An organisation representing 35 medical schemes wants the largest pathology groups in the country to refund "excessive" charges for Covid-19 PCR tests during the pandemic.
The Health Funders Association (HFA) lodged a complaint with the Competition Commission on Wednesday. The organisation represents about 5.6 million medical scheme members - just more than 30% of the beneficiaries in the SA industry. Its members include Discovery, Momentum, Profmed, Fedhealth, and Bonitas.
"National policy consensus at the time of the Covid-19 pandemic in 2020 was that no party should profit from the pandemic and that consumers were to be protected from excessive, unfair, and unreasonable pricing of goods and services during the national state of disaster," Craig Comrie, a director of the HFA, told News24 on Thursday.
"A price point of R850 per Covid-19 PCR test was agreed at the start of the pandemic on the premise that this price would be adjusted downward as the input costs reduced and there was greater clarity in the volume of Covid-19 testing required."
Comrie says various medical schemes and their administrators made several unsuccessful attempts to negotiate lower prices for Covid-19 PCR tests with the leading private pathology groups during 2020 and 2021.
In October 2021, the Council for Medical Schemes lodged a complaint with the Competition Commission against the three main private pathology groups - Pathcare, Ampath, and Lancet - regarding Covid-19 PCR test prices. In December 2021, before the Competition Commission concluded its investigations, separate voluntary settlement agreements on a "no-admission of guilt" basis were reached between the Competition Commission and the three main private pathology groups.
In terms of the consent agreements, Ampath, Lancet, and Pathcare agreed to an immediate 41% reduction in the price of Covid-19 PCR tests, reducing the prices from R850 to R500 per test.
"The Competition Commission's investigation confirmed that the input costs incurred by the three main pathology groups for Covid-19 PCR testing had significantly reduced between March 2020 and September 2021 and that they had been earning substantial profits from these," says Comrie.
In the view of the HFA, the consent orders do not protect the three pathology groups against further complaints and investigations into the price of the PCR tests or the recovery of damages if they are found to have been excessive or agreed between them as competitors.
The HFA claims that, based on the investigations conducted by the Competition Commission in 2021, it became evident that the price of Covid-19 PCR tests was excessive for most of 2020 and 2021.
"As this period coincided with the most significant waves of infection and, therefore, the greatest number of Covid-19 PCR testing, this resulted in substantial additional costs for medical schemes and their members - and indeed, for anyone who paid for Covid-19 PCR tests during the period of the national state of disaster," says Comrie.
The HFA and several medical schemes, as co-complainants, want to ensure that any excessive pricing of Covid-19 PCR tests is refunded to medical schemes for their members' benefit.
"These recoveries will represent member funds and accrue to the medical schemes reserves. The reserves have a direct bearing on the ability of schemes to pay claims, and potentially also on future contribution increases for members," explains Comrie. "The medical scheme administrators have no financial interest in these recoveries whatsoever."
Pathcare CEO Dr John Douglas told News24 on Thursday that he was informed on Wednesday night by the HFA of the complaint lodged with the Competition Commission. Douglas has not yet seen details of the complaint.
"We will cooperate fully with any investigation by the Competition Commissioner as we have done in the past. PathCare resolved the complaint of 2021 through an agreement with the Competition Commissioner in December of 2021 to decrease the price of Covid-PCR to R500, which is still the price, and to submit financial data as required by the Competition Commission for two years," said Douglas.
Samantha Swanepoel, chief strategy officer of Ampath, told News24 that they are waiting to hear from the Competition Commission about the matter.
"We want to understand the full extent of the complaint. We will cooperate with the Competition Commission to understand any concerns raised," she said.
News24 also reached out to Lancet, but no response had been received at the time of publication.