Healthcare Funders settle price fixing dispute

Medical aid schemes have reached a settlement with the Competition Commission over price fixing, under which they will pay a R500 000 “administrative penalty”.

The Board of Healthcare Funders—an association of medical aid schemes—said on Wednesday it would cease publishing a recommended scale of benefits or other forms of pricing guideline.

“Allegations have been made that in publishing guidelines for fees, the BHF was contravening certain sections of the Competition Act.

“During discussion with the Competition Commissioner we were able to clarify our objectives and also to reach a satisfactory compromise which we believe benefits both parties,” said BHF managing director Penny Tlhabi.

She said under the settlement the BHF was obliged to advise members of the commission’s concern about the use of the reference price list and caution them against using it collusively.

“All issues pertaining to the investigation are now considered resolved on the basis of this settlement agreement.

“Lots of resources, time and energy was put into this settlement, it took two years, and we want to put it behind us, we wanted to settle… So we can focus on more strategic issues to our members…”

Tlhabi said the BHF had to pay the penalty, “although we feel were we not wrong. We don’t believe what we did was wrong. The Competition Commission did agree with that…”

She said the BHF was not required to admit guilt, meaning that its members were also protected from any further legal action on this issue.

Tlhabi said the Competition Commission considered the BHF as an association of medical schemes “in a horizontal relationship” and the publication of guidelines as a form of fixing a purchasing price.

“The publication of guidelines in itself does not constitute a problem if it is conducted by an independent organisation.
It is the horizontal relationship which caused the difficulty.”

Tlhabi said the BHF would commission independent research into the costs of providing health care in South African, including factors that determine annual charges in costs.

The study would also “benchmark” appropriate charges.

She also said medical schemes would be free to use the results of the study in any manner they deem appropriate, acting individually and not in a coordinated fashion.

Price differentials in different parts of the country would also be part of the study, Tlhabi said.

Factors influencing the cost of providing services would be determined and translated into reasonable prices.

“The most important aspect will concentrate on the input costs which eventually determine the price of providing service.”

She said that would enable the BHF to set benefit limits which would be standard across its membership. - Sapa

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