The Competition and Tariff Commission has launched an investigation into Cimas Medical Aid Society over allegations of anti-competitive behaviour.
The probe follows a complaint by Belnash Investments, which claimed Cimas refused to register its Harvey Brown Pharmacy on the insurer’s direct payment system.
Under the current setup, Cimas members are reportedly being forced to pay cash for prescriptions at Belnash Pharmacy because their medical aid cards are not accepted.
The alleged conduct is said to have occurred notwithstanding the registration of other similarly placed service providers on the same system.
Investigations are now focusing on whether Cimas is intentionally excluding the pharmacy to steer members towards its own nearby clinic and dispensary.
The CTC expressed concern that such “restrictive practices” create unfair barriers for independent businesses while limiting healthcare choices for members.
“The commission has preliminary concerns that the alleged practice may result in members’ choice of healthcare service being limited to Cima’s pharmacy and other healthcare providers referred by Cimas where their medical aid cards are accepted,” CTC said in a general notice published in the Government Gazette.
“The practice may create a barrier to entry and expansion of Harvey Brown Pharmacy and other healthcare providers that are on the Cimas Medical Aid Society direct payment system.”
The CTC said that if the allegations are proven, the conduct would constitute a violation of Section 28 of the Competition Act.
However, the commission clarified that the start of the probe does not yet mean Cimas is guilty of any wrongdoing.
“It should be noted that the commencement of an investigation neither presupposes that the conduct being investigated is anti-competitive nor that Cimas has violated the provisions of the Act,” it said.
“The commission will, as provided in section 28 of the Act, conduct an investigation to establish whether the alleged practice directly or indirectly restricts competition.”
The investigation into Cimas comes at a time, as medical aid societies are being urged to disinvest from healthcare services — including clinics, diagnostic centres, and pharmacies — to standardise industry operations.
A new proposal under the Medical Services (Medical Aid Societies) Amendment seeks to strictly separate the roles of funders and service providers, effectively prohibiting “vertical integration.”
If passed, the amendment would return the sector to a traditional model where medical aid societies focus solely on financing healthcare, while independent providers handle the delivery of medical services.
This marks a significant shift from Statutory Instrument 330 of 2000, which grants societies broad freedom to invest their assets in any manner permitted by their constitutions.
Under the existing 2000 regulations, insurers are only required to notify the Ministry of Health and Child Care of their investments, a loophole critics say has allowed dominant players to control the entire medical value chain.
Concerns have intensified over the expanding network of clinics and pharmacies operated by medical aid societies, which the insurers promote as a convenient “one-stop health shop” for their members.
However, some players argue that it is inherently unfair for a medical funder to also own and operate the facilities providing the care, as they effectively compete with the very providers they are supposed to pay.-herald
