Ministry to clamp down on health insurance ‘administrative’ charges

PUTRAJAYA, 12 Aug 2017: 

The Health Ministry will work with Bank Negara Malaysia (BNM) to investigate the ongoing practice of private health insurance companies imposing administrative charges on private hospitals.

Minister Datuk Seri Dr S. Subramaniam said the practice is unethical and could cause medical costs in the country to soar.

“For example, a hospital bills the insurance company a total of RM1,000 for the patient’s treatment. The insurer only pays RM900 to the hospital while the remaining RM100 is calculated as an administrative or service charge.

“What would the private hospital do then? They will hike it (the bill) up. So, the medical treatment cost will go up.”

He said the matter had long been in practice by almost all private health insurance companies nationwide but was only brought to his attention by several private hospital representatives recently.

Dr Subramaniam said private hospitals had to follow the health insurance company’s requirement or risk losing patients.

“If a private hospital refuses to pay the administrative charges, the insurer will remove them from the list of panel hospitals and advise their clients to seek treatment at another hospital.”

He said he had directed the ministry’s secretary-general Datuk Seri Dr Chen Chaw Min to work with BNM to take appropriate action and ensure that health insurance companies conducted business professionally.

– Bernama

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