Medical schemes industry body welcomes announcement of lower cost for Covid-19 PCR tests

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The Health Funders Association (HFA) welcomes the announcement by the Competition Commissioner, Mr Tembinkosi Bonakele, that the price of the Polymerase Chain Reaction (‘PCR’) Covid-19 tests has been reduced from R850 (including VAT) and any other charged amount to R500 (including VAT) per test with immediate effect.

HFA has expressed its concerns relating to the high price for Covid-19 PCR tests since November 2020 and, on behalf of its members, attempted on numerous occasions to engage with the National Pathology Group (NPG; the representative association of the pathology laboratories), in an effort to secure a downward revision of the prices under the current block exemptions, which allow medical schemes to address the PCR pricing directly with the pathologists.

Despite these efforts, regulatory intervention was required to secure a price reduction.

In terms of Prescribed Minimum Benefit (‘PMB’) regulations, medical schemes are compelled to pay in full for Covid-19 PCR tests when a doctor has referred them, subject to specific criteria being met by the patient, regardless of the outcome of the test. The PMBs were put in place to ensure that all medical scheme members can access health services relating to Covid-19, irrespective of the benefit option they are on.

The issue of Covid-19 test pricing is an important case study, demonstrating the extent to which the regulatory requirement for medical schemes to cover PMBs at cost significantly impairs their ability to negotiate lower pricing for the sake of affordable access for all.

HFA is grateful to the Council for Medical Schemes (‘CMS’) for lodging the formal complaint with the Competition Commission that the excessive price for Covid-19 PCR tests is in contravention of Section 8(1)(a) of the Competition Act read with paragraph 4 of the Regulations.

“We are grateful to the Competition Commissioner for stepping in. We believe that the Covid-19 pandemic calls for the entire health industry to work together in minimising both the human and financial impact of this unprecedented time”, says Ms Lerato Mosiah, CEO of HFA.

She went on to say, “we hope that this will lead to greater scrutiny of the pricing of services that medical schemes are obligated to fund at cost under the prescribed minimum benefits.”

While this outcome is positive, further discussion and collaboration with all relevant stakeholders is required to ensure that all related services and products are appropriately costed, and affordable in order to increase access by all citizens.

The HFA also believes that it is important that the Health Market Inquiry recommendations are implemented to ensure that there is adequate tariff determination mechanisms in place in future. To this end, the HFA supports the CMS’ continued efforts in this regard, in collaboration with and under the oversight of the Competition Commission.