Broke govt in Catch-22 over Psmas debt

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THE fate of the country’s largest medical aid society by numbers Premier Services Medical Aid Society (Psmas) continues to hang in the balance after the society failed to meet registration requirements due to delays by government in paying a US$200 million debt, the Zimbabwe Independent has learnt.

Hazel Ndebele

As part of registration requirements government requires that the maximum settlement period for the reimbursement by a medical aid society of expenses incurred in respect of medical or dental treatment by a member, the dependants of a member or any health care provider be 60 days from the date of the lodging of the claim.

Psmas has however been failing to effect claims payments to health care service providers resulting in most of its members being rejected by some health institutions.

The society has been failing to pay its employees on time for almost two years due to working capital constraints and has been operating without a licence, but at the mercy of government whose subscribers constitute the bulk of its members.

Some of the requirements needed for registration by the Health ministry include compliance of business plan, accounts and financial statements as well as returns.

The ministry sent a letter to all medical aid societies last month inviting them to renew their operating licences for the year 2016.

Psmas submitted its application for renewal of registration and is awaiting response despite falling foul of the registration requirements.

Information at hand shows that the cash-strapped government is in a Catch-22 situation on how to handle the Psmas issue.

Sources said on one hand government, which is the society’s largest debtor is keen to push Psmas to fully comply with the licensing requirements while on the other it has no capacity to service debts accrued from unpaid monthly subscriptions.
As a result, sources said, government has not sanctioned Psmas for failing to meet the requirements despite opening the registration window for other players.

“Government will not sanction Psmas for failing to meet the requirements needed for the registration of medical aid insurance companies and societies partly due to the fact that they are the biggest debtors to the medical aid society and yet they have the largest number of subscribers,” said a source familiar with the developments.

“Psmas is currently owed US$219 million in unpaid subscriptions by government and US$22 million by various organisations in the private sector, the total debt amounting to US$241 million.”

The debt has seen Psmas failing to run the society and failing to adhere to the constitution or rules of medical aid societies.

Contacted for comment Psmas chairman Jeremiah Bvirindi said he is optimistic the society will be fully registered after its licence lapsed two years ago.

“We have adopted turnaround strategies and Psmas is in a liquid position to be compliant,” he said.

Last year Psmas fired its managing director Henry Mandishona for, among other things, flouting corporate governance regulations resulting in financial loss to the institution, and unilaterally altering his contract of employment.

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