A healthcare subscription product may trigger the registration requirement as a medical scheme under the Medical Schemes Act

Authored by Michelle David and Ntokozo Ngubane

Product development and sale in the healthcare environment can be tricky and often finds itself straddling regulatory provisions. A starting point for products that seek to reimburse in the event of a healthcare event is whether the product amounts to the business of a medical scheme as contemplated in the Medical Schemes Act 1998 (MSA). The high court decision in Epione Healthcare Solutions (Pty) Ltd v Council for Medical Schemes and Another (050811/2025) [2026] ZAGPPHC 478, has confirmed that regulatory assessment of a product is imperative when designing such products. Epione’s application seeking to review and set aside the decisions of the Council for Medical Schemes (CMS) and the Appeal Board of the CMS (Appeal Board), which found that  Epione’s primary healthcare product, absent an exemption, fell within the ambit of “a business of a medical scheme”, was ultimately unsuccessful at the High Court. 

The facts of the case were that:  

1. Epione developed a direct primary care product (DPC Product) intended to operate through Health Villages. Subscribers would pay a fixed monthly fee for access to a defined basket of primary healthcare services, including unlimited in-person or virtual GP consultations, access to medical records through the Epione app, bi-annual primary health examinations, ECGs, pathology coordination, chronic disease management, mental health counselling and urgent care. 
2. The view of Epione being that the DPC product well outside of the ambit of the MSA.  The definition of “business of a medical scheme” in the MSA is broad and covers undertakingS, in return for a premium or contribution, liability associated with obtaining, paying for or rendering a relevant health service. Section 20(1) of the MSA also prohibits any person from carrying on that business unless registered as a medical scheme. 
3. As such, out of an abundance of caution, Epione applied to the CMS for an exemption under section 8(h) of the MSA, while maintaining that it did not conduct the business of a medical scheme. 
4. When the CMS refused the exemption, and the Appeal Board dismissed the internal appeal, Epione approached the high court seeking to review the decision of the CMS and Appeal Board to refuse to grant an exemption. In addition, seeking a declaratory order that the MSA did not apply to the DPC Product. 

Against that background, the high court had to decide two issues: 

1. whether the DPC Product constituted the business of a medical scheme, triggering section 20(1) of the MSA; and 
2. if it did, whether the refusal of Epione’s section 8(h) exemption application should be reviewed and set aside. 

Epione’s answer was that the DPC Product was different from medical scheme cover. It said the product did not pool risk, was profit-driven, focused on preventative care, promoted direct relationships between patients and clinicians, and did not involve third-party payments, billing or co-payments. Epione also argued that the monthly fee did not have the same character as a medical scheme premium or contribution. 

The court was not persuaded by the above, and its reasoning can be distilled into three points: 

1. Relying on the Constitutional Court’s reasoning in Genesis Medical Aid Scheme v Registrar, Council for Medical Schemes 2017(6) SA 1 (CC), the court held that “premium or contribution” refers to money paid in exchange for value; it is not limited to a risk-pooling arrangement. The substance of the DPC Product therefore mattered more than the label attached to it.   
2. On the facts, Epione’s members paid monthly for access to relevant health services delivered through a preselected group of practitioners.  Accordingly, section 20(1) of the MSA applied.   
3.  Without registration as a medical scheme or being granted an exemption, Epione could not lawfully offer the DPC Product to the public.   

The key takeaways from the above is that a product described as direct primary care, preventative healthcare or a subscription model may still fall within the MSA if members pay monthly premiums for access to the relevant health care services. In addition, the practical lesson is to structure healthcare products with regulation in mind from the outset, that is identify what the member pays, what health services are promised, who undertakes the liability and whether the model triggers section 20(1) of the MSA before seeking to rely on an exemption under section 8(h) of the MSA. The case yet again highlights that the substance of a product is what will be tested by a court as against the relevant regulatory regime, making it important for developer sof product to test same against any possible regulatory provisions. 

Epione Healthcare Solutions (Pty) Ltd v Council for Medical Schemes and Another (Review) (050811/2025) [2026] ZAGPPHC 478 (4 May 2026)