The Council for Medical Schemes (CMS), regulator of the medical schemes industry said it has removed nine Board of Trustees members of Bestmed Medical Scheme due to extravagant spending and their professional inability to serve on the board.
The removal of the trustees follows a routine inspection by the CMS of the Bestmed board. The CMS found that medical scheme members' money had been spent on lavish holidays and entertainment.
Some of the transactions included a trip to Botswana where Bestmed paid R365 201.23 for a safari, and a helicopter flight over the Victoria Falls, which the CMS said Bestmed put down as a marketing cost. Other marketing costs, the CMS explained, consisted of hunting trips worth R60 000, and Neil Diamond concert tickets, plus flights, entertainment and liquor amounting to R140 793.39.
"The Botswana Trip, hunting trips, paying for concerts, tickets and suits for rugby and sports events are not business of a medical scheme. They are also not costs incurred by the medical scheme in the carrying on of the business as a medical scheme," said the CMS.
Bestmed hits back
The Bestmed board members have launched an urgent application, in which they also refer to an appeal to the Appeal Board, to suspend the order in the North Gauteng High Court in Pretoria.
"I view the CMS's action to remove Trustees from Bestmed's Board last week as extremely harsh and a great disappointment to say the least," said Dries la Grange, Bestmed CEO.
La Grange went on to say that the Council seems to not have considered the effect s of these drastic measures on Bestmed's members' interests, nor the reputation of the scheme and the trustees concerned.
"They seem to ignore that, prior to this action, Bestmed had, for a number of years, provided its full and unconditional cooperation to the Council to resolve all issues and concerns that were raised by it relating to the matter in question," said La Grange.
The main concern with the findings, La Grange explained, was that the information which was made public was inaccurate.
"The CMS has publically declared in recent days its main concerns pertain to apparent wasteful expenditure on travel, hunting, sports matches and a Neil Diamond concert. My colleagues and I, acknowledge that these have been the main topics of our engagement with the CMS but are concerned that the facts presented publically are not accurate. The figures spent on these events are inaccurate," said La Grange.
It was highlighted by La Grange that the trustees paid their own costs for these events, and that no members' money was used.
"The fact that, as a positive response to the Council's concerns (and despite the view that the Scheme and its members had benefited from investing in these marketing initiatives), we had initiated steps to recover expenditure in relation to these events is not mentioned in the Council's press release, in my mind distorts the facts and is plainly unfair […].There have been no calls on us in the past many months for further engagement with the CMS or for additional information required by them," said La Grange.