Dear Ms Mjoli,

I am really making this difficult for you, but please again ignore my 2 previous emails (15h37 and 15h33) and the attachments thereto.

The attachment to this email will be the absolute FINAL document and represents the written submission on behalf of Alexander Forbes Compensation Technologies with regard to the Road

Accident Fund Amendment Bill, 2004.

I apologise for the inconvenience.

Kind regards

Adv Johan Hattingh

Alexander Forbes Compensation Technologies (Pty) Ltd

SUBMISSION TO PARLIAMENT'S PORTFOLIO COMMITTEE ON TRANSPORT WITH REGARD TO THE ROAD ACCIDENT FUND AMENDMENT BILL, 2004 BY ALEXANDER FORBES COMPENSATION TECHNOLOGIES (PTY) LTD

• Alexander Forbes Compensation Technologies (Pty) Ltd ("AFCT") is a subsidiary of Alexander Forbes Risk Services, a division of Alexander Forbes Group.
• AFCT, through its own operating divisions A-FACT and AVU, focuses on providing risk management to suppliers of medical services to MVA victims and administrative support in the recovery of payment for services so rendered from the Road Accident Fund.
• This service was introduced during 1999 and is currently provided on a national basis and to both the public and private healthcare sectors.
• It is against this background that AFCT provides its submission on the RAF Amendment Bill, 2004, which comment will be restricted to matters of interest from a healthcare risk management perspective.
• -Please note that another operating division within the Alexander Forbes stable, i.e. Alexander Forbes Health Care Consultants, has presented a separate submission focusing on insurance concerns.

COMMENT ON PROPOSED AMENDMENTS

1.1. The Bill proposes that payment for services to be effected directly to the supplier, yet subject to the RAF prescribed tariff [section 17 (4A)].

1.2. AFCT supports the direct payment adjustment, but with reservations relating to the prescribed tariff as set out hereunder.

1.3. A further concern, however, is that a significant number of undertakings issued by the RAF, are never being utilised. (According to RAF, an analysis revealed that from 1 May 1998 to 31 January 1999, 88.8% of undertakings were dormant.)

1.4. One should therefore consider the reasons for the apparent inability of MVA victims to access subsequent and ongoing medical services despite being in benefit of an undertaking.

1.5. In our opinion the following could be reasons for the low utilisation ratio:

1.5.1. The current limitation defined by the Act namely the requirement that the victim first incur the liability vis-a-vis the supplier and thereafter claim recovery of payment from the RAF.

] .5.2. The practice of issuing "apportioned" undertakings, which requires the victim on each occasion to contribute own resources to and any shortfall.

1.6. While the first concern will be addressed by the proposed amendment (that is by effectively giving the supplier the right to pursue payment by the RAF), the second obstacle will continue to put the utilisation of undertaking benefits out of reach for impecunious victims.

1.7. A practical solution could be to -

1.7.1. convert all existing "apportioned" undertakings to 100%, yet limited in value; and

1.7.2. going forward, to accommodate the effect of apportionment based on fault by applying the formula: future medical costs x apportionment = maximum compensation available to be accessed by way of undertaking.

2. W.r.t. section 17(4A) of the Act - Tariffs applicable to undertakings [section 17(4)(a)] and emergency medical treatment [section 17(7)]:

2.1. The Bill proposes that certain prescribed tariffs be applicable to undertakings for future medical treatment and emergency medical treatment, and NOT to any other claim submitted in accordance with section 17(5).

2.2. AFCT associates itself with the views and concerns expressed by HASA and SAMA with regard to the prescribed tariffs proposed in section 17(4A).

2.3. AFCT further wishes to remind the Committee of the contingencies to be considered when any reasonable remuneration structure is to be considered, namely:

2.3.1. The supplier's claim is qualified and subject to the inherent risks of the MVA victim, i.e. repudiation, apportionment and/or statutory Imitations (as is currently the position).

2.3.2. The elaborate administration and management occasioned by the statutory defined claims process.

2.3.3. Extended and uncontrollable payment cycles.

3. W.r.t. section 17(7) of the Act • "Emergency medical treatment" :

3.1. AFCT generally supports the limited no-fault application with regard to "emergency medical treatment", however again with reservations relating to the section 17(4A) prescribed tariffs.

3.2. For obvious reasons this process should however be strictly managed to avoid fraudulent abuse. In our opinion it will require extensive ability to record accident/victim data in real-time and early verification of MVA everts os well as validation of entitlement to no-fault benefits.

4. W.r.t. section 18(1) of the Act - Abandoning of "limited claims" concept:

4.1. This amendment is equitable and laudable.

ALEXANDER FORBES COMPENSATION TECHNOLOGIES (PTY) L

11February 7005