“correction” of medicine claims processed between January and December 2025

To: Discovery Health Medical Scheme – Office of the COO / Compliance Department

Dear Sir / Madam,

I refer to the letter issued under the signature of the Chief Operating Officer regarding the retrospective “correction” of medicine claims processed between January and December 2025. While the letter provides background on the nature of the system error, it does not cure the fundamental ********ness and procedural unfairness of the remedy Discovery now seeks to impose.

This correspondence constitutes my formal rebuttal.

Acceptance of Error Does Not Justify Retrospective Member Liability Your letter expressly acknowledges that:

A claims processing error occurred within Discovery’s systems;

Claims were approved and paid at 100% of the Discovery Health Rate when they should not have been;

As a result, members allegedly received “more cover than qualified for”.

The existence of an internal error is not disputed. However, it does not follow in law or regulation that Discovery may retrospectively transfer the financial consequences of that error to members.

An admitted scheme-side system failure is an operational risk borne by the Scheme, not by members who re**** in good faith on approvals issued by Discovery at the point of service.

Point-of-Sale Approval Creates Legitimate Reliance The claims in question were:

Submitted electronically by the pharmacy;

Approved in real time by Discovery’s systems;

Dispensed on the basis of that approval.

Discovery’s real-time adjudication system exists precisely to:

Apply benefit rules correctly;

Identify co-payments or self-payment gaps immediately;

Prevent post-dispensing disputes.

Had the claims truly been subject to co-payments, SPG liability, or exclusion from ATB accumulation, they should have been declined or partially approved at the pharmacy. That did not occur.

Once medicine has been dispensed following scheme approval, the member is irreversibly prejudiced and cannot mitigate the cost. Retrospective reversal in these circumstances is procedurally unfair.

Retrospective Reprocessing Is Not Supported by Scheme Rules Your letter states that the correction is required to ensure benefits align with Scheme rules. However:

No specific registered rule has been cited that permits the retrospective reversal of approved and settled pharmacy claims to the detriment of a member;

No rule has been identified that allows Discovery to retrospectively impose co-payments that were not communicated at the point of sale.

Absent such a rule, the reprocessing is ultra vires and unenforceable.

Regulatory Non-Compliance The approach outlined in your letter remains inconsistent with the Medical Schemes Act and its Regulations, including but not limited to:

Regulation 5 – Benefits must be determined in accordance with registered rules, not retrospectively reinterpreted following system failures;

Regulation 7 – Rules must be app**** fairly and consistently; retrospective corrections without prior notice or uniform remediation are neither;

Regulation 8 – Proper and reliable financial records are required; an admitted system error undermines reliance on retrospective recalculations;

Regulation 15 – Members are entitled to clear, timeous, and accurate information regarding liabilities before amounts are reflected as due;

Regulation 17 – Meaningful dispute resolution is impossible where liability is imposed first and explained later.

Repayment Plan Proposal Is Rejected The proposal to “arrange a repayment plan” is premature and rejected. One cannot agree to repay an amount that is lawfully disputed and not validly due.

Any attempt to debit, collect, or reflect this amount as arrears while the dispute remains unresolved will be regarded as procedurally improper and will be raised expressly with the Council for Medical Schemes.

Formal Position and Demand My position is therefore as follows:

Claims approved and paid at the point of sale may not lawfully be retrospectively reversed due to Discovery’s internal errors;

The alleged amount of R14,199.96 is disputed in full and is unenforceable;

The appropriate remedy is internal correction by the Scheme, not member repayment.

I hereby formally demand, within 10 (ten) business days, written confirmation that:

The retrospective reversals have been withdrawn; and

The alleged member liability has been reversed in full.

Failing this, I will proceed with escalation to the Council for Medical Schemes, submitting this letter and your correspondence as evidence that Discovery seeks to transfer the consequences of an admitted system failure to a member, contrary to the regulatory framework.

This correspondence is sent without prejudice, and all rights are expressly reserved.