Administrative charges by insurance firms to be probed

Health Minister Dr S Subramaniam says the practice of imposing administrative charges on hospitals is unethical and can cause medical bills to soar.

PUTRAJAYA: The health ministry will work with Bank Negara Malaysia (BNM) to investigate the ongoing practice of private health insurance companies to impose administrative charges on private hospitals.

Health Minister Dr S Subramaniam said the practice was unethical and could cause medical bills in the country to soar.

“For example, a hospital bills the insurance company a total of RM1,000 for the patient’s treatment, but 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 the bill up. So, the medical treatment cost will go up,” he told a press conference here today.

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.

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 added.

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