Circular 10 of 2026: Implementation of the Section 59 Final Investigation Report – Immediate Directives, Transitional Expectations, and Sector-Wide Corrections

This Circular communicates the CMS’ immediate regulatory expectations and collaborative industry obligations following the publication of the Final Section 59 Investigation Report, issued 7 July 2025. It also sets out transitional measures pending the development and adoption of the Universal Code of Conduct (UCC).

BACKGROUND AND CONTEXT
The Section 59 Investigation Final Report identified systemic disparities, procedural weaknesses, and disproportionate impacts arising from historic FWA (fraud, waste, abuse) processes, with several findings indicating that even where intent was disputed, outcomes reflected differential treatment between black and non‑black providers. The Panel emphasised that its purpose was not to apportion blame, but to ensure that future protection and realisation of constitutional aspirations guide corrective measures across the sector.

Given these findings, whether ultimately accepted or contested, the CMS believes the industry must avoid perpetuating practices highlighted as problematic while the sector works collaboratively toward long‑term systemic correction. This Circular, therefore, provides directives necessary to ensure stability, fairness, proportionality, and legality during this transition period.

LEGAL BASIS
• Section 7(a), 7(d), 7(e), 7(f) and 7(h) of the Medical Schemes Act (131 of 1998).
• Sections 44 and 66 of the Medical Schemes Act (131 of 1998).
• Sections 59(2)–(3) of the Medical Schemes Act (131 of 1998).
• Sections 3–4 of the Promotion of Administrative Justice Act (PAJA) (3 of 2000) (procedural fairness).

ENQUIRIES
Mr John Letsoalo – Senior Manager: Legal Services
Email: j.letsoalo@medicalschemes.co.za
Tel: 012 431 0451