PETALING JAYA: Third-party administrators (TPAs), often cited as one of the drivers behind rising medical insurance costs, should be regulated under a single ministry, says Public Accounts Committee (PAC) member Sim Tze Tzin.
He said TPAs, firms that manage and process claims on behalf of insurers, currently fall outside the purview of any single authority, with no ministry directly overseeing them.
“Personally, I think they should be regulated. The role should be clearly defined and governed so the industry can grow and earn the confidence of companies.
“Companies are the ones engaging TPAs. If they are properly regulated, the insurance industry will become more efficient,” said the Bayan Baru MP.
Sim added that the joint committee comprising the Finance Ministry, Health Ministry and Bank Negara is the right platform to look into legislation for the sector. He said the committee was a step in the right direction as it offers coordination and comprehensive solutions to the issue of medical inflation, which cuts across several ministries and authorities.
“Now with this joint committee, they have the authority to examine the entire ecosystem,” he said.
Co-chaired by Finance Minister II Datuk Seri Amir Hamzah Azizan and Health Minister Datuk Seri Dr Dzulkefly Ahmad, the committee will plan and implement solutions to provide better healthcare value.
Sim also said PAC had received numerous complaints about TPAs during two public hearings on rising private hospital fees and insurance premiums held in Penang and Kuala Lumpur.
“TPAs act as middlemen. We acknowledge that they play a role. Companies often outsource claims management to TPAs because they do not want to handle complex medical claims themselves,” he said.
He added that PAC had also conducted proceedings with representatives from TPAs, and its findings will be included in a report expected to be tabled in the Dewan Rakyat either in August or October.
“We have two more proceedings to complete,” he said, referring to PAC’s ongoing probe into health insurance premiums and private hospital charges.
Commenting on the government’s proposed basic health insurance scheme, Sim said the base products would provide affordable coverage for the M40 and higher-income groups.
“It will help sustain the medical insurance system over the long term,” he said.
He added that the government is on the right track in addressing medical inflation, and if successfully implemented, it could become one of its key policy achievements.
