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[2011] ZAGPPHC 72
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Tshwane Pharmacy (Pty) Ltd v Government Employees Medical Scheme (28532/11) [2011] ZAGPPHC 72 (20 May 2011)
I
N
THE NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC OF SOUTH AFRICA)
Date: 2011-05-20
Case Number:
28532/11
REPORTABLE
In the matter between:
TSHWANE PHARMACY
(PTY) LTD
...................................................
Applicant
and
GOVERNMENT
EMPLOYEES MEDICAL SCHEME
......................
Respondent
JUDGMENT
SOUTHWOOD J
[1]
The
applicant applies as a matter of urgency for the following final
relief:
(1) An order that the respondent pay
to the applicant the sum of R197 683,18;
(2) An order that the respondent make
payment to the applicant directly and not to its members within 30
days on compliance with
all the following:
(i) the applicant has supplied goods
to the respondent’s members;
(ii) the applicant has obtained from
the respondent prior authorisation for the specific transaction.
[2] Since the
applicant seeks final relief on notice of motion and there are
disputes of fact on the affidavits the principles set
out in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A)
at
634F-635C must be applied. See also
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA)
para
26.
[3] The applicant conducts business as
a pharmacy. The respondent is a medical scheme registered in terms
of the Medical Schemes
Act 131 of 1998 (‘the Act’). The
respondent conducts its business subject to the provisions of the Act
and the rules
which it adopted. The respondent’s members are
current and retired government employees. The respondent’s
primary
responsibility is to assume liability for and guarantee
benefits to its members. The respondent can discharge its
obligations
to its members by reimbursing them for expenditure
incurred by them in respect of medical services and goods provided by
service
providers or by paying the service provider direct. In this
regard section 59 of the Act provides:
’59. Charges
by suppliers of service –
(1) A supplier of a
service who has rendered any service to a beneficiary in terms of
which an account has been rendered, shall,
notwithstanding the
provisions of any other law, furnish to the member concerned an
account or statement reflecting such particulars
as may be
prescribed;
(2) A medical scheme shall, in the
case where an account has been rendered, subject to the provisions of
this Act and the rules
of the medical scheme concerned, pay to a
member or a supplier of service, any benefit owing to that member or
supplier of service
within 30 days after the day on which the claim
in respect of such benefit was received by the medical scheme;
(3) Notwithstanding anything to the
contrary contained in any other law a medical scheme may, in the case
of –
(a) any amount
which has been paid
bona
fide
in
accordance with the provisions of this Act to which a member or a
supplier of health service is not entitled; or
(b) any loss which has been sustained
by the medical scheme through theft, fraud, negligence or any
misconduct which comes to the
notice of the medical scheme,
deduct such amount from any benefit
payable to such member or supplier of health service.’
[4] Consistent with
this section the respondent’s rules provide in rules 15 and 17:
’15. CLAIMS PROCEDURE
15.1 Every claim submitted to the
Scheme in respect of the rendering of a relevant health service as
contemplated in these Rules
must be accompanied by an account or
statement as prescribed from time to time.
15.2 If an account, statement or claim
is correct or where a corrected account, statement or claim is
received, as the case may
be, the Scheme must, in addition to the
payment contemplated in section 59(2) of the Act, despatch to the
Member a statement containing
at least the following particulars –
15.2.1 The name and the membership
number of the Member;
15.2.2 The name of the supplier of
service;
15.2.3 The final date of service
rendered by the supplier of service on the account or statement which
is covered by the payment;
15.2.4 The total amount charged for
the service concerned; and
15.2.5 The amount of the benefit
awarded for such service.
15.3 In order to qualify for benefits,
any claim must, unless otherwise arranged, be signed and certified as
correct and must be
submitted to the Scheme in any prescribed manner
as may be acceptable by the Scheme not later than the last day of the
fourth month
following the month in which the service was rendered.
15.4 Where a Member has paid a service
provider, he shall submit a claim for reimbursement and, in support
of his claim, he shall
submit a receipt.
15.5 If the Scheme is of the opinion
that an account, statement or claim is erroneous or unacceptable for
payment, the Scheme shall
notify the Member and the relevant
healthcare provider, within 30 days after receipt thereof and state
the reasons for such an
opinion. The Scheme shall afford such Member
and provider the opportunity to resubmit such corrected account or
statement to the
Scheme within sixty days following the date from
which it was returned for correction.
15.6 The Scheme shall suspend the
payment of a claim to a provider in the event of an investigation
pertaining to alleged fraudulent
activity, except where to do so in
particular circumstances would not be in the interests of the Scheme,
in the absolute discretion
of the Board.
15.7 The Scheme shall, where an
account has been received and subject to a member’s entitlement
in terms of his applicable
benefit option, pay the Scheme Rate in
respect of any benefit due to a Member, either to that Member or to
the supplier of the
relevant health service who rendered the account,
within 30 (thirty) days of receipt of the claim pertaining to such
benefit.’
and
’17. PAYMENT OF ACCOUNTS
17.1 Payment of accounts or
reimbursement of claims is restricted to the net amount payable in
respect of such benefit and maximum
amount of the benefit to which
the Member is entitled in terms of the Member’s Benefit Option.
17.2 Any discount whether on an
individual basis or bulk discount received in respect of a relevant
health service shall be for
the benefit of the Member in determining
the net amount payable for the service and appropriate deductions
shall be made from the
applicable benefit limit, or medical savings
account, as the case may be.
17.3 The Scheme may, pay any claim in
accordance with the Member’s Benefit Option, directly to the
supplier (or group of suppliers)
who rendered this service.
17.4 Where the Scheme has paid an
account or portion of an account or any benefit to which a Member is
not entitled, where the payment
is made to the Member or to the
supplier of service, the amount of any such overpayment is
recoverable by the Scheme, either from
the supplier, or the Member,
at the discretion of the Scheme.
17.5 Notwithstanding the provisions of
this rule, the Scheme has the right to pay any benefit directly to
the Member concerned.’
It is clear from
these rules that the respondent at all times retains a discretion
(and a right) to pay either the member or the
provider of the goods
or services directly.
[5] It is common
cause that from the time the respondent was registered in 2005 until
4 April 2011 the applicant has provided goods
to the respondent’s
members and recovered payment from the respondent therefor in
accordance with the following procedure:
(1) A member of respondent (‘the
member’) approaches the applicant with a doctor’s
prescription.
(2) The member furnishes his or her
membership card, containing the relevant membership number issued by
the respondent, to one
of the applicant’s pharmacists.
(3) A ‘claim’
is thereupon electronically submitted to the respondent. The claim
reflects
inter
alia
the
details of the patient, his or her membership number in respondent
and details of the medical practitioner such as his practice
number,
the medication prescribed and the price of the prescription.
(4) The respondent’s system
thereupon verifies that the relevant customer is in fact a member
with available funds as well
as the medical practitioner’s
registration.
(5) Authorisation is thereupon
electronically transmitted to the applicant to dispense the relevant
prescription together with an
authorisation number.
(6) On the strength of this
authorisation the applicant then dispenses the medicine to the member
without seeking payment from the
member directly. A hard copy of the
claim is filed in the applicant’s offices for audit purposes.
(7) A large number of claims is
submitted on a daily basis in respect of which the respondent effects
electronic payment every two
weeks.
As far as this procedure is concerned
the respondent says that as from 5 April 2011 the procedure described
was no longer followed
and this fact was conveyed to the applicant
electronically on a daily basis as a result of its history of
questionable claim submission
and the respondent’s concerns in
that regard; claims duly made were paid in accordance with the
respondent’s liability
to the member in question; mere
submission of a claim by a pharmacy would not oblige the respondent
to pay the applicant and thereby
exclude the respondent’s
discretion and the authorisation referred to by the applicant is
simply confirmation by the respondent
that the member in question is
a member in good standing and that it is liable to the member for all
or part of the relevant claim
and nothing more. It does not confirm
which portion of the claim will be paid (this depends on the member’s
benefits and
how much of these have been used) nor does it create a
debtor/creditor relationship between the applicant and the
respondent.
[6] In addition,
the respondent alleges that on 4 April 2011 it addressed a letter to
the applicant in which it advised the applicant
that henceforth the
respondent would pay its members for goods purchased from the
applicant and that every day after that the respondent
advised the
applicant by the following message on its computer screens:
‘Indirect payment has been implemented.’
The respondent
alleges and this is accepted by the applicant that since 4 April 2011
it has paid its members a total of R197 683,18.
The applicant
restricts its claim for payment to that amount.
[7] The applicant
claims relief on two bases:
(1) that it has a right to payment in
terms of section 59(2) of the Act; alternatively
(2) that it has a right to payment by
virtue of a tacit contract.
Interpretation
of section 59(2)
[8] It is submitted that the key
phrase in section 59(2) of the Act is ‘benefit owing to the
member or provider of the service’
and that on a common sense
interpretation of the section it means that where a member has not
paid the supplier of the service
the medical scheme has no discretion
but is obliged to pay the supplier. I do not agree.
[9] The subsection must be interpreted
in its context. Subsection (1) provides that a supplier of a service
who has rendered a
service is obliged to furnish the member concerned
with an account containing prescribed particulars. Subsection (2)
then provides
that when such an account has been rendered the medical
scheme may pay to the member or the supplier of the service the
benefit
owing to that member or supplier of the service. In the
context of the section the ‘benefit owing’ must refer to
the
amount owing by the member to the supplier for the service
rendered. It is irrelevant that the benefit becomes owing to the
member
by virtue of the agreement between the member and the medical
scheme and, to the supplier, by virtue of the agreement between the
member and the supplier. The subsection does not create an
obligation for the medical scheme to pay the supplier.
[10] In any event, the subsection
clearly provides that payment is subject to the rules of the medical
scheme which state unambiguously
that the respondent has the right to
pay either the member or the supplier of the service (rules 15.7,
17.3 and 17.5).
Tacit
agreement
[11] It is clear that the grant of the
relief sought depends upon a finding that a tacit contract came into
existence between the
applicant and the respondent in terms of which
the applicant would be entitled to payment for goods supplied by the
applicant on
the authority of the respondent.
[12
] The
applicant contends that a tacit agreement must be found in the light
of the facts which are common cause relating to the procedure
followed for payment up to 4 April 2011. The applicant referred to
the ‘no other reasonable interpretation test’ formulated
in
Standard
Bank of South Africa Ltd v Ocean Commodities Inc
1983
(1) SA 276
(A)
at
292 and the ‘preponderance of probability test’
formulated in
Joel
Melamed and Herwitz v Cleveland Estates (Pty) Ltd
[1984] ZASCA 4
;
1984
(3) SA 155
(A)
at
164 and the synthesis suggested by the learned author of
The
Law of Contract in South Africa
RH
Christie 5 ed
at 85 and following.
[13] The applicant
is faced with two difficulties. The first is that the terms of the
tacit agreement are not alleged in the applicant’s
affidavits.
The second is that to find the tacit agreement contended for would
require a finding that the respondent abandoned
its right to pay the
member which is contained in section 59(2) of the Act and the rules.
In my view both difficulties are insurmountable.
[14
] It
is trite that the affidavits in motion proceedings contain both the
pleadings and the evidence. It is equally trite that a
party
alleging a contract must set out the terms of the contract on which
he relies. This has not been done and it does not assist
the
applicant that the procedure described in the affidavit does not
tally with the relief sought in prayer 3 of the notice of
motion.
[15
] As
far as inferring a tacit contract from the facts is concerned, the
court is required to take all the facts into account. These
facts
include the provisions of the Act and the rules which have been
referred to which reserve to the respondent the right to
pay the
member for the service supplied and the respondent’s own
reliance on that right. The Act and the rules make provision
for a
flexible procedure whereby the need for the member to pay the
supplier of the service and then obtain reimbursement from
the
medical scheme is rendered unnecessary. This allows for a quick and
efficient provision of services. But that is a far cry
from entering
into an agreement where the medical scheme is bound to pay the
supplier simply because it has confirmed that it will
be responsible
to the member for the service to be provided. The respondent
obviously did not consider that it had given up that
right and gave
notice to the applicant on the 4
th
of April 2011 and thereafter every day. It therefore cannot be
found that a tacit agreement was entered into.
[16
] The
application is dismissed with costs.
____________________
B.R. SOUTHWOOD
JUDGE OF THE HIGH COURT
CASE NO:
28532/11
HEARD
ON: 19 May 2011
FOR
THE APPLICANT: ADV. F.J. ERASMUS
INSTRUCTED
BY: J.S. Grobler of Cilliers & Reynders Attorneys
FOR
THE RESPONDENT: ADV. N. JELE
INSTRUCTED
BY: T. Malatji of Gildenhuys Lessing Malatji
DATE
OF JUDGMENT: 20 May 2011