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Picture: 123RF/BELCHO NOCK
Picture: 123RF/BELCHO NOCK

SA’s medical schemes regulator has launched an inquiry into the Government Employees Medical Scheme (GEMS), in the wake of media reports that it allegedly awarded a R600m contract to Afrocentric subsidiary Activo Health to provide its members with vitamins.

JSE-listed Afrocentric also owns GEMS administrator Medscheme, which oversaw the awarding of the contract, according to the Pretoria News.

GEMS is the biggest restricted medical scheme in SA and covers civil servants and their dependents. It is heavily subsidised by the state, and had 1.92-million beneficiaries in 2020, according to the Council for Medical Schemes’ (CMS) latest annual report.

According to the Pretoria News, Activo was awarded a contract to provide monthly vitamin packs to GEMS members for five months, starting in January 2022.

The CMS declined to answer Business Day’s questions. In a brief statement it said it had only become aware of the allegations after reading news reports, as it had received no complaints or allegations about the matter.

“Now that the CMS is aware of the incident, it has decided to lodge a section 43 inquiry on the reported allegations against GEMS and, as such, cannot comment on the specifics to avoid pre-empting the outcome of the inquiry,” it said.

Section 43 of the Medical Schemes Act empowers CMS registrar Sipho Kabane to address inquiries to a medical scheme “in relation to any matter connected with the business or transaction of the scheme”. It is considered a softer option than launching a section 44 inspection, which requires a scheme to open its books, documents and financial records to scrutiny by the CMS.

The CMS said the aim of the inquiry, and any subsequent processes, was to ensure all the parties falling under its regulatory oversight were compliant with the Medical Schemes Act.

The CMS oversees the medical schemes industry, and is charged with ensuring that medical schemes, their administrators, managed care companies and brokers comply with the act.

“At the appropriate time, the CMS will issue the findings of the inquiry and address any related questions from stakeholders,” it said.

GEMS was not immediately available to comment.

This is a developing story.

kahnt@businesslive.co.za

Picture: 123RF/BELCHO NOCK
Picture: 123RF/BELCHO NOCK
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