PSMAS hit by liquidity crunch

PREMIER Service Medical Aid Society (PSMAS) has directed medical doctors to stop providing services to its members citing a severe liquidity crunch.

The society, which is one of the largest health insurance organisations in the country, says it is experiencing a serious liquidity crunch that has made it difficult to meet its financial obligations.

This is despite the fact that the medical society continues receiving subscriptions from its members.

This emerged in a High Court litigation pitting the PSMAS and Dr Augustine Mazvuru who was claiming $144 263 for unpaid medical services rendered to the medical society members.

To support its defence to the claim, PSMAS had attached a letter it wrote to Dr Mazvura stating its position on the debts.

PSMAS wrote to Dr Mazvuru advising him that the society is experiencing serious financial problems owing to late remittance of subscription fees by its members particularly member organisations, which are reeling under the liquidity crunch.

“The society is consequently unable to settle healthcare service providers’ claims timeously,” read part of the letter dated March 1, 2017.

PSMAS noted in its letter that Dr Mazvuru was not prepared to bear with the society during its difficult period and had resultantly took legal action against it to recover what is owed to him.

“While the society is trying its best to settle its indebtedness to you and indeed to all service providers, every single claim that you submit to the society will simply add to its financial predicament and hence create room for further litigation,” said PSMAS.

“It is against this background that the society has taken the decision that until its financial position improves to an extent that it is able to settle your claims timeously, you stop attending to its members with immediate effect.

“Refer any of our members who may have problems with this decision to our offices. Indeed, you can ask any of our members who insist on getting services from yourselves to pay cash and thereafter approach our offices for necessary refunding processes.”

PSMAS, which was being represented by Advocate Tawanda Zhuwarara, rejected the claim on the grounds that Dr Mazvuru had issued summons in the name of “Mazvuru and Partners”.

It was argued that Dr Mazvuru’s summons were defective as no proper plaintiff was before the court.

Justice Jester Helena Charewa agreed with Adv Zhuwarara that the summons were defective and upheld the objection to the claim.

In dismissing the claim, Justice Charewa warned lawyers not to just oppose cases against their clients for the sake of opposing, but scrutinise their papers and be professional enough to concede where necessary.

She said it was imperative for lawyers to be professional. Mageza and Nyamwanza law firm acted for Dr Mazvuru.