Cimas Drags Company To Court

This post was originally published here

The long standing feud between Cimas, the country’s second-largest medical services provider, and fledgling medical services concern Corporate 24 will again be heard  in the court after the former filed summons claiming more than US$82 000.

According to court papers filed before the High Court, Cimas, which is being represented by Gill Godlonton and Gerrans, is claiming US$35 390 as damages for alleged claim irregularities spanning for a period of over eight years.

An additional US$46 565 is for reimbursement of the bill incurred by Cimas in commissioning an audit carried out by Grant Thornton Midrand.

Cimas also wants Corporate 24 to cover the cost of the suit.

“Plaintiffs’ claim against defendant is for payment of US$35 398 being damages suffered by plaintiff as a consequence of the defendants wrongful, unlawful and fraudulent conduct and a further amount of US$46 556 being the cost of the audit commissioned by the plaintiff in order to determine and quantify the loss suffered due to the defendant’s aforesaid conduct as appears more fully from plaintiff’s declaration hereto,” reads part of the summons filed on August 4.

In what could turn out to be another potentially bruising legal battle, Corporate 24, through its lawyers Musengi and Sigauke, has since registered its intention to defend.

The medical services provider, however, says it is owed in excess of US$500 000 in unpaid claims for services rendered to Cimas members and a further US$2,5 million it was prejudiced in potential revenue.

The two-year feud started when Cimas suspended Corporate 24 from the direct payment system around March 2015.

The latter resultantly reported to the regulator – the Permanent Secretary of Health and Child Care Dr Gerald Gwinji – for unfair and unlawful practices.

Despite Government efforts to mediate, the fallout continued.

In order to support its action, the medical aid provider handpicked South African-based Grant and Thornton to audit the contentious claims.

A draft audit was later compiled without the input of Corporate 24.

It was only after Government’s intervention that Corporate 24’s views were incorporated.

Sources told The Sunday Mail Business last week that neither the regulator nor Corporate 24 have been furnished with the final report to date.

Queries are also being raised on the veracity of the audit fee, which, at US$47 000, is markedly lower than the US$500 000 that was spent by Fidelity Life on its own audit, especially for an exercise that was conducted by a South African-based business.

Stakeholders in the medical insurance industry are increasingly pushing for the sector to be regulated by the Insurance and Pension Commission (Ipec).

In the current regulatory environment where some medical aid companies are not settling claims within stipulated times, hospitals are also getting the short end of the stick.

By end of last year, Zimbabwe’s three major health institutions – Harare, Parirenyatwa and United Bulawayo hospitals – were owed about US$10 million in unsettled claims. Since there are no minimum capital requirements in the medical aid business, the sector is open to weak participants.

Some sector players, it is claimed, are breaking the law with impunity; and allegations of corporate governance breaches abound.

However, Government is understood to be process of establishing a separate regulatory authority – the Medical Aid Regulatory Authority – that will superintend over the sector.

Its board is expected to be appointed this year if the enabling law as recommended by the Health Ministry is passed. – state media