The Council for Medical Schemes (CMS) is assessing whether to include the recent appointment of Momentum Health as administrator and Private Health Administrators (PHA) as managed-care provider in its ongoing Section 44 investigation into Bonitas. While Medscheme reports that the regulator has provided written assurance that the scope of the investigation has expanded to include these latest tenders, Bonitas has labeled these claims as “misinformation,” asserting that no formal change to the investigation’s scope has been communicated to them.
Status of the CMS Investigation into Bonitas Procurement
The regulatory scrutiny of Bonitas initially focused on two specific procurement decisions: the 2022 appointment of PHA to manage the BonCap option and the 2024 contract award to Agile Business Solutions for marketing, sales, and distribution. According to Bonitas, both the regulator and the scheme previously confirmed that the subsequent transition to Momentum Health and PHA fell outside the parameters of the original Section 44 inquiry.
Medscheme, which served as Bonitas’s administrator for 44 years, recently withdrew its High Court application to halt these transitions. The administrator stated it acted in “good faith” based on the CMS’s assurances that evidence submitted during the litigation—including documents regarding the most recent tender processes—would be integrated into the existing regulatory probe. Bonitas maintains that it has received no formal notification of a scope expansion and remains committed to cooperating with lawful regulatory inquiries.
Did you know?
The transition to new service providers on June 1 involved one of the largest administrator shifts in the South African medical scheme industry, impacting hundreds of thousands of members.
Operational Challenges and Industry Transitions
Following the June 1 transition, members reported widespread operational issues, including difficulties with hospital authorizations, chronic medication access, and digital platform usability. Medscheme noted that it had recommended a phased transition to avoid such disruptions, a proposal that Bonitas rejected. Bonitas has since stated that operational stability has been achieved, citing the deployment of additional capacity to clear backlogs in claims processing and oncology authorizations.
The regulator, the CMS, confirmed in June that it had engaged with both parties regarding these challenges. At that time, the CMS reported that Bonitas had submitted a recovery plan that appeared to be yielding positive results. Despite the shift in service providers, the underlying governance and procurement questions that prompted the initial litigation remain a point of contention between the two entities.
Legal Costs and Competitive Disputes
The High Court litigation, which saw Medscheme seeking an urgent interdict, was removed from the urgent roll in March 2026 due to procedural disputes. Bonitas characterized the withdrawal of the application as a “capitulation,” arguing that Medscheme failed to provide evidence of wrongdoing. The scheme further alleged that the litigation was an attempt by Medscheme to protect its commercial interests after losing contracts valued at approximately R1.8 billion annually.
Bonitas has signaled its intention to seek legal advice on recovering costs incurred during the litigation, which it describes as unnecessary. Conversely, Medscheme maintains that its evidence-backed allegations regarding procurement irregularities and conflicts of interest remain unanswered, as the court never reached the merits of the case before the contracts were implemented.
Pro Tip:
When navigating changes in medical scheme administration, members should monitor their scheme’s official communications for updates on service recovery plans and authorization processes to ensure continuity of care.
Frequently Asked Questions
Has the CMS officially expanded its investigation into Bonitas?
Medscheme claims the CMS provided written assurance that the investigation now covers the most recent tender processes. However, Bonitas states it has not been contacted regarding any formal expansion of the investigation’s scope.
What were the initial focus areas of the Section 44 investigation?
The investigation began by examining the 2022 appointment of PHA for the BonCap option and the 2024 contract award to Agile Business Solutions.
Why did Medscheme withdraw its High Court application?
Medscheme withdrew the application after receiving what it described as written assurances from the CMS that the evidence and information gathered during the litigation would be incorporated into the regulator’s ongoing investigation.
What is the current status of service delivery at Bonitas?
Bonitas reports that operational stability has been restored, with backlogs in claims and authorizations cleared following the June 1 transition to Momentum Health and PHA.
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