SAMA applies to have price-fixing complaints dismissed

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The Competition Commission has heard an application of dismissal brought by the SA Medical Association (Sama), to have the two price-fixing complaint referrals of the Council of Medical Schemes (CMS) dismissed, almost five years after the complaints were first lodged, reports Business Day. The outcome of the case may affect how medical schemes reimburse members.

Sama, the largest doctor organisation in SA, brought the application to have the case thrown out on the grounds that the CMS had still not provided sufficient evidence against Sama, and it still did not know what case it was required to answer in respect of each complaint referral.

The report says the CMS initially lodged a complaint on 21 May, 2012 with the Competition Commission alleging that Sama had engaged in price fixing relating to specialist medical services. The CMS said Sama had adopted billing guidelines that had been approved by the South African Paediatric Association and the Society of Cardiothoracic Surgeons SA, who were in a horizontal relationship.

Senior counsel for Sama, the applicant, advocate Shem Symon argued that there was little clarity given by the CMS in the evidence they produced and it was unclear exactly what the CMS was arguing.

The report says the CMS had previously been given a chance by the tribunal to furnish the court with further evidence, which it did in the form of supplementary affidavits. However, these documents were also found to be unclear on the charge they were making. Instead of seeking – as its main relief – an order compelling the CMS to provide certain particulars that it alleges are necessary for purposes of pleading, Sama sought an order dismissing the complaint referrals.

Syman said the respondents did not know how the decision to publish the tariff guidelines was made, and were relying on a confession by Sama to substantiate the “handful of allegations” made, which he was not going to provide. Syman said the CMS could not prove any price fixing, and Sama could not be compelled to answer what it did not know. “They ought to have gotten their papers together before the hearing here today – they can’t look to us to make a case that they could not make,” said Syman.

Counsel for the respondent, the CMS, advocate Steven Budlender argued that Sama had not made a case for the complaint’s referrals to be dismissed, as the case had implications for consumers. He said it harmed beneficiaries, who in turn had to pay more for paediatric and cardiology services.

The report says Section 7 of the Medical Schemes Act stipulates that one of the functions of the CMS is to protect the interests of beneficiaries at all times. Budlender argued that there was collusion by Sama member associations, and their horizontal relationship facilitated colluding. He put it to the commission that a price fix was a trading condition: “There is no distinction between a trading condition and a price fixing.”

Reiterating that when Sama’s publication of tariff guidelines meant it was recommending use to its members, he said, “it is this authorisation that constitutes indirect price fixing”.

Business Day report

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