SAMWUMED had indicated that its agreement with NHN, which began in January 2021, had expired and attempted to exclude Melomed Gatesville and Mitchell’s Plain hospitals from its coverage. The union claimed it had tried to reach an agreement with Melomed to maintain access for members but was unsuccessful.

The NHN raised concerns over the impact on patients, highlighting that Melomed employs over 5,000 staff, many from the Cape Flats, and that removing the hospitals from the network could disrupt care and livelihoods.

In court, Judge Nelisa Phiwokazi Mali emphasized the potential consequences of exclusion, noting that patient flows, specialist referrals, and hospital reputations could be significantly affected. She also pointed out that Melomed Mitchell’s Plain is the only acute hospital in the area, and excluding it would force patients to travel 20–21 kilometres to reach alternative facilities, placing a financial and logistical burden, especially on those relying on public transport.

The judge added that medical practitioners could also be affected, as fewer patients might access their services, potentially discouraging them from practicing at these facilities. SAMWUMED has been interdicted from taking action until a final decision is made on the case.

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The Section 59 report, led by Advocate Tembeka Ngcukaitobi and commissioned by the Council for Medical Schemes (CMS), found that Black doctors and medical professionals have been disproportionately targeted by schemes such as Discovery, Medscheme, and the Government Employees Medical Scheme (GEMS) between 2012 and 2019.

The inquiry was launched after numerous Black practitioners raised concerns in 2019, alleging that medical schemes subjected them to unfair audits, payment delays, and contract terminations without clear justification—practices they claimed were racially motivated.

According to the panel, the procedures used to recover funds or investigate fraud, waste, and abuse (FWA) lacked fairness and were often used as tools of intimidation. Submissions from healthcare groups like the NHCPA and Solutionist Thinkers suggested that FWA systems were used to coerce Black providers into admitting debt and accepting punitive conditions.

Statistical findings from the report were stark:

In 2014, Black dental therapists under GEMS were three times more likely to be flagged.

In 2017, Discovery flagged Black psychiatrists at a rate 3.5 times higher than their white peers.

In 2018, Black anesthetists under Medscheme were 6.5 times more likely to be penalized for FWA.

Advocate Ngcukaitobi clarified that the panel was not a court and did not make legal rulings, but said the risk ratios were strong indicators of systemic discrimination. He emphasized that while not scientific certainties, the data overwhelmingly pointed to a racial bias in the treatment of Black healthcare providers.

However, the Board of Healthcare Funders (BHF), which represents many of the implicated schemes, has rejected the report’s findings. They criticized the methodology used to determine race—such as relying on surnames—and claimed the panel failed to consider other variables like provider behavior, workload, or socioeconomic factors.

The BHF warned that accepting the panel’s conclusions could open the door to unchecked fraud and mismanagement. They also pointed to the estimated R30 billion lost annually to fraudulent and abusive billing practices, which they argue harms all scheme members, particularly those from disadvantaged communities.

While the BHF continues to review the report, pressure is mounting for accountability and systemic reform within South Africa’s healthcare funding system.

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