Discovery took the unusual step of calling a media conference today to launch a scathing attack on the large “ambulance chasing” legal firm run by Ronald Bobroff. In this interview at Biznews today, Discovery Health’s CEO Dr Jonathan Broomberg explains why he is coming out against Bobroff with all guns blazing – and explains that millions of South Africans with Discovery medical policies don’t need ambulance chasers as they are automatically covered for accident expenses. – AH
ALEC HOGG: We have Dr Jonathan Broomberg, the Chief Executive of Discovery Health in the studio. You’ve just come from a press conference where you have spoken about a gentleman called Ronald Bobroff.
JONNY BROOMBERG: That’s right.
ALEC HOGG: There’s been quite a bit of media attention to Mr Bobroff and his claims against Discovery but it’s unusual for anyone to come out publicly like you have to address an issue like this. Has he gotten under your skin?
JONNY BROOMBERG: Not at all. I think that what he has done is made some of our members concerned about whether their Road Accident claims – Motor Vehicle Accident claims – are going to be paid by the Discovery Health Medical Scheme. We want to be very, very clear with our members that all of those claims will always be paid – no questions asked.
ALEC HOGG: So that’s the key part of it. Just to go back, who is this guy?
JONNY BROOMBERG: He is a Personal Injury attorney.
ALEC HOGG:Â An ambulance chaser?
JONNY BROOMBERG: I wouldn’t use the word.
ALEC HOGG: I would use it but in the vernacular, that’s pretty much what people call them. You have an accident. Somebody comes along, gives you their card, and says ‘I’ll get money for you’.
JONNY BROOMBERG: Right. They key issue here Alec, is that all Medical Schemes in the country always pay immediately when any of their members are involved in an accident, so that’s ‘no questions asked’. Just to let you know, Discovery has paid over 25,000 claims since 2006, for members injured in road accidents – almost R2bn has been paid.
ALEC HOGG: How many claims have you not paid?
JONNY BROOMBERG: None. Every single one is paid.
ALEC HOGG: So even if a guy is driving under the influence, has an accident, and goes to hospital, you’ll pay?
JONNY BROOMBERG: No questions asked. Those are paid within three to five days with no questions asked. What’s under debate here is the relationship between that and the submission of claims by members, to the Road Accident Fund. Mr Bobroff claims that Discovery forces its members to submit a claim to the Road Accident Fund and that, unless they do that, the Medical Scheme will not pay their claims. We’ve been at pains to point out that this is absolute nonsense. Discovery never forces anybody to claim from the Road Accident Fund. Mr Bobroff is right in that dating back to 2000 the Rules of the Discovery Health Medical Scheme do contain a clause. It derives from the model rules that the regulator published for all Medical Schemes at the time, and that clause does say ‘members are required to submit a claim to the Road Accident Fund’. Discovery Health Medical Scheme has not ever enforced that provision.
ALEC HOGG: So it’s in your rules because it has to be there.
JONNY BROOMBERG: Because it had to be there in 2000…
ALEC HOGG: Have you taken it out?
JONNY BROOMBERG: The Trustees are reviewing whether to change the language or to remove it completely.
ALEC HOGG: But he’s also been accusing you of working with Tony Beamish, who’s an investigative reporter. Is that true?
JONNY BROOMBERG: It’s absolute nonsense.
ALEC HOGG: Do you know Beamish?
JONNY BROOMBERG: I met him today, for the first time, at the press conference.
ALEC HOGG: Do any of your colleagues know him?
JONNY BROOMBERG: I think that some of my colleagues have been interviewed by him on this matter. However, the key issue that people are missing here is that Mr Bobroff’s practice has now lost five separate court actions brought by former clients, in which the Supreme Court, the Supreme Court of Appeal, and the Constitutional Court have found that the method that practice uses of charging clients on contingency is unlawful.
ALEC HOGG: I guess that’s really, where all of this becomes more important for a broader audience.
JONNY BROOMBERG: Exactly.
ALEC HOGG: The Road Accident Fund (we know) is not ideally managed at the moment and there are ambulance-chasing attorneys…some of them in fact, appearing on television quite often, saying ‘if you have an accident, come to me. I’ll make money back for you’.
JONNY BROOMBERG: Correct.
ALEC HOGG: Are you trying to focus attention on the Road Accident Fund and get it sorted out?
JONNY BROOMBERG: The Road Accident Fund itself, today, is under excellent new management and operations have turned around very impressively. What we’re focusing on here is the following: certain legal practices unlawfully overcharge their clients and keep between 40 and 50 percent of the pay out from the Road Accident Fund rather than a much lower amount, which the courts have said they can lawfully charge.
ALEC HOGG: How much may they charge?
JONNY BROOMBERG: It’s very simple. They may charge 25 percent of the total pay out from the Road Accident Fund or double their hourly fee whichever is the lower.
ALEC HOGG: All right, so there is a set amount.
JONNY BROOMBERG: There’s a set amount.
ALEC HOGG: Is this what Bobroff has been doing – overcharging?
JONNY BROOMBERG: So far, the courts have found that in the four cases that have been determined, and the courts have ordered his practice to refund millions to those individual clients. Now, if you multiply that by the thousands of clients that have gone through that and similar practices, I think you get a sense of what’s at stake here.
ALEC HOGG: But why are you standing up for it? Why is Discovery taking this guy on? Surely, the Road Accident Fund itself should be doing it.
JONNY BROOMBERG: It’s very simple. When any practice keeps significantly more back than is due to the client, two parties are injured there. Those individual clients who are also our Medical Scheme members are out of pocket, often to the tune of hundreds of thousands or millions of Rand that is due to them. These are often severe accident victims whose lives have been destroyed and we believe that it’s part of our duty to stand up for them, so that’s part of the motivation. The second, Alec, is that when the Road Accident Fund does pay out to a claimant some element of medical expense, where the Medical Scheme has already paid those to a hospital or a doctor, the Rules of the Scheme are clear. In that case, the member must refund the medical expenses back to the Scheme.
ALEC HOGG: Do they?
JONNY BROOMBERG: Most of them do. We work with 1100 other attorney firms and we’re not aware of any issues with those, so you have one particular problem area here. Just to finish my previous point, the other reason that we’re very interested in this is that when the lawyer keeps too much of the money back, the Medical Scheme doesn’t get what’s due back to it. Over the period I mentioned before in which R2bn worth of claims have been paid out on behalf of these members to hospitals and doctors, the Scheme has recovered about R350m. Let’s say it’s 15 percent of the total amount paid out from members and their attorneys paying back what’s lawfully due to the Medical Scheme.
ALEC HOGG: You say the Road Accident Fund is now under better management. How has it improved?
JONNY BROOMBERG: The new CEO is Eugene Watson. He used to be the Principal Officer of the Government Employees’ Medical Scheme and the impression I have is that the operational efficiency, the engagement with the public and claimants, and the speed of claims pay outs has turned around dramatically.
ALEC HOGG: So you don’t need a Bobroff anymore if you have an efficient Road Accident Fund.
JONNY BROOMBERG: I think the intention (as I understand) with the Road Accident legislation is to move towards a ‘no fault’ type of system as you have in many other countries in which case, you truly would no longer need lawyers.
ALEC HOGG: How does it work?
JONNY BROOMBERG: That works simply in that it’s assumed that nobody is at fault. There is expert determination of amounts that need to be paid out and you don’t have long litigation in which lawyers are suing the Fund to determine who was at fault and what should be owed.
ALEC HOGG: But if that comes in then quite a few people are going to be losing quite a lot of money, particularly those in the ambulance chasing fraternity.
JONNY BROOMBERG: That’s correct, and one of the adjustments we’ve already seen, very unfortunately, is that many of those attorneys are now going after doctors in clinical malpractice litigation and advertising services to members of the public, saying ‘we’ll help you sue your doctor’. That’s a very unfortunate, unintended consequence of the tightening up of what’s going on in the Road Accident environment.
ALEC HOGG: So where does it all end? Where does it go from here?
JONNY BROOMBERG: Alec, I think that the one thing we’re really interested in is giving our members – and actually, for that matter, all Medical Scheme members – peace of mind that they will always be covered in the case of a car accident or any other kind of accident. If you’re with Discovery, no questions are asked. Those claims will be paid. If you elect to, you can then submit a claim to the Road Accident Fund. You do not have to. Beyond that, these cases are proceeding through the courts. At this stage, the High Court and the Supreme Court of Appeal have ordered the Law Society to inspect the books of account and the files of the Bobroff practice. The Bobroff practice has resisted that inspection to the point that it’s appealed to the Constitutional Court to stop that inspection, and it does beg the question of what’s being hidden.
If there’s nothing going on…if there are no problems with how charges have been levied to clients, why not let the Law Society do its job and inspect the accounts.
ALEC HOGG: But you deal with 1100 firms, as you said earlier. There’s one firm that’s gotten under your skin. Why have you taken this unusual step of going for Bobroff? Are they really that bad? Are these real, rotten eggs in this society?
JONNY BROOMBERG: No, I don’t think that’s the point. I think that we’ve certainly come across other firms where these practices were going on. We’ve approached them. They’ve instantaneously agreed with us that they will change the way they bill and there has not been the kind of conflict and confrontation that we’ve had. We haven’t gone after that practice in particular. We’ve simply tried to regularise this entire set of arrangements and virtually every other practice has been very comfortable doing that.
ALEC HOGG: I’m a Discovery member. I get involved in an accident. I (my hospital expenses) will be paid out immediately. If I want to put a claim to the Road Accident Fund, I can. If they repay my medical expenses, I’m duty-bound to give it to you.
JONNY BROOMBERG: Yes.
ALEC HOGG: What if I don’t let you know that I’ve been repaid by them?
JONNY BROOMBERG: If you don’t let us know then we’ll never know.
ALEC HOGG: So it’s an honour system.
JONNY BROOMBERG: It’s an honour system. Many of the attorneys involved in this understand that they should and their clients should disclose this. Hence, the R350m that has come back to the Medical Scheme in the last few years. Many choose to do that. It seems to be a simple principle in that one should not benefit from double insurance. If the Medical Schemes pay, you shouldn’t get another payment and keep that in your pocket.
ALEC HOGG: But on the other hand, if I don’t claim from the Road Accident Fund then Discovery is out of pocket.
JONNY BROOMBERG: The Medical Scheme has done its job, which is to pay your claims. If you happen to claim from the Road Accident Fund and get a payment, the Scheme wants that money. If you don’t, then there’s no obligation.
ALEC HOGG: What is my incentive then, to claim from the Road Accident Fund if I’m just going to pass it straight back to you?
JONNY BROOMBERG: That’s a good question and it’s pretty simple. Almost always, these claims to the Road Accident Fund occur when there are much bigger things at stake than the medical expenses. In other words, there’s been a brain injury or permanent loss of ability to work, and so there’s a General Damages claim, which often far exceeds the medical expenses. In one case that we’ve been dealing with, the Road Accident Fund paid R6m to a Discovery Health member, of which R890, 000.00 was for medical expenses. The Scheme had spent R1m for that member on his medical expenses, so all the Scheme wanted was the R900.000.00 back. He still has R5m, less his legal fees for the General Damages, so that’s the incentive when there are bigger General Damages claims against the Road Accident Fund.
ALEC HOGG: Just to close off with, Bobroff and his cohorts appear to be crooks from everything you’ve told us here. They’ve been overcharging etcetera, and they’ve been found to be doing that by the courts. Is it not incumbent upon you to lay a criminal charge against them?
JONNY BROOMBERG: The key issue is really, that the courts have found that method of charging to be unlawful. It has been a matter of some legal debate and I’m not a lawyer Alec, so I don’t know whether having done that and with the courts having now found that, that method of charging is illegal or unlawful…. I’m not sure if that then leads to criminal charges but certainly, our main obligation has been to our members and to the Medical Scheme.
ALEC HOGG: But it’s fraud.
JONNY BROOMBERG: It is fraud. Certainly, to the extent that it continues, it is fraud.
