PUTRAJAYA: Allegations that insurance companies providing medical coverage are asking for a “cut” from private hospitals have riled Health Minister Datuk Seri Dr S. Subramaniam, who ordered the matter to be investigated.
Dr Subramaniam (pic) said the issue was brought to his attention during a recent meeting with private hospitals, which alleged that the insurers were asking for a portion of the claim to be given to them as administrative charges.
He said if a hospital submitted a bill of RM1,000 to the insurance company, the company would cut a portion of it, say RM100, as payment to them.
“Some call it administrative charges, others call it by different names. This is on top of the premium collected from those who purchase insurance. This is an unethical practice,” said the minister after attending the weekly Cabinet meeting.
To his surprise, Dr Subramaniam said private hospitals alleged that all companies providing medical coverage facilities were doing this, and this had been the practice for a long time.
“I got to know about this recently, and the hospitals claim the situation has worsened of late.
“We were told that if a hospital refuses to pay, the company will tell its customers not to seek treatment from the hospital.
“If the person insists on getting treatment from a ‘non-cooperating’ hospital, the insurance company will make it difficult for the medical centre to claim,” he added.
Dr Subramaniam has asked the ministry’s secretary-general to look into the matter and also get Bank Negara to assist, as the central bank is the regulator for the private health insurance industry.
He said this practice had created unhealthy competition and might inflate medical costs.
“Hospitals will mark up their charges to cover the portion that has to be given to the companies. This practice by insurance companies needs to stop,” he said.