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Regulator intensifies probe into GEMS vitamins tender

After concerns were raised about a multimillion-rand contract for vitamins awarded by the Government Employees Medical Scheme (GEMS), the medical scheme regulator has now intensified its probe and a formal inspection is under way

The multivitamin tender was awarded by SA’s biggest medical scheme for civil servants to an Afrocentric subsidiary, reports BusinessLIVE.

The Council for Medical Schemes (CMS) announced last May that it had initiated an inquiry into GEMS after media reports that it had spent R400m on the contract with Activo Health, which is fully owned by Afrocentric.

Medical schemes usually cover benefits for members that have been recommended by healthcare professionals, but in this case GEMS offered members a five-month supply of multivitamins without the involvement of healthcare providers. It also outsourced the selection of the multivitamin provider to its managed care provider, Medscheme, which is also a subsidiary of Afrocentric, raising questions about a potential conflict of interest.

The initial probe was conducted under Section 43 of the Medical Schemes Act, which empowers the CMS registrar to address inquiries to a medical scheme “in relation to any matter connected with the business or transaction of the scheme”. However, it does not give the regulator the power to ask a scheme to open its financial records and other documents to scrutiny.

The Section 43 inquiry was completed on 15 September and recommended a more detailed investigation be conducted under Section 44 (4)(a) of the Act, said the CMS.

These provisions empower the registrar to order an inspection of a medical scheme if he believes such an inspection will uncover evidence of irregularity or non-compliance with the act, said CMS spokesperson Stephen Monamodi.

“We hope the investigation will be completed by the end of June 2023, but this is subject to many factors such as how fast the investigators are provided with the information (and) documents they require, access to the people they need to engage with, and possible legal challenges to halt the investigation,” he said.

Independent industry sources said GEMS had seen lower than anticipated take-up of the multivitamins, and those members who took up the offer last year had been offered a second five-month supply.

GEMS confirmed it was still providing the multivitamins to members.

“In early 2022, GEMS purchased a one-off order of vitamins (specific quantities) from the supplier that was contracted through a quotation process as previously communicated. To avoid wastage, the remaining vitamins from this order are being offered to members until all the units have been dispensed by participating pharmacies,” it said.


BusinessLIVE article – Medical schemes regulator deepens probe into GEMS vitamin tender (Restricted access)


See more from MedicalBrief archives:


GEMS faces court action over alleged ‘dodgy’ tender claims – again


GEMS accused of issuing R600m multivitamins contract irregularly


Ten forensic reports show scope of graft at GEMS






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