South African Medical Association to ask Tribunal to dismiss case brought by Council for Medical Schemes

13 February 2017

The South African Medical Association (SAMA) and the Council for Medical Schemes (CMS) are appearing before the Competition Tribunal tomorrow, 14 February 2017, in connection with two complaints brought by the CMS in which it accuses SAMA and two member organisations of engaging in price fixing.

At tomorrow’s hearing SAMA will be seeking the following order from the Tribunal: to dismiss CMS’s two self-referrals filed in 2013, alternatively to compel CMS to provide further particulars relating to its complaints against SAMA.

The Tribunal, in 2016 had ordered the CMS to respond to SAMA’s exception applications through the filing of supplementary affidavits that, among others, indicates the nature of the alleged horizontal relationship between SAMA and the South African Paediatricians Association and between SAMA and the Society for Cardiothoracic Surgeons in South Africa.

Background

In the complaints that the CMS brought to the Tribunal, the CMS alleged that the 2009 medical tariffs determined by SAMA allowed pediatricians to bill an extra 50% above the medical aid rate payable for new born babies requiring intensive care. The CMS also complained about the 2010 billing guidelines of the Society for Cardiothoracic Surgeons of South Africa. In each case the CMS alleged that the application of these tariffs amounted to prohibited conduct under the Competition Act. Although the Competition Commission, which initially investigated the CMS’s complaint, was of the view that the complaints had merit, it decided not to prosecute the matter on the basis that there was an inquiry into the health sector underway which could cover the same ground.

The CMS then decided to pursue the complaints directly in the Tribunal, following the Commission’s non-referral of the two complaints.

In response to that SAMA took the matter on review to the High Court and asked that the Tribunal put the matter on hold pending the outcome of the review application and the outcome of the Commission’s health inquiry which is considering, amongst other things, the issue of tariff guidelines.

Having considered the arguments raised by both the CMS and SAMA the Tribunal agreed to put the CMS complaints on hold pending the review application in the High Court but did not make a determination concerning the health inquiry currently underway. This decision was overturned by the Competition Appeal Court, which said the Section 7 of the Medical Schemes Act was very wide and that allegations of price fixing cannot be said not to affect the interest of CMS’s beneficiaries.