The Health Funders Association (HFA) has lodged a complaint against the price of Covid-19 tests, aimed at clawing back some R1bn previously paid out to the three biggest private pathology labs in South Africa.
The group of 35 medical schemes in the HFA, which includes Discovery, Momentum, Profmed and Fedhealth among its members, asked the Competition Commission last week to launch a fresh probe into the prices charged by Pathcare, Ampath and Lancet for Covid-19 polymerase chain reaction (PCR) tests in 2020 and 2021.
It has been joined in its complaint by several non-member schemes, collectively representing 5.6m of SA’s 8.9m medical scheme beneficiaries, reports BusinessLIVE.
“The aim is to understand the profits (made by the laboratories), and for that money to be returned to medical schemes to defray future expenses,” said HFA director Craig Comrie.
PCR tests, considered the gold standard for Covid-19 testing since the outset of the pandemic in 2020, initially cost up to R1 500 in the private sector. After the national State of Disaster was declared, the health sector was granted an exemption to the Competition Act’s restrictions on collective bargaining and private laboratories agreed to charge medical scheme members R850 a test.
At the time there was an in-principle agreement among stakeholders that the price should be on a cost-recovery basis during the pandemic, the HFA said.
These tests were conducted in large numbers, not only used to diagnose Covid-19 but also to give people the green light for international travel and hospital admission for non-Covid conditions.
The biggest labs dropped their price to R500 in December 2021, in line with voluntary settlements reached after the Competition Commission launched an investigation into allegations of excessive pricing.
That probe was triggered by a complaint laid by the Council for Medical Schemes in October 2021 after various medical schemes and administrators failed to negotiate lower prices.
The HFA said it was clear from the 2021 Competition Commission’s investigation that the labs were not basing their prices on a cost recovery model for most of 2020 and 2021, and that medical scheme members had thus faced “substantial” additional costs.
“The HFA’s complaint, alongside several other medical schemes as co-complainants, aims to ensure the excess costs associated with any excessive pricing of Covid-19 PCR tests is refunded to medical schemes for members’ benefits,” it said in a statement.
The consent agreements reached between the competition authorities and the laboratories did not protect them from further complaints and investigations into the price of PCR tests, or the recoupment of damages if the prices were found to be excessive, or if the laboratories had agreed upon them as competitors, it said.
Business Day article – Medical Aids take on labs (Open access)
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