R15.7m of Polmed's funds 'looted' by board of trustees

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Johannesburg - Millions of rand in alleged “unlawful looting” of the SAPS’s medical scheme Polmed have drawn the ire of scores of police officers, who have slammed the level of coverage received. Claims are that Polmed, which covers 680000 members and beneficiaries, has “unlawfully” awarded roughly R15.7million to its board of trustees (BOT) over three years in alleged contravention of its own rules. Allegations are also that former national police commissioner General Riah Phiyega was “illegally” elected on to the BOT in contravention of Rule 18.9.9, which states: “Any person removed from an office of trust on account of misconduct should not serve on it." According to rule 18.24, Polmed remuneration should be determined by the scheme's annual general meeting (AGM) and not by the Council of Medical Schemes (CMS). By Polmed's own admission, the scheme hasn't held an AGM since 2015, with questions being raised as to who approved the BOT payments.

However, internal Polmed documents, which The Star has seen, show that the scheme's principal officer Neo Khauoe and the BOT's risk committee were aware that the alleged unlawful payments could drag the medical aid into a legal quagmire.

In minutes from an April 2018 meeting, Polmed hinged its bets on a supposedly vague letter from the CMS, where the scheme realised it could be in trouble with the law.

“Ms (Lydia) Motsepe informed the meeting that the CMS exemption letter was written in very broad terms and that exemptions regarding the increase in remuneration for the BOT were not specified and may cause a future litigation risk.

“The meeting deliberated on the matter and Khauoe mentioned that we may take a risk and assume that CMS provided exemption as was requested,” the minutes read.

The CMS, which promised to answer The Star's questions sent to it on Thursday, did not answer.

Polmed allegedly made illegal BOT payments of R4.93m in 2016, R5.98m in 2017 and R4.80m in 2018, for a total of R15.71m, while the scheme lost over R140m in 2018 from the previous year because of “the increasing claims ratio” - according to the annual report.

Meanwhile, The Star has been given access to several social media sites where police officers vent about what they believe to be the atrocious coverage received from Polmed.

“I'm having problems with Polmed, which paid only R11000 for my son who was admitted at (an Eastern Cape) hospital (in July), and its total was R42000.

“I'm going to pay an additional R31000,” an emotional father said.

There were hundreds of such messages, with accusations that officers are turned away by many general practitioners.

Phiyega slammed her accusers, saying she had never been found guilty in any court, despite a 2017 report by Judge Neels Claassen that the former commissioner was not fit for office.

Khauoe acknowledged that the scheme has failed to have successful AGMs because of "invalid orchestrated and planned disruptions”.

On the alleged unlawful remuneration, Khauoe said litigation risk was a reality, but that the BOT had to protect member' interests, not allow a “faction” to rule Polmed “disorderly”, and that BOT fees have not increased since its 2015 AGM.

“A faction who are afraid that their allegations, which you have also mentioned, will be proved otherwise, have always disrupted the meetings, resulting in meetings being stopped without the agenda being fully dealt with,” she said.

“If members believe or have any knowledge or suspicion of any wrongdoing or allegations of looting at Polmed, we encourage them to report such wrongdoing to the police,” Khauoe said.

The Star