The Competition and Tariff Commission (CTC) has launched an investigation into Cimas Medical Aid Society over alleged restrictive and anti-competitive practices in the health sector.
The probe follows a complaint by Belnash Investments, which alleges that Cimas refused to register its Harvey Brown Pharmacy on the insurer’s direct payment system. As a result, Cimas members have reportedly been forced to pay cash for prescriptions at the pharmacy, as their medical aid cards are not accepted.
The alleged conduct is said to have occurred despite other similarly positioned service providers being registered on the same system.
In a statement, the Commission said it has “preliminary concerns that the alleged practice may result in members’ choice of healthcare service providers being limited to Cimas Medical Aid Society’s pharmacy and other healthcare providers preferred by Cimas, where their medical aid is accepted.”
The CTC warned that such restrictive practices could create unfair barriers for independent businesses while limiting healthcare options for members.
It further noted that, “the alleged conduct may hinder the entry and expansion of Harvey Brown Pharmacy and other similarly affected providers, placing them at a competitive disadvantage compared to those already on the Cimas direct payment facility.”
Belnash Investments said it had made several attempts to have its pharmacy registered on the system but had not received a satisfactory response. The company argued that the exclusion had negatively affected its operations and limited its ability to serve insured clients.
Efforts to obtain a comment from Cimas Medical Aid Society were ongoing at the time of publication.
Interviewed policyholders also raised concern over the inconvenience caused by the arrangement.
“We are being forced to pay out-of-pocket for medication at facilities not linked to the scheme, despite being fully covered by medical aid,” said one Cimas member.
Health sector analysts say such arrangements, if proven, may point to broader structural challenges within the medical aid industry, particularly where funders are also service providers. They warned that this could distort competition and reduce patient choice.
The investigation comes amid growing calls for medical aid societies to divest from healthcare service provision, including clinics, diagnostic centres and pharmacies, in a bid to standardise operations across the sector.
Currently, there is a proposal to amend the Medical Services (Medical Aid Societies) Act which seeks to enforce a strict separation between funders and service providers, effectively prohibiting vertical integration.
If enacted, the reforms would restore the traditional model in which medical aid societies focus solely on financing healthcare, while independent providers deliver medical services.
