Compensation Fund amendments: weak governance, no help for vulnerable workers

Proposed amendments to the Compensation for Occupational Injuries and Diseases Act (COIDA), purported to address governance weaknesses in the Compensation Fund by changing the advisory committee, will do nothing to change the fund’s performance and will continue to empower the minister to interfere in the activities of the fund and provide cover for a deficient commissioner.

Professor Alex van den Heever, chair of social security systems administration and management studies at Wits University, made this cutting statement during a webinar about the consequences of the proposed amendments for workers, employers and medical service providers.

Governance

He says the current advisory board is just a token with no powers and should be supervisory, independent of the executive and be in the position to hire and fire the commissioner, currently Vuyo Mafata.

“The historical weaknesses of this poorly managed fund will continue to harm the rights of workers to social security in South Africa as there is no political will to structurally change the governance structure in any meaningful way.”

Claims

The fund has assets of over R60 billion and more than R26 billion in reserves, but employers and doctors find it extremely difficult to access the fund’s systems. The fund replaced its previous IT system with a new SAP-based IT system called CompEasy, at a cost of R285 million in 2019, but the new system is equally dysfunctional, continuing the delays in the registration and adjudication of claims and payments to doctors.

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Although the fund has a massive surplus, it does not pay out claims unless doctors take legal steps. Until now doctors, who were unable to get their claims settled after treating workers who were injured in the workplace, sold their debts to a third party that could just concentrate on getting the money paid out by the fund.

Cessation

However, one of the amendments to Section 73 of the Act wants to bar doctors from doing this, saying that “cession or relinquishment of medical claim void any provision of an agreement existing at the commencement of this Act or concluded there after (sic) in terms of which a [medical] service provider cedes or purports to cede or relinquishes or purports to relinquish any rights to [a] medical claim in terms of this Act, shall be void”.

Assessing the amendments

Van den Heever said in assessing a piece of legislation, you should first consider if it infringes on a right protected in the Bill of Rights.

“If no, you must evaluate only if it has a rational purpose, such as a valid public concern as an objective with a logical connection to the relevant provision? If yes, you must evaluate whether it is both rational and reasonable, consider whether the objective cannot be achieved through less onerous means.”

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When you consider if the provision limits a right provided for in the Bill of Rights, you should look at the freedom of trade, occupation and profession, that gives every citizen the right to choose their trade, occupation or profession freely, which can be regulated by law.

“The rights in the Bill of Rights may be limited only in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors, including the nature of the right, the importance of the purpose of the limitation, the nature and extent of the limitation, the relation between the limitation and its purpose and less restrictive means to achieve the purpose.”

Except as provided for in subsection (1) or in any other provision of the Constitution, no law may limit any right entrenched in the Bill of Rights, Van den Heever says and points out that there is no policy document that outlines the rationale for the proposed policy or any other provisions contained in the Bill.

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“The closest document is the Socioeconomic Impact Assessment System [SEIAS] performed by the Presidency, but this report is not produced by the lead department and cannot be relied upon as an appraisal of the proposals. This is a weak report that does not meet the most basic standards of a socioeconomic assessment.”

Desired outcome of amendment

On page 10 of the amendments, under costs/benefits from achieving desired outcome, there is a reference to the amendment “reducing fraud and corruption by third parties who buy claims form doctors”.

Van Heerden says no evidence is provided of concluded criminal cases of fraud and corruption against third-party administrators.

“There is also no policy document outlining the public purpose of the provision and no evidence of any public harm resulting from third-party administrators. There is in fact no valid public purpose for the provision.”

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Why change then?

The only common-sense outcomes that can be determined for this prohibition are, according to Van den Heever:

• Reduced accountability of the Compensation Fund to pay legitimate claims
• A transfer of claims default risk to medical practices which will impact on their financial viability if they continue to see COIDA cases
• A likely withdrawal of private medical services providers from treating COIDA patients, which undermines workers’ established rights to quality and affordable healthcare and social security.

Eliminating the only section that works

Van den Heever was joined by Tim Hughes and According to Tim Hughes of the Injured Workers Action Group (IWAG), the Compensation Fund is wholly dysfunctional and removing the cession of invoices will eliminate the only part of the fund’s value chain that works. If this amendment is adopted, injured workers will not have access to quality healthcare, which is the very essence of the act.

Comment by Friday

Written submissions, can be directed to the portfolio committee on employment and labour, (for attention: Mr Zolani Sakasa), or emailed to coidabill@parliament.gov.za by no later than Friday, 19 February 2021 at 16:30. Find the bill here.

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