Compensation Fund makes U-turn on new regulations

The troubled Compensation Fund (CF) has yielded to pressure from the medical service providers (MSP) to withdraw its controversial new regulations published in the Government Gazette a fortnight ago to remove Section 43 of the Compensation for Occupational Injuries and Diseases (COID) Bill.

The new regulations published by the CF in the Government Gazette meant that the CF will no longer accept nominated bank accounts of agents, including third-party administrators for claims repayment. As of 30 September 2021, the Fund would only make payments into the bank accounts of medical service providers who provided the service to the injured worker.

According to COID Amendment Bill, Clause 43 would prohibit the cession of medical invoices by medical service providers (MSP) to any financial institutions or third-party administrators as collateral.

This meant that medical professionals would no longer be pre-funded by third-party administrators and would, if Clause 43 was promulgated, have to submit their claims directly to the CF for reimbursement.

However, the outcry by MSPs has led to the Fund to bow to its demand to have the Bill withdrawn at the last minute.

The Injured Workers’ Action Group (IWAG), which is a coalition of affected and concerned parties, has been at the forefront in calling for the removal of this “irrational and draconian“ section of the bill. Its spokesperson, Tim Hughes, said they have not yet received official communication from the CF confirming the withdrawal.

“No, we have not received any communication from the Department or Compensation Fund regarding its decision to remove the new regulation. However, we do understand that it is withdrawn for now, and will go out for public comment.

“We, therefore, remain concerned that the Department and the CF are trying to limit the role and operations of third party administrators, albeit through a back door, which will be to the detriment of medical service providers and ultimately to injured workers. The Department and Commissioner’s focus should be on rectifying the chaos and dysfunctionality which continue to plague the CF,” said Hughes.

CF spokesperson Themba Mdluli, who sounded defeated, did not want to elaborate on the sudden U-turn by the Fund. He only said the notice has been removed from the gazette. “Yes the notice has been withdrawn, the reason for the withdrawal of the notice is to ensure procedural compliance,” said Mdluli.

However, the Democratic Alliance (DA) member of the Portfolio Committee on Employment and Labour, Michael Cardo, said the committee was not informed of either the regulations gazetted on 10 September or the alleged decision to withdraw them.

“The regulations should never have been gazetted in the first place. It was a very cynical move on Minister (Thulas) Nxesi’s part to gazette them the day after Parliament went into recess for the local government election campaign. The National Assembly passed the COIDA Amendment Bill on 9 September.

“These regulations run counter to the spirit of deliberations that were held when the bill was being processed. The regulations are draconian and irrational. Minister Nxesi is trying to evade legislative oversight and scrutiny,” said Cardo.

“There are rumours that the notice has been withdrawn but the committee has received no official confirmation. Parliament is being kept in the dark. This is an abuse of executive power, and the DA will keep up the pressure for greater transparency. The DA fought hard in the committee for the right of third-party administrators to keep on transacting with the Compensation Fund. The Minister needs to explain exactly what is going on.”