Compensation for Occupational Injuries and Diseases Amendment (COIDA) Bill: public hearings day 3
Employment and Labour
22 April 2021
Chairperson: Ms M Dunjwa (ANC)
Video: Portfolio Committee on Employment and Labour
Read more about the Mahlangu matter here. (source: SERI)
Read the full Constitutional Court Order here.
Download the COIDA factsheet here.
The Occupational Therapy Association of South Africa (OTASA) spoke of the role of Occupational Therapy in injury rehabilitation and assisting injured workers to return to meaningful employment. OTASA welcomed the inclusion of clinical and vocational rehabilitation incentives in the COIDA Bill. It informed the Committee that injured workers were challenged in accessing compensation as they were not able to navigate the CompEasy system to register and submit claims. OTASA welcomed the inclusion of domestic workers to receive compensation benefits and systems to ensure better compliance on compensation claims. OTASA rejected the use of the terms ‘medical practitioners’ and ‘medical advisory panel’ which refers to doctors and recommended the terms ‘health practitioner’ and ‘health care advisory panel’ instead. Occupational therapists (OTs) registered with OTASA informed the Committee that the CompEasy system challenges negatively impacted patients and practising OTs. OTASA supported the rehabilitation emphasis of the COIDA Bill, but expressed concerns on the efficiency of CompEasy system, and maintained that third-party intermediaries could only be excluded as proposed in Clause 43 if the Compensation Fund could be held accountable to ensure that claims are paid within 30 days.
The Committee asked OTASA questions about the challenges of the CompEasy system, the role of occupational therapists in rural areas and third-party intermediaries.
CompSol explained its role in providing administrative support and acting as a cessionary to ensure 100% compliance in compensation claims payouts. As a third-party intermediary, it enabled medical service providers (MSPs) to continue operating despite the delays in the paying of claims by the Compensation Fund due to the Fund’s CompEasy system challenges and incorrect invalidation of claims and poor resolution of queries by Fund staff. The average time for the Compensation Fund to pay invoices is 347 days. CompSol said that health care practitioners would go out of business if they had to carry this debt for more than a year. There had been inadequate consultation about the impact of Clause 43(4) in the socioeconomic impact assessment of the Bill.
CompSol was opposed to Clause 43(4) of the COIDA Bill which seeks to ban the services of third-party intermediaries. This would do nothing to improve the efficiency of the Compensation Fund and reduce fraud. It would have the opposite effect. Third party administrators assist in eliminating fraud. Banning third-party administrators would prevent the ownership/transfer of medical invoices/claims which was unconstitutional as it violated the right to property and the right to freedom of trade.
The Committee asked CompSol about the impact of passing the COIDA Bill with Clause 43(4); the legal cases it had against the Compensation Fund, and the negative impact of the CompEasy system challenges on compensation claims.
SERI noted the victory for gender equality with the inclusion of domestic workers in the Compensation Fund coverage. It noted that although the Constitutional Court judgement directs the Compensation Fund to accept retrospective claims from domestic workers, certain sections of the Act do not permit this. These were Section 38 (notice of accident by an employee to employer), Section 39 (notice of accident by the employer to Commissioner), Section 41 (particulars of claim), and Section 44 (prescription). SERI suggested that the Department should either withdraw the COIDA Bill or ensure that retrospective claims can be made as required by the November 2020 judgement.
The Committee asked questions on the vulnerability of domestic workers in requesting employers to ensure Compensation Fund contributions. The Committee suggested that SERI submit re-drafted sections to include in the Bill to ensure retrospective claims by domestic workers as set out in the Constitutional Court judgement.
COSATU supported the COIDA Bill in the areas of compensation, expanded definition of dependents, and inclusion of domestic workers under Compensation Fund coverage. COSATU welcomes the inclusion of post-traumatic stress disorder and the inclusion of cover for diseases resulting from the workplace. It supports the provisions setting out board membership and NEDLAC’s role in facilitating nominations from organised labour and business, and the introduction of the no fault rule when determining compensation. COSATU proposed amendments to the COIDA Bill’s guarantee to workers on the right to rehabilitation and the setting of strict conditions for the issuance of licences to carry on the business of insurance.
Solidarity said the Act was complicated for ordinary employees to know their rights. Comments were made on the amendment of definitions where Solidarity opposed the removal of the word "accident" which was substituted with either the word “incident or occurrence', proposed that the periodical payments shall be made for temporary total disablement from day one, opposed the ‘special circumstances in which the Commissioner may refuse an award” because it infringed on the rights of the injured workers, opposed the demutualisation of the mutual associations because it will not be in the interest of employees if compensation is paid by an ordinary insurance company, and expressed serious concerns on the lack of processes and procedures available to employees to report their claims (a right recognised by the courts) and the failure by some employers to report claims for occupational injuries and diseases. Solidarity concluded by making recommendations on each of its concerns.
The Committee remarked that it would consider the recommendations made in each submission
Occupational Therapy Association of South Africa (OTASA) submission
Mr Elvin Williams, OTASA Vice President for Strategy & Policy Development, explained that OTASA advocated for the rights of occupational therapists in South Africa with a membership base of 3 993 occupational therapists (OTs) and OT is a health profession regulated by the Health Professions Council of South Africa (HPCSA). Occupational Therapy assists people with or without health challenges to participate in things they want and need to do through their lifespan using therapeutic means of everyday activities. Common OT interventions include helping children with disabilities to participate fully in school, engage in play and social situations, injury rehabilitation, and providing support for older adults experiencing physical and cognitive challenges. He shared a video that showcased the needs of workers who had been injured on duty where OTs are concerned with activities of daily living such as bathing, learning, work, education, and social participation as the injured worker has to return to meaningful employment. Most Compensation Fund (CF) clients have physical injuries and/or psychological challenges from trauma of injury as well as disability. Intervention focuses on injury and psychological support for comprehensive and progressive return to work (RTW). OT is concerned with the capacity of the injured person to do the job in an acceptable way (speed) and meet the specific job demands. It does this by advocacy and support for the injured employees, line manager, and co-workers. The process includes putting reasonable accommodation through assistive devices or alternative employment, work hardening (enabling physical development for possible return to original work) and support. He showed evidence through peer-reviewed papers on the need for OT in the process of early RTW for injured employees.
Prof Pat De Witt, OTASA President, said OTASA supports the COIDA Bill. It supports the inclusion and incentives of vocational rehabilitation in the COIDA Bill. It is pleased with clinical rehabilitation and provision of assistive devices for physical and psychological recovery, vocational rehabilitation that assists the employee to be re-employed, and social rehabilitation to assist with employee independence.
There are three components to assist the injured employee RTW early – they are Pre-RTW phase, vocational rehabilitation, and transitioning which involves RTW planning and coordinating phases. 1) The pre-RTW phase involves physical and psychological support which is covered by the Compensation Fund.
2) The vocational rehabilitation phase comprises function component evaluation and works readiness program, looking at which work-ability needs to be strengthened, what can be done to increase production speed, and building up work endurance (in work hardening programs and job simulations). These measures are not possible except if a work visit is done. A work visit includes job analysis, job fitness tests, job design accommodation, and environmental adaptation which lead to the provision of assistive devices and technologies.
3) Transitioning involves revisiting the trauma site which is painful to the injured employee and requires ongoing case management which might take some months. It also requires outreaches to employer/line managers and advocacy to manage the situation to ensure that this phase is successful.
Therefore RTW is a broad aspect that involves many components and the therapy might take a long time to compensate for the deficits that the injured worker might have. There has been an increase in the number of injured workers that need the service of an OT. Surveys show that approximately 4000 clients per annum need the service of OTs.
Three surveys conducted in May 2020, August 2020, and February 2021 showed that injured workers had challenges with the CompEasy system which made it difficult to access compensation. The challenges were on registration, inability to navigate the CompEasy system (78.1% have not been able to submit claims and only 21% of injured workers that submitted claims have received compensation). The challenges observed with using CompEasy are error methods when attempting to submit pre-authorisations, pre-authorisation rejections which should be resolved by staff but are not resolved, and a majority of claims not paid within 30 days.
OTASA welcomed (a) the inclusion of domestic workers (Clause 1) as ordered by the courts who may receive compensation benefits when injured on duty, (b) systems that ensure better compliance such as penalties on employers that do not register employees.
OTASA objects to:
(a) the term ‘medical practitioners’ in the Bill which should be substituted with ‘health practitioner’. This terminology affects professional independence because it implies that forms would be signed by a doctor, and terminology shows that claims are through a medical doctor;
(b) naming of a “Medical Advisory panel” in Section 70, because the term “Medical advisory panel” suggests that only a doctor can be on this panel. Although a medical practitioner (doctor) may refer, they are unable to prescribe or make any pronouncements on the nature of the work of other health practitioners. Indeed, it would be unlawful in terms of sections 34 and 39 of the Health Professions Act, for a medical practitioner to do so, and also a contravention of Rule 21 of the HPCSA rules applicable to all practitioners. OTASA recommends that section 70 be amended and the phrase ‘health care advisory panel’ be used instead of ‘Medical Advisory panel’,
(c) proposed prohibition on the involvement of intermediaries in claims and compensation recovering processes (Clause 43 of the Bill amending Section 73). OTASA understands that this amendment is to protect the rights of beneficiaries but the cession could have grave practical repercussions for all healthcare professionals. This is because OTASA has great concerns about the capability of the CompEasy system as it is challenged in settling claims within 30 days.
Occupational Therapist, Ms Natalie Powell, spoke of the experience of working directly with Compensation Fund as a private practitioner. Daily use of CompEasy presented challenges such as employees were unable to register and these employees were unable to submit claims and would not be paid for periods up to 18 months. Downtimes were experienced and one could not log into the CompEasy system. One was unable to upload reports and pre-authorised documents on CompEasy system. There was rejection of claims, incorrect capturing of claims, duplication of information on pre-authorisations for treatments, display of error message on certain claims, and poor response time to submitted pre-authorisations. Generally, there has been poor feedback on call centre inquiries as occupational therapists are kept on hold for extended periods that often lead to unresolved queries. This has a negative impact on the OT as claims are not settled on time. Hence OTs are selling their business and leaving the country. On the side of the patients, the standard of care drops as OTs refuse to see patients, there are poor diagnoses mechanisms and increased disability which would lead to more claims on the Fund because the functional ability of patients deteriorates during periods of delay in submitting claims.
Prof Pat De Wit said that although the COIDA amendment is to protect the rights of beneficiaries the system in place is unable to combat waste and fraud. OTASA queries the fact that transgressors are not being reported to the Health Professions Council of South Africa. OTASA also wants the Commissioner of the Compensation Fund to identify the officials making judgment call on pre-authorisations, over-servicing, and any potential fraudulent claims.
In summary, OTASA supports the rehabilitation emphasis of the COIDA Bill, but is concerned about the efficiency of the CompEasy system, the term ‘health care practitioner’ to replace ‘medical practitioner’ and maintains that third-party intermediaries can only be excluded if the Compensation Fund is held accountable to ensure that claims are paid within 30 days.
Mr N Hinana (DA) asked OTASA to state how it makes communities aware of what occupational therapists do. What has it done to assist victims of hazardous chemical inhalation in Northern Cape? What it has done to inform the government of the dangers of using asbestos roofs in houses?
Dr N Nkabane (ANC) asked OTASA to confirm if it was part of the stakeholder engagement meetings on migrating to the CompEasy system platform and, if not, to comment on why it was not.
Ms H Denner (FF+) asked OTASA if it had reported its concerns on late claims pay-outs and the challenges faced on the day-to-day use of CompEasy to the Department of Employment and Labour (DEL).
Mr M Bagraim (DA) observed that OTASA had mentioned unpaid claims dating back to 2019 and asked OTASA if this was the reason OTs had sold their business and were leaving the country. He asked how many patients were affected by the challenges faced in the day-to-day use of CompEasy, if OTASA keeps records of injured employees who could not register on the CompEasy system, if its feedback on the day-to-day use of CompEasy was similar to the feedback of other health practitioners, and to give more information on the CompEasy downtime.
The Chairperson asked OTASA if it had visited the Compensation Fund offices to see how the CompEasy system operated. She remarked that there must be an improvement in the efficiency of CompEasy.
Mr Elvin Williams replied that OTASA had a joint National Forum of Occupational Therapists at the provincial level which reaches out to victims of hazardous chemicals in the rural areas and had also set up strategic alliances with rural practitioners. South Africa still had a small number of OTs in the rural areas so OTs worked with other health practitioners to ensure that patients had access to care. OTs were involved in assisting people with respiratory illnesses although gaps existed because the number of OTs was smaller compared with patients. OTASA is available to collaborate at the provincial level to share knowledge on respiratory illnesses.
Prof Pat De Wit replied that OTASA has continually communicated with Compensation Fund through continual emails, virtual meetings and continual discussions on the day-to-day challenges of CompEasy. Patients in provincial rural areas visit central areas to receive care.
Occupational Therapist, Ms Leandi Richter, replied that OTASA had had several meetings with the Compensation Fund to discuss challenges in the day-to-day use of the CompEasy system but the challenges had not been resolved. OTASA has asked the Fund to provide information to enhance the use of the CompEasy system and overcome its barriers but to no avail. OTASA is open to suggestions to alleviate these challenges.
Prof De Wit said OTASA had introduced systems to ensure that the Compensation Fund resolves the challenges in the use of the CompEasy system but the challenges remain unresolved. Ms Richter can confirm that systems had been introduced to ensure that Compensation Fund had been informed of the challenges faced with the use of the CompEasy system.
Ms Richter confirmed that she had visited Richards Bay Labour Office to resolve these challenges and was referred to Durban Labour Office – yet the CompEasy system challenges had not been resolved.
Mr Williams said OTASA was experiencing the movement of OTs to other countries. This would have an impact on health insurance. Given the level of unemployment in the country, the country could not afford instances where patients were unable to return to work. He said a system had been created under the auspices of allied health care practitioners where evidence on the day-to-day challenges on the use of the CompEasy system was being collated. The challenges reported to the Portfolio Committee were after OTs had visited the Compensation Fund labour offices to demonstrate the inefficiency of the CompEasy system.
Ms Richter said OTs supported the use of third-party intermediaries because OTs could not do the administrative work carried out by third-party intermediaries.
The Chairperson asked OTASA President to comment on the use of third-party intermediaries.
Prof De Wit replied that when third-party intermediaries complicated the process of claim pay-outs it would make sense to stop their services as stated in the COIDA Bill. However, the presence of third-party intermediaries made it easier for OTs to carry out their services. It would make sense to continue with the services of third-party intermediaries. Claim payout is delayed due to the CompEasy system. If the Compensation Fund makes the CompEasy system efficient then these challenges would be resolved.
OTASA did not report the CompEasy system challenges to the Department of Employment and Labour (DEL) because it had always worked directly with the Compensation Fund. The CompEasy system had negatively impacted the services of OTs in the country.
The Chairperson advised OTASA to attend the Portfolio Committee meeting when the Compensation Fund was invited. She encouraged OTASA to report the CompEasy system challenges to the DEL She asked Ms Richter to clarify the statement that she was not assisted at the provincial labour office.
Ms Richter confirmed that she had reported the challenges on the use of CompEasy systems at Richards Bay Labour Office and had been referred to the Durban Provincial Office. However, the challenges had not been resolved by the Durban Provincial Office.
In response to the Chairperson asking if this happened during the lockdown, Ms Richter said that it was before the COVID-19 pandemic.
The Chairperson asked Ms Richter to provide a written submission to the Committee on this.
Compensation Solutions (CompSol) submission
Mr Fritz Lüttich, from CompSol (Compensation Solutions), introduced himself and advised the Committee that he will be leading the presentation, assisted by Mr Craig Tudhope and Ms Mirieke Vermaak (both specialists in their field) – they will address the Committee on certain specialist sections of CompSol’s submission.
Mr Lüttich thanked the drafters of the Bill in terms of the many additions that have been made (and which is long overdue); it is welcomed especially the addition of domestic workers to the new Amendment Bill.
It was explained that CompSol’s presentation was divided into three parts:
- Overview Fritz Lüttich
- Ceding Craig Tudhope
- Legal Mirieke Vermaak
CompSol explained that once an employee is injured at work, that they require the services of a spectrum of Medical Service Providers or Health Care Practitioners. This includes the full spectrum of 66 various disciplines i.e. ambulances, hospitals, Doctor’s, Radiologists, Orthopaedic Surgeons etc.
All of the 66 disciplines deliver a health service to the injured workers but there is certain documentation that need to accompany that specific service delivery to move the process forward, and this includes the medical reporting side and the invoice side or medical bills.
The medical bills and medical reports are then forwarded to an Administrator. This Administrator can be the Medical Practitioner’s own, internal, administrative staff or it can be outsourced. This Administrator will then validate, process and ensure that all documentation received is compliant as the Act stipulates. Upon completion of the validation process, the information is then sent to the Compensation Fund and also forwarded to a Cessionary (somebody that has a contract with the Medical Service Providers in order to prefund their invoices). The Cessionary then has the locus standi or the right to act on that invoice due to the contract it has with the various Service Providers. The Service Providers will then get paid (in CompSol’s case within 14 days of the validations being done)
CompSol indicated that they offer both Administrative and Cessionary services.
After the service provider has been paid by the Cessionary, all the documentation received from the various service providers is then be forwarded to the Compensation Fund where they process and validate on their side whereafter some payments will happen from that.
The issue of compensation paid to employees was not applicable today as CompSol is specifically focusing on Clause 43(4) which focuses on medical claims. As a third-party intermediary, it enabled medical service providers (MSPs) to continue operating despite the delays in the paying of claims by the Compensation Fund due to the Fund’s CompEasy system challenges and incorrect invalidation of claims and poor resolution of queries by Fund staff.
Collectively, CompSol’s Medical Service Providers are owed more than R556 000 000 in unpaid accounts.
In addition to this, services, to the value of R180 000 000, which have already been rendered in good faith could not yet be registered with the Compensation Fund due to the structure of the CompEasy system. The patients, who received these services, cannot pay, they cannot claim and nor can any employer claim their 75% from the Fund if the patient is off from work for more than three days
The average time for the Compensation Fund to pay an invoice is 347 days. If this is broken down to the individual Labour Centres, it can be seen that the three worst Labour Offices are in excess of 400 days before an account gets paid. The best Labour Office takes 221 days.
Mr Lüttich noted that it can be seen in a normal medical practice, that a 25-40-day payment cycle by a medical aid is acceptable. CompSol does the turnaround in 14 days and the Compensation Fund takes between 221-474 days
CompSol said that health care practitioners would go out of business if they had to carry this debt for this period of time.
CompSol explained the role of Cessionaries as being the gate keepers and aggregators to ensure that there is 100% compliance with the COID Act, with the tariffs, rules and Regulations published in the Gazette. They also ensure that the injured workers realise their rights in terms of the COID Act, provide administrative support to all the stakeholders (employers, employees and Medical Service Providers), provide working capital to the Medical Fraternity and they eliminate 99.9% of potential fraud before any documentation is even submitted to the Fund, as legal compliance is ensured before an invoice is submitted to the Fund by their state-of-the-art software with built in validations.CompSol opposes Clause 43(4) of the COIDA Bill which seeks to prohibit the cession of medical invoices
CompSol noted that despite repeated outreach, there has been limited response by and engagement with the Compensation Fund Commissioner, Mr Vuyo Mafata, regarding the serious shortcomings on the Fund. Numerous meetings were held in the past with senior management officials from the Fund to expose problems experienced with the CompEasy system, accompanied by many examples; the Fund seems unable to fix the problems on the CompEasy system. The Fund’s staff needs training to prevent incorrect rejections of valid invoices.
Medical Service Providers cannot afford to take legal action against the Compensation Fund.
Stakeholders seek just, administrative action.
Clause 43(4) seeks to ban the collective ability of third party cessionaries to hold the Fund accountable for Just Administrative Action.
The non-reactiveness of the Fund, despite numerous engagements, have left CompSol with no other choice but to engage in legal action to ensure that the Fund complies with it’s legal mandate.
Over the last few years, no less than 18 different Judges of the High Court have rejected all of the Funds’ defences – yet they persist with fruitless and wasteful expenditure every time they are taken to task.
In nine recent court cases the Fund presented 113 rejected invoice examples, under oath, directly out of CompEasy, as proof why those invoices will not be paid by the Fund. On investigation all 113 invoices were invalidly rejected. 85 (75%) of these rejections were because of CompEasy Software Problems and 28 rejections were because of the Fund’s staff decisions. CompSol noted that even the best employees cannot work with a broken system.
It must be kept in mind that CompSol only switches invoices after the Fund has accepted liability for the incident.
On 4 May 2020, Judge Constantinides made the following judgment: “This (Funds’ legal action) is a textbook example of the abuse of the Court process”
This is the fate that an individual practice will have to face if they want their invoices paid.
No legal action for fraud has ever been taken by the Compensation Fund against a third party cessionary.
CompSol noted that it was aware of legal action having been successfully instituted by the Fund against a third party administrator not offering a factoring or cession product.
Factoring means that the Medical Service Provider carries the full cost of the factoring agreement and there is no cost to the employer, injured worker of the Compensation Fund. Factoring only happens post patient treatment and does not prohibit any medico legal actions against the Medical Service Provider.
Benefits of factoring include injecting working capital into medical practices long before the Fund pays, ensuring the sustainability of these practices and willingness to treat injured workers. Newly-qualified doctors can establish their practices to treat injured workers by buying equipment and they will be sustained. Back to work protocols ensure minimum negative impact on the economy and employers have minimal downtown and are assisted in their effort to comply with the complex COID environment.
Inclusion of Clause 43(4) will have no impact on the non-cession third party administrators, and will not prevent past fraud and will deepen the problems at the Compensation Fund. Workers will be denied their rights, medical service providers will withdraw from treating IOD patients, employers will not receive what they’ve paid for and the Compensation Fund faces collapse and damaging of the economy.
Mr Tudhope addressed the Committee on the technicalities of Ceding – what it does and does not do.
He showed amendment of Clause 43(4) of Section 73 of the Principal Act
He also referred to the Memorandum on the Objects of the Compensation for Occupational Injuries and Disease Amendment Bill, 2020
It is noted that no further analyses has been provided by the drafter of the Bill in relation to the Memorandum of Objects so there is no more information relating to the reason for the introduction of clause 43(4) in the Bill itself.
Mr Tudhope then referred to the Socio-Economic Impact Assessment, concluded in May 2015 and only signed off by the Department of Planning, Monitoring and Evaluation on 2 August 2019, noting it was completely in a very short time of two months for matter this complex.
The SEIAS only noted one specific section relating to cession and it specifies three reasons why this requirement is being brought into the Act: Service Providers should submit claims directly to the Fund, it wants to reduce fraud and corruption by third parties who buy claims from Doctors and it wants the Fund to deal directly with businesses by eliminating third parties.
Unfortunately, there was no consultation with third parties in the SEIAS, neither cessionaries nor administrators. The private healthcare sector was also not consulted. The National Department of Health was consulted however, this was specifically in relation to national health insurance and there were no consultations done on registered credit providers, registered banks, factoring houses or other financial institutions.
Clause 43 was not included in presentation to Committee on 4 November 2020 – when the Bill was introduced – and was one of the only Clauses not dealt with on 4 November 2020.
Mr Tudhope also quoted an extract from the Committee’s report dated 10 June 2020 whereby the Director-General was noted as stating that the purpose of the Bill is to eliminate having to deal with third parties.
Mr Tudhope continued to explain the words “cede” or “purports to cede” as mentioned in Clause 43:
He further explained the “rights” that can be transferred or ceded for an invoice (or medical claim): ownership of the invoice, to be paid by the debtor (in this case the Compensation Fund) and the right to take legal action against the fund or the debtor (locus standi term used earlier) which allows oneto take Fund to court because one owns the account.
Mr Tudhope went on to explain what cession does not do: prevent the Compensation Fund from interacting with its clients, does not cause or increase the risk of fraud, does not determine into whose bank account the monies need to be paid, impact any compensation benefits received by the injured employee, result in additional costs to the Compensation Fund and it does not violate any of the provisions of the Health Professions Act.
He made reference to various articles and statements including this one from the Financial Mail, dated 18 February 2021, where Mr Vuyo Mafata, Compensation Commissioner, said that the Fund does not have an issue with doctors using intermediaries to submit their claims and medical bills. The article continues to read that Mr Mafata also said that the amendment would not prohibit the use of third parties to submit claims on behalf of clients and beneficiaries: “Our processes do allow for this, provided the third party or agent can prove that they have been authorised to act on client’s behalf”.
The Committee was referred to the Executive Committee of the Medical and Dental Professions Board of the Health Professions Council of South Africa, that resolved in December 2002, that it would be permissible for book debts to be ceded to financial institutions other than banks.
Mr Tudhope then addressed the difference between internal controls and legislative amendments
Clause 43(4) does not prohibit “third parties” to work with the Fund and sufficient and appropriate authorisation should always be obtained when working with the Fund.
He noted that due to the risks at the Fund, as noted in its own annual report and 2021/2022 annual performance plan, these risks should be dealt with using a combination of preventative, detective and corrective controls of a general and application nature
Mr Tudhope noted that control environment was a weakness in the Fund’s own SWOT analysis per of its annual performance plan.
Banning third-party aggregators, like CompSol, would prevent the ownership/transfer of medical invoices/claims which is unconstitutional as it violates the right to property and the right to freedom of trade. This would also prevent legal action from being instituted against the Compensation Fund. Mr Tudhope handed over to Ms Mirieke Vermaak, who would deal with the constitutionality and legal matters.
Ms Vermaak started off by pointing out the three constitutional rights, affected by Clause 43(4): The Right to Property (Section 25), the Right to Freedom of Trade, occupation and profession (Section 22) and the Right of Access to Courts (Section 34).
She explained that medical invoices (accounts) are the lifeblood of any practice and the surety required by financial institutions to secure working capital. Clause 43(4) will prevent medical service providers to use their invoices as collateral for financing of working capital which infringes on their rights to property.
Ms Vermaak quoted Reflect All 1025 CC v MEC for Public Transport, Roads and Works, Gauteng Provincial Government 2009 (6) SA 391 (CC) para 33
The idea is not to protect private property from all state interference but rather to safeguard it from illegitimate and unfair state interference.
Ms Vermaak further quoted Section 22 of the Act: “Every citizen has the right to choose their trade, occupation of profession freely. The practice of a trade, occupation or profession may be regulated by law.” Clause 43(4) intends to limit the Medical Service Provider with what they may do with their medical accounts for services they’ve already rendered. There is no justification for the limitation of Section 22 and no legitimate connection between the purposes identified in the Bill and the prohibition of the cession of medical accounts.
Section 34 of the Constitution was also quoted: “Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.” Clause 43(4) will prevent medical account cessionaries to access the courts andwill result in the Fund no longer being held judicially accountable, which will not be in the public’s interest. Legal challenges are important as they create pressure on all parties in the value chain to fulfil their mandate.
Ms Vermaak exclaimed that nothing has been proven to be in the public’s interest, no rationale has been found for Clause 43(4) and therefore there is no justification for the limitation of constitutional rights.
Mr Lüttich presented the Committee with CompSol’s closing by confirming that should Clause 43(4) be promulgated, there will be no benefits to South Africa’s stakeholders (employers, injured workers, unions, Medical Service Providers etc). It will prevent the aggregate legal action against the Fund to them accountable for their legal mandate.
On the other hand, if Clause 43(4) was not promulgated, there would be a host of benefits on both sides of the equations.
Dr M Cardo (DA) thanked CompSol for sharing its insights with regards to dealing with the Compensation Fund and noted that they indeed painted a very disturbing picture. CompSol was asked how many active legal cases it currently has against the Fund and what the combined value of the claims in dispute was and what would become of those claims in the event that Clause 43(4) is signed into law.
He confirmed that CompSol was not consulted about the Socio-Economic Impact Assessment, and agreed this was in poor form, but asked that CompSol elaborates on what the overall Socio-Economic Impact what the Bill in totally would be – not just 43(4).
Ms H Denner (FF+) asked CompSol if it planned to approach the court if Clause 43(4) is amended, as proposed in the current Amendment Bill, and what would the legal repercussions be for the Fund and the affected department if Clause 43(4) is indeed amended and lastly she asked CompSol’s opinion on the fact that the Fund repeatedly demonises third party Administrators, often blaming them for the shortcomings and problems at the Fund. She explains that the DG is on record, stating that sometimes third party Administrators employ ex Compensation Fund employees, who know the loopholes and how to manipulate the system, and that the complaints about the CompEasy system is because the Fund has “closed the taps” to prevent third party Administrators taking advantage of the system.
Mr M Bagraim (DA) applauded CompSol on a fantastic presentation. He referred to a slide in CompSol’s presentation that indicated that it does not cost the Fund any extra and that the patient does not lose anything. He asked CompSol to explain (and underline) this again as it seems that this is a fear of the Department and the Committee that the patient would lose out and that the Fund would somehow lose out but it appears very strongly from CompSol’s structure that the only person that loses a bit is the actual Service Provider or the hospital. He wanted the Committee to understand this fully.
Mr Bagraim noted that CompSol has indicated it delivers a service to 5 000 Medical Service Providers. If it cannot provide this service, has any of the 5 000 Medical Service Providers indicated to CompSol that they would stop dealing with Compensation Fund patients? –This was a big fear: that the worker/injured patient will not get the service they need and that would in turn put pressure on the public hospitals. He asked CompSol to comment on how much pressure this would put on the public medical service.
He also noted that CompSol mentioned it had factored almost R4.5billion and asked what CompSol’s comment was if it did not do this, what would have happened to the practices in the past? He asked what would happen to the over 400 staff members (mostly in the Eastern Cape), currently employed by CompSol, if this Clause had to be amended.
He made mention of the claims, worth R180million, that CompSol could not register (for various reasons) and asked if it did a proper survey of this and sent through the findings to the Fund, asking for the Fund’s comment.
Mr Bagraim explained that when legislation was changed, this was to make it more efficient or get rid of an evil. CompSol has shown today that the efficiency is purely the inefficiency of the Fund (the CompEasy system) and that it does not appear that the Fund is trying to get rid of any evil. It does, however, appear that the Fund purely wants to avoid litigation – it wnts to be inefficient but not be taken to task for it. He asked CompSol to comment on this statement.
It also appears that legislation wants to make this amendment retrospective and according to Mr Bagraim’s knowledge, something cannot be made null and void retrospectively, unless it was irregular in the first place. He asked if CompSol has done any research into retrospective legislation.
Mr Bagraim’s last question to CompSol was if any third party has ever been pointed out for committing fraud, especially those that are factoring.
Mr Lüttich, from CompSol, replied to Dr Cardo’s question by confirming that it currently has 18 active legal cases against the Compensation Fund totalling R85million.
CompSol explained that the impact of Clause 43(4) would be quite dire as it would lose its biggest asset which is approximately R700million worth of invoices that it has paid for, bought and own, and there will be ripple effects down the line, back to the Service Providers, in the sense that they will have to take their invoices back, refund CompSol and then start the legal fight, on their own, with the Compensation Fund, to get their accounts paid.
Mr Lüttich replied to Ms Denner’s question about CompSol approaching the courts if Clause 43(4) was amended - he indicated that CompSol indeed approach the courts in order to protect, not only its assets, but also the whole medical fraternity and the injury on duty patients, who are relying on CompSol’s involvement, to ensure that the process works. As indicated before, the numbers, assisted by CompSol to get the claims through the system, is staggering. Mr Lüttich reminded the Committee that the R180million worth of claims, that cannot get registered, are because of problems with the Fund’s software system, and while those claims are not getting paid, the patients are not receiving the necessary treatment i.e. wheelchairs or prosthesis, no death benefits are going to get paid out, employers are not getting paid so removing CompSol as cessionaries will be vast and this could lead to a massive collapse at the Compensation Fund and the fact remains that the very vulnerable, the person that has already suffered the trauma, is going to sit without help. He further indicated that to try and deal with the Fund is a massive problem.
Ms Denner’s question about the Fund “closing the tap” so that third party Administrators cannot take advantage of the system was also answered by Mr Lüttich - he explained that all users that make use of the CompEasy system has to log on with user credentials and passwords.
Mr Tudhope explained the difference between “closing the tap” on the administration and the Administrators vs. the cessionaries (funders). When the application systems were changed, that changes the controls and the processes that need to happen. This affects the Administrator, not the person funding. Clause 43(4) specifically relates to the financing or the cession of medical accounts.
Mr Lüttich confirmed that they have hired some of their ex-employees before, the last one being in 2002, so that would have no impact of influence anymore.
Mr Lüttich continued to Mr Bagraim’s question of the 5 000 Medical Service Providers- he noted that this is 5 000 individual Medical Service Providers, totalling about 1 800 practices of which many of these practices only treat IOD cases so if CompSol is no longer available to assist them and to prefund their practices, their cashflow will dry up and they will certainly go out of business. CompSol has a substantial amount of letters, from Medical Service Providers, in support of this Clause not being amended, confirming that they will go out of business and they will have to stop seeing IOD patients and will have to regenerate their practices to see only paying clients.
Mr Lüttich also confirmed that Mr Bagraim is correct in saying that if this Clause is amended, it will have a very negative impact on the 438 staff members working for CompSol as it will definitely have to retrench staff.
He explained that he has addressed the issue of the R180million worth of claims (equals to 62 000 individual claims) that cannot get registered on the Fund’s system. He also confirmed that CompSol has had many meetings with the Fund’s offices (locally and in Pretoria). The following example was given to the Committee - about a month ago, CompSol had a video conference with senior staff from the Fund, specifically about this R180 million and why one cannot get into the system, cant register, get a claim number and why claims were not adjudicated. A decision was made, in this meeting, that CompSol would send the Compensation Fund 200 sample cases (incidents – not invoices) - of those 200 cases only six have been registered in the past four weeks.
Mr Lüttich confirmed that no third party cessionary had even been taken to task for fraud. As far as CompSol was aware, the only prosecution ever done to a third party, was a non-cessionary third party.
Mr Tudhope referred to CompSol’s written submission (annexure B) whereit made reference to the non-cessionary third party Administrator, who was convicted of fraud by the Fund.
Ms Vermaak addressed the Committee on the issue of retrospective in terms of the legal - it is allowable in certain areas to have retroactive effect especially in the tax sector, however, CompSol was of contention that it is unconstitutional.
Mr Tudhope explained that the reason it was seen as permissible from a tax legislation perspective, is that it was announced by the Minister of Finance in the Budget Speech and it was provided to the public in the budget consultation documentation. The fact that the Tax Acts are promulgated, generally in November/December of the year that the Budget Speech is announced, did not in fact make it retro-active. Tax legislation was retrospective to the date of the Budget Speech as opposed to retro-active legislation which amends actions and opportunities one had no opportunity to change oneself. In this case, where the Clause refers to agreements that exist as at the date, CompSol and medical service providers are unable to change agreements that have been signed in the past and by including this section in that Act, as the Committee has it now, it would be retro-active, which is not allowed.
The Chairperson asked CompSol, regarding its statement that staff at the Fund were poorly trained, at what level this was.
Mr Lüttich replied that CompSol can see from the rejection error codes that are receivd from the staff at the Fund, for example: The Assessor or staff member at the Fund, who assessed a specific medical account, rejected the payment of that account because there was no pre-authorisation available, but then when in possession of that pre-authorisation – issued by the Fund –some reason, that specific staff member did not know where to look for it or did not bother to look for it, although it is on their system. CompSol was under the impression that the Fund’s staff members are lacking the ability to understand where to go onto the Fund’s system to find the information that is required to correctly access an account before they invalidly reject such accounts.
The Chairperson asked Mr Lüttich if it is correct to paint all staff, at the Compensation Fund, with one brush as he used the word “staff” which means from the Commissioner right down. She also wanted clarification on the “level” training was needed i.e. locally or at Head Office level. She explained that she is asking this question because there are Labour Centres in each town but that the Head Office is in Pretoria.
Mr Lüttich explained that training is needed on all levels but not all staff noting that even the best employees cannot work with a broken system. He further said that it was unfair to project the problems they faced every day, on the staff alone. As mentioned before, 75% of the problems exist because of the system that is firstly not an emergency medical system – it was designed to be an asset-based, short term, insurance system that the Fund is trying to bend into shape for medical purposes. Mr Lüttich also referred to the one slide in the CompSolpresentation that gives a breakdown of the various Labour Centres, indicating that some Centres are not as bad as others.
Mr M Nontsele (ANC) noted the presentation made by CompSol and asked whether CompSol has taken the matters, raised in this Committee, relating to performance and challenges with the system, directly to the Fund?
Mr Lüttich showed the Committee a printed copy of an electronic document, compiled in 2020, with screen prints of the Fund’s system on this document, giving detailed explanations of all the errors on the Fund’s system. Currently this document consisted of 48 pages of errors. This document has been submitted over and over again to the Commissioner and operational staff. The same errors have still not been resolved and CompSol has added new errors to this document in term of incorrect injections.
The Chairperson asked CompSol for clarity that should Clause 43(4) be approved as suggested, if that meant that they would have to “close shop”.
Mr Lüttich explained that their clients, the Medical Service Providers, will no longer have the working capital to proceed running their practices, however, the CompSol business would not close but it’s product offering would need to change
Socio-Economic Rights Institute (SERI) submission
Ms Kelegogile Khunou, SERI Researcher, said SERI welcomed the inclusion of domestic workers in private households under the definition of “employee” in the COIDA Bill in light of the Constitutional Court judgment in the Mahlangu v Minister of Labour matter handed down on 19 November 2020. The inclusion of domestic workers was a victory for gender equality. She gave a brief background on what SERI does.
Ms Khunou said SERI’s interest in the COID Amendment Bill is to ensure that domestic workers, as a class of employees, are sufficiently protected and that the Constitutional Court judgment in Mahlangu v Minister of Labour is fully complied with. SERI’s concern is that the order directs the Compensation Fund to accept retrospective claims from domestic workers. However, Chapter V of the Act does not allow for retrospective claims from domestic workers to be processed. A retrospective compensation claim for the death of Maria Mahlangu submitted by SERI revealed problems in sections 38, 39, 41, and 44 of the COID Act. These sections make processing a retrospective claim impossible:
Section 38: Notice of accident by an employee to employer
The requirement by employees to file a notice of the accident to employers would lead to failure if the proof of filing is not seen.
Section 39: Notice of accident by the employer to the Commissioner
The requirement for employers to file a notice of the accident to the Commissioner would lead to failure if the proof of filing is not seen. The scheme that works is for the DEL to make provision for domestic workers with retrospective claims.
Section 41: Particulars of claim
The difficulty with section 41 is that it provides for particulars of claim to be provided by claiming employees when requested to do so. The particulars intended are medical reports and domestic workers intending to bring retrospective claims may not be in a position to provide such particulars. SERI submits that other forms/types of particulars to prove retrospective claims should be considered, including affidavits and/or witness testimonies.
Section 44: Prescription
This section states that the right to benefits in terms of the Act will lapse if the accident is not brought to the attention of the Commissioner, the employer, or mutual association concerned, within three years from date of accident. The Amendment Bill extends the timeframe from 12 months to three years. However, this extension remains disadvantageous to domestic workers submitting retrospective claims. SERI submits that a mechanism must be put in place to enable the Fund to process retrospective claims from domestic workers.
Ms Khunou said that there had been widespread non-compliance and challenges to enforcing the law for domestic workers
A mechanism must be put in place to enable the Fund to process retrospective claims from domestic workers. The DEL should consider withdrawing the Bill in its entirety due to settling retrospective claims. This is because when the COIDA Bill was drafted, the Constitutional Court judgment had not been made. Alternatively, it must find a way to validate the claims dating more than three years. Also, no claims should be rejected because it looks cumbersome or the proof is queried. DEL should promote occupational safety and health practices in the domestic work environment, create incentives for employers of domestic workers to register and contribute to the Compensation Fund, strengthen its enforcement mechanisms in the domestic work sector, issue an internal directive educating DEL officials about the inclusion of domestic workers into COIDA, issue a directive to guide employers of domestic workers about COIDA and, finally, launch a public awareness campaign about the COIDA Bill.
Mr Bagraim welcomed the submission and asked if the COIDA Bill could be re-drafted for retrospective claims instead of withdrawn. He agreed with SERI that domestic workers had difficulties with registration on CompEasy. He asked SERI to comment on the fact that domestic workers were afraid of approaching employers to register them on CompEasy. He asked if SERI could redraft the clauses that assist domestic workers in getting health and safety treatment. He asked SERI to comment on inspectors who could check on the workspace of domestic workers.
Ms Khunou agreed that domestic workers were vulnerable and fearful of asking employers to register them on CompEasy. She said it was not only South African domestic workers that were challenged in claiming health and safety law rights. SERI believes that in redrafting the relevant sections in the COIDA Bill, DEL should include a section on retrospective claims and ensure that employers of domestic workers be brought into the engagement as stakeholders. Also, public awareness campaigns were needed where the value that domestic workers bring is reiterated.
Adv Thulani Nkosi, SERI Senior Attorney, said SERI would like to contribute by redrafting the sections make processing a retrospective claim impossible.
The Chairperson appreciated SERI’s submission and accepted its suggestion to provide a redraft of the sections that were of concern.
Mr Matthew Parks, COSATU Deputy Parliamentary Coordinator, said COSATU supported the COIDA Bill in the areas of compensation, expanded definition of dependents, and inclusion of domestic workers under Compensation Fund coverage. COSATU welcomes the inclusion of post-traumatic stress disorder and the inclusion of cover for diseases resulting from the workplace. It supports the provisions setting out board membership and NEDLAC’s role in facilitating nominations from organised labour and business, and the introduction of the no fault rule when determining compensation.
COSATU welcomes the inclusion of all medical costs, constant attendance care allowance and funeral costs as most workers do not have medical aid; and medical aids frequently exclude significant costs from coverage. This inclusion will assist many workers with unforeseen and often unaffordable costs at a moment of distress or the loss of a breadwinner for a family.
COSATU welcomes the extension of time to submit claims from 12 months to three years and the additional time of six months to make objections. COSATU welcomed the clause allowing claims to be made for road accidents during work, appreciated the role of lawyers in complicated submissions, supported the inclusion of contractors and sub-contractors with appropriate responsibilities, and the provision of incentives for progressive law-abiding employers.
Proposed Amendments to COIDA Bill
COSATU proposed amendments to the COIDA Bill on the need to guarantee workers the right to rehabilitation and the setting of strict conditions for the issuance of licenses to carry on the business of insurance.
Right to Rehabilitation (Section 70A)
Unfortunately, section 70A as drafted undermines the clear purpose of the amendments to provide for the right to rehabilitation by the Constitution and South Africa’s international obligations. Section 70A gives the discretion to provide rehabilitation rather than imposing an obligation to do so. Section 70A(2)(b) also restricts the concept of rehabilitation to an employee returning to their previous employment. Hence COSATU proposes that ‘may’ be deleted and substituted with ‘must” in Section 70A(1) and also remove ‘their’ so that the phrase reads ‘return to work’.
Issuing of Licences to Carry on Business of Insurance (Section 30)
COSATU believes that licenses should only be issued to organisations subject to the control of a board consisting of an equal number of representatives of employers and registered trade unions. This would be in line with the composition of pension fund boards, and the Bill needs to include provisions to ensure awarding of claims be monitored. This would ensure that the rights of employees are not undermined, and there are transparent and fair procedures for objections and appeals against decisions. COSATU proposes amendment of section 30(7) to address these concerns: ‘any licensee issued with a license in terms of this Act shall (a) be accountable to the Minister, (b) be under the control of a Board consisting half of the members representing organized labour and half of the members representing business; (c) comply with any conditions determined by the Minister or as may be prescribed, and (d) conduct their business transparently and in a manner that gives full effect to the rights of employees and their dependents under this Act.”
In conclusion, COSATU supports the COIDA Bill as it is progressive and would assist in seeking to address gaps in the Act. It reminded the Committee to consider its two proposed amendments to strengthen and clarify the right to rehabilitation and the licensing provisions. COSATU urged Parliament to prioritise, strengthen and pass this progressive Bill as soon as possible.
There were no questions and the Chairperson remarked that the Committee would consider the submission.
Adv Hanlie Van Vuuren said Solidarity represented the ordinary workers who had sustained occupational injuries and diseases at work. She observed that the Act was complicated for ordinary employees to know their rights and responsibilities. Compensation for occupational injuries and diseases falls under Section 27(1)c of the Constitution; hence compensation should be on certain principles. The principles are that it should not be complicated, easily understandable, and not ambiguous, not open to conflicting interpretations, apply the no-fault principle because of the interest of the employer, employee and the state.
Solidarity opposes the removal of the word "accident" and substitution with “incident or occurrence” because no specific definition of “incident” or “occurrence” has been included in the COIDA Bill which leaves one with the definition of "incident" in the Occupational Health and Safety (OHSA) Act and Section 24 of OHSA requires an "incident" only to be reported in very specific circumstances that differ significantly from the requirements for reporting in COIDA. Solidarity has observed that employers did not always report accidents as required by the law and introducing a limiting definition, may increase such challenges. OHSA only requires reporting if the employee died, became unconscious, lost a limb, or was off duty for more than 14 days. The definition of "accident" in OHSA is the same as the current definition of "accident" in COIDA which defines "accident" as arising out of and in the course of an employee's employment and resulting in a personal injury, illness or the death of the employee. Hence the proposed amendment will create confusion in reporting of occupational accidents and diseases and will be measured against the provisions of Section 24 of OHSA. This would be detrimental to employees because not all occupational injuries and diseases are duly reported, and this would lead to further obstacles in the reporting of occupational injuries and diseases.
Solidarity recommends an amendment in the definition of "accident" by substituting the word "and” with the word "or" in the definition. Further, to improve certainty on pre-existing conditions, including the words: "recurrence, relapse or aggravation": Hence, ‘an accident arises out of and in the course of an employee's employment and resulting in a personal injury, illness or the death of the employee” to ensure that the definition read "an accident arising out of or in the course of an employee's employment and resulting in a personal injury, illness or the death of the employee and includes a recurrence, relapse or aggravation".
Section 22 of Principal Act "Right of employee to compensation"
Although no amendments have been proposed to Section 22(2) of the Act, Solidarity proposes that the periodical payments shall be made for temporary total disablement from day one. It is unacceptable that employees have to sacrifice up to and inclusive of three days of their limited number of allocated sick leave for an injury on duty.
Clause 15 "Special circumstances in which Commissioner may refuse award"
Section 16 of the Principal Act places an employee under an obligation to divulge confidential health conditions to employers to which an employer is not entitled. For instance, is it correct to expect an employee to divulge HIV/AIDS when an occupational injury or disease is contracted? The element of "unreasonably refusing" in the Amendment Bill is unclear, for instance: who is to decide what "medical aid" or "rehabilitation programs" are acceptable? Medical aid treatment and rehabilitation programs differ from time to time due to the rapid change in scientific knowledge and treatment protocols. Some protocols which may at one time be acceptable may become controversial. Forcing employees to submit to specific treatment may constitute an infringement of the rights to privacy, dignity, and even life as provided for in the Bill of Rights in the Constitution. Further, different interpretations may be made due to the different mutual associations and the Compensation Fund interpreting this section differently. Therefore, Solidarity will only support this section if the human rights (privacy) of injured employees are respected and protected.
Clause 16 Amendment of "Mutual associations"
Solidarity is in principle against the demutualisation of the mutual associations because it will not be in the interest of employees if compensation is paid by an ordinary insurance company that is primarily aimed at making a profit. However, should demutualisation proceed, it proposes that strict terms and conditions are prescribed by law in the Act itself. The minimum requirement should be that such a company should be a non-profit organisation to prevent the exploitation of employees who are dependent upon compensation. The requirements for the composition of the licensee’s board should be similar to the requirement of the Compensation Fund board. All applications should be published in the Government Gazette with the terms and conditions of the licence agreement, sufficient time should be allocated for public comment and that awarded licences should be published in the Government Gazette, inclusive of the final licence agreement.
Clause 19 “Notification of accidents and claim for compensation
Solidarity is gravely concerned by the lack of processes and procedures available to employees to report their claims (a right recognised by our courts) and the failure by some employers to report claims for occupational injuries and diseases. Therefore, Solidarity requests that the Commissioner set down rules and provide the necessary forms and processes as well as access to electronic means to assist employees to report claims themselves to the Commissioner. Further, the proposed penalties should be levied, collected and paid over. If employees are allowed to report their occupational injuries and diseases, it will result in an improved system of control over the reporting of accidents because employers can then be held accountable.
The Chairperson asked Solidarity to confirm if its proposition on ‘accident’ and ‘incident’ would not confuse because accidents happen due to safety incidents that have occurred.
Adv van Vuuren replied the Solidarity was not proposing ‘incident’ but was merely giving a warning. ‘Incident’ was captured in the Occupational Health and Safety Act.
The Chairperson understood and asked if Members had any questions. As there were no questions, she thanked Solidarity for its submission. She announced the final day for public hearings on the COIDA Bill would be on 28 April 2021.
The meeting was adjourned.
Dunjwa, Ms ML
Bagraim, Mr M
Cardo, Dr MJ
Denner, Ms H
Hinana, Mr N
Nkabane, Dr NP
Nontsele, Mr M
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.