Open Letter To PM Anwar: Government Must Regulate MCOs To Safeguard Patient Safety And Ensure Quality Of Care – 13 Medical Practitioners’ Groups

In an open letter to PM Anwar Ibrahim, 13 medical practitioners’ groups call for an MCO Act to regulate managed care organisations. They say MCOs’ business model will likely breach laws like the Medical Act and PHFSA, and affect patient safety and care.

YAB Dato’ Seri Anwar Ibrahim,
The Right Honourable, The Prime Minister of Malaysia,


Third-Party Administrators (TPA) and insurance-owned Employees’ Benefit Companies are middlemen in the business of health care for employees in the private sector through administrating the procurement of medical care and employing cost-containment measures.

Under the Private Healthcare Facilities and Services Act (PHFSA) (1998), these entities are defined collectively as managed care organisations (MCOs).

MCOs’ role in employee medical benefits for employers in Malaysia has been that of a TPA that arranges with GPs to treat clients’ patients utilising cost- containment measures, while claiming to maintain quality health care and its efficiency.

On the contrary, the cost containment measures has resulted in rationed and restricted care. The downstream implications of these restrictions would adversely affect the health of the nation’s workforce.

In our opinion, the current MCOs’ business practice model is likely to result in serious breaches of relevant laws, including the Medical Act 1971, PHFSA (1998) and Regulations (2006), the Malaysian Medical Council (MMC) Code of Professional Conduct, Guidelines on Good Medical Practice and others, thereby undermining the quality of medical care for the patient and the rakyat.

We, the undersigned, humbly present the concerns, findings and the recommendations of the Private Practitioners’ Forum on MCOs held on September 16, 2023, for the urgent attention, consideration, and action of YAB:

1. Some of the specific issues resulting from the imposition of terms and conditions (“Quasi-Regulations”) (QRs) by MCOs are contrary to compliance with existing laws and regulations.

These QRs were unilaterally determined by MCOs without due consultation with the Ministry of Health (MOH), registered medical practitioners (RMPs), and medical professional bodies, resulting in unfair contracts that are contrary to optimal treatment for patients and fair reimbursement for the RMPs.

2. QRs restrict patients’ right of choice of the doctor, limited to those registered with the MCO. The existing patient-doctor relationship is also compromised as the MCOs determine the clinics they appoint. With a change of MCOs, patients are forced to start over with a new health care provider.

3. MCOs have imposed QRs on doctors’ right of choice of medicines and duration of treatment per visit, leading to difficulty in providing optimum evidence-based care to the patients.

4. Of late, some MCOs have issued QRs requiring that their patients should only consult the doctor and are then directed to collect their medications from specific pharmacies. They are then asked to repeat their medications without need for subsequent follow-up care and supervision by the primary doctor.

This specific QR tantamounts to dispensing separation and is contrary to the process of duty of care for the patient. It will jeopardise patient safety.

5. There is also a QR that specifies what medical conditions that doctors are allowed to treat and to be reimbursed for. This is an interference of the medical management of a patient and thus is a contravention of specific provisions of the PHFSA (1998) and Regulations (2006).

6. Furthermore, there are also QRs that reject payment for specific medications, even though they are NPRA (National Pharmaceutical Regulatory Agency)-registered medications and prescribed by the attending doctor for medical treatment.

This is interfering with the statutory right of the doctor to prescribe. This QR is unlawful in Malaysia, as has been affirmed in the recent Court of Appeal judgment.

The Forum wishes to bring to YAB’s attention the following:

  1. The right to quality and appropriate care and the interest of patients must be paramount at all time;
  2. Hence, it is mandatory for all MCOs’ contracts to be compliant with all relevant laws, MMC’s Code of Conduct and guidelines on Duties of a Doctor, comprising Good Medical Practice and Doctor-Patient confidentiality and all other applicable MMC guidelines;
  3. RMPs are not privy to the fact that MCO’s contracts with employers and the MCO’s prescribed level of care may be in breach of relevant provisions and guidelines of the above-mentioned laws and regulations;
  4. The unilateral contracts between MCOs and the Employer has vested too much of power on the MCOs issuing QRs, whereby the “business of medicine”, which is presently unregulated, determines the “practice of medicine”, which on the other hand is highly regulated.


The continuation of this scenario of unregulated MCOs is untenable for doctors committed to provide affordable, quality, compassionate care.

The current MCO provisions in the PHFSA 1998 regulate the professional relationships of health care facilities with MCOs. It does not regulate MCOs.

The current provisions in the PHFSA were an interim measure to safeguard the quality of care to patients, while an MCO Act was being drafted. The legislative process has been stalled after a preliminary draft was produced in 1999.

After almost 25 years, the provisions have not been effective in restraining MCOs from laying down terms and conditions onto health care facilities that affect the professionalism of doctors and the provision of quality care to patients.

We strongly urge YAB to immediately:

a) Expedite the enactment of the long overdue MCO Act and ensuing that regulations to regulate the practice of managed care and code of conduct of MCOs are in the interest of good medical practice.

This is in line with practices in many developed countries that have managed care legislation to protect patients and doctors from unscrupulous business practices.

Legislation should include provisions to make MCOs liable as a result of imposing undue constraints on doctors that result in adverse outcomes of patients.

b) To direct the relevant ministry(s) to immediately vet all MCO contracts to ensure consistency, fairness to all concerned, and compliance with mandatory standards, which MCOs are obliged to meet as required by law.

c) To empower the relevant minister/ Bank Negara to protect the MCOs’/ Insurer-MCOs enrolees’ (patients) right to appropriate quality and choice of care.

d) Establish statutory responsibilities of MCOs towards patients, enrolees, and the RMPs, the contracted providers.


Dr Steven KW Chow (Chairman, Private Practitioners Forum 2023/ FPMPAM, Federation of Private Medical Practitioners’ Associations, Malaysia) & Dr Shanmuganathan Ganeson (President, FPMPAM)

On behalf of:

  1. Academy of Medicine Malaysia
  2. Academy of Family Physicians Malaysia
  3. Association of Specialists in Private Medical Practice
  4. Pertubuhan Doktor-Doktor Islam Malaysia (Perdim)
  5. Medical Practitioners Coalition Association of Malaysia (MPCAM)
  6. Penang Medical Practitioners Society
  7. Perak Medical Practitioners’ Society
  8. Private Medical Practitioners’ Association of Selangor & Kuala Lumpur
  9. Private Medical Practitioners’ Society Kedah/ Perlis
  10. Association of Private Practitioners’ Sabah
  11. Private Practitioners’ Society Sarawak
  12. Malaysian Medical Association (MMA) Sarawak

Attended by:

  • MMA
  • Association of Private Hospitals of Malaysia (APHM)
  • This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.

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