believe that this should have been held over until January 2026, and I believe that a full press statement should have been made to the public in the public interest to say there has been a systemic error.

We are looking at it. Members will be advised accordingly. However, that didn’t take place. What happened was members received phone calls. Members received letters and of course, panic set in.

Read: More than half of Discovery’s medical aid plans saw declines in members last year

The comment that you make about the financial toxicity that occurred amongst members of the scheme was absolutely traumatic. People were thinking of committing suicide. People were saying, how are we going to pay this? It was a total debacle for members of the medical scheme.

JEREMY MAGGS: Do you think the group chief executive officer, Adrian Gore, should have been or should be more visible in this?

MARK HYMAN: Discovery is broken down into multiple elements. It’s broken down into the health side through the medical scheme. It’s broken down into the investor part.

JEREMY MAGGS: I understand but his name is synonymous with Discovery, isn’t it?

MARK HYMAN: Yes, but at the end of the day, the chief executive officer of Discovery Health is Ronald Whelan, and he is the face of Discovery in this issue. If there will be a statement that will come at some time from Adrian, we must leave that to Discovery to make that decision.

But Ronald has put out a press statement, which he did late yesterday afternoon, and they have written to members. I do believe, quite honestly, that Adrian, being the type of guy that he is, will make a statement on his LinkedIn platform apologising for the error that has been made.

JEREMY MAGGS: Well, let’s see if that happens. How confident, Mark Hyman, should we be, or can members be, that similar errors are not sitting elsewhere in the system undetected?

MARK HYMAN: Jeremy, to answer that question, MediCheck is a watchdog organisation on behalf of members of medical schemes.

We sit with in excess of 12 000 members on our MediCheck profile, and we are watching it carefully.

We have advised the regulator accordingly.

The regulator is aware of it, and we have recommended, not that the regulator will follow it, but we have recommended that the regulator actually goes in and does a Section 44 to determine if there are other systemic errors that neither Discovery nor the members have picked up as yet. So there very well could be.

JEREMY MAGGS: Thank you very much, Mark Hyman, chief executive officer at MediCheck. We are out of time but thank you so much indeed for that explanation.

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