KUALA LUMPUR, Oct 15 — Specialist doctors in the private sector across Malaysia have accused health insurers of routinely interfering in clinical decisions by denying, delaying, or even revoking coverage of patient care.
These practices by health insurance/takaful companies and third-party administrators (TPAs) compromise treatment and endanger lives, according to specialists across specialties.
Hundreds of testimonies – submitted through a recent CodeBlue nationwide survey among 855 specialists practising in private hospitals – describe what doctors call a pattern of obstruction that goes far beyond administration.
Insurers, they said, are “dictating clinical management” and making decisions that should rest with treating physicians.
This article draws on open-ended responses from the poll to illustrate how health insurers allegedly exert control over treatment decisions in private hospitals. CodeBlue’s first article in this series presented the full survey findings and methodology.
DENY: Outright Refusals Of Care
Specialists say outright denials are among the most common tactics insurers use to limit costs. The refusals take many forms, from reclassifying medical conditions as non-medical to invoking broad “pre-existing condition” clauses that disqualify coverage.
An oral and maxillofacial surgeon in Johor said a patient with cemento-ossifying fibrous dysplasia of the jaw, a tumour that required resection and reconstruction with an iliac bone graft from the hip, was denied coverage on the grounds that it was considered a dental procedure. “This was rejected on the basis of dental treatment, which is an outrage,” he said.
Other specialists said insurers frequently invoked “pre-existing condition” exclusions, even when the findings were incidental or unrelated to the illness being treated. Diabetes was one of the most common reasons cited for denials due to “pre-existing conditions”.
Doctors said newly detected chronic diseases should not disqualify patients from receiving coverage for a separate, unrelated illness.
A Johor obstetrician and gynaecologist shared the case of a post-menopausal woman who had been paying insurance premiums for two decades. The woman, who developed diabetes six to seven years ago, was approved for surgery after presenting with post-menopausal bleeding, only for the insurer to retract coverage upon discharge. “The reason? Not informing insurance of her diabetes status,” she said.
On the surface, this anecdote shows that the policyholder may not have had diabetes (or been diagnosed with it) upon buying her policy 20 years ago, but developed the condition later on in life, only for this “pre-existing condition” to be invoked by her insurer to revoke coverage when she sought treatment for an unrelated illness.
Another internal medicine specialist in the Klang Valley described a dengue patient whose admission was denied after routine blood tests revealed newly diagnosed diabetes. “Admission GL (guarantee letter) was declined following that,” the doctor said.
Doctors also described cases where insurers classified obesity or even being overweight as a pre-existing condition. A Johor dermatologist said her patient’s GL was revoked “for the reason that the patient is overweight”.
Another internal medicine specialist from the same state said a similar thing happened to a patient admitted for hyperglycaemia. “Initial GL was approved, then final GL declined. Reason given was because patient is overweight and that is a pre-existing condition,” she said. “Patient was overweight on the initial GL application already. Could have declined then, but approved then. And being overweight is not a pre-existing condition.”
In another case, a Johor nephrologist said an insurer revoked coverage for a patient who was admitted after a motor vehicle accident (MVA). “Patient sustained a closed leg fracture and was referred for high blood pressure,” he said. “GL was issued, fracture was fixed, and after the operation, GL revoked suddenly due to high blood pressure.”
A Johor general surgeon reported a similar experience. His patient was admitted for one diagnosis, but when imaging revealed a fatty liver, a TPA revoked the GL, claiming the finding was undeclared. “This finding is unrelated to the admission diagnosis,” the clinician said.
A gastroenterologist and hepatologist in Sarawak described a patient admitted for pneumonia, whose insurance claim was declined after diabetes and hypertension were discovered during admission.
These examples point to a pattern of insurers using chronic or metabolic conditions to justify claim rejections. Many specialists in CodeBlue’s survey reported requests from insurance companies for their patients’ lipid profile or blood sugar levels that the clinicians considered irrelevant to their diagnosis of the illness that patients were getting admitted for.
One accused insurance agents of getting their customers to request unnecessary medical reports from doctors to avoid charges, even though agents are entitled to claim for medical report fees, only for insurers to later “automatically reject” GLs or claims due to “so-called pre-existing conditions”.
Malaysia has a high prevalence of non-communicable diseases (NCDs).
According to the National Health and Morbidity Survey (NHMS) 2023, more than half of Malaysian adults (54.4 per cent) are overweight or obese. About one in six adults (15.6 per cent) have diabetes, one in three (29.2 per cent) have hypertension, and about 7.6 million adults (33.3 per cent) have high cholesterol. Millions of people are unaware about having either condition.
The survey also found that nearly 2.3 million Malaysian adults live with three NCDs and over half a million live with four NCDs simultaneously, reflecting how common multiple chronic conditions have become across the population.
Doctors said broad interpretations of insurance policy clauses unfairly penalised patients who have faithfully paid premiums for years, while allowing insurers to avoid liability through vague definitions of what counts as “pre-existing”.
Specialists reported insurers alleging “congenital” conditions to deny coverage, including for adults and not just children, even if a developmental cause was ruled out by clinicians, unclear, or an incidental finding. Even in children, paediatricians say not all conditions are necessarily congenital.
Insurance companies or TPAs also linked conditions like cervical dysplasia (CIN), vaginal candidiasis (yeast infection), urinary tract infections, pelvic infections, or prostatitis to sexually transmitted diseases.
Other respondents described insurers refusing admissions based on misinterpretation of clinical parameters or non-medical reasoning.
An emergency medicine specialist in the Klang Valley said a patient with acute gastroenteritis (AGE) and acute kidney injury (AKI), both legitimate medical conditions requiring hospital care, was denied a GL because the patient’s systolic blood pressure was 140 mmHg and there was no previous illness.
The insurer appeared to interpret the blood pressure reading of 140 mmHg, a mildly elevated but otherwise stable level, as evidence that the patient was not seriously ill.
By focusing on a single number rather than the overall medical picture, the insurer dismissed a legitimate clinical need for treatment.
An infectious disease specialist in Melaka described a similar experience. “Patient has gastro infection and is dehydrated, denied admission for IV (intravenous) drip because it doesn’t fulfil the insurance criteria and blood tests are normal. Patient with pneumonia and bronchospasm, denied admission because CXR (chest x-ray) is normal and saturating well on room air, denied because they don’t see bronchospasm,” she wrote.
The first case involved a patient with dehydration from a stomach infection, while the second involved a patient with pneumonia who was struggling to breathe.
In both situations, the insurer appeared to reject admission because test results such as blood work or X-rays looked normal, even though the patients were clinically unwell.
A respiratory medicine specialist in Perak reported a similar case. “A patient with bronchitis who had bronchospasm, breathless, distressing cough. GL was declined straight away because his chest X-rays and blood tests were normal, the diagnosis of bronchitis was not acceptable,” he said.
Specialists said such decisions show how insurers often equate “normal” test results with wellness, ignoring patients’ symptoms and overall clinical presentation to their treating physician. This kind of administrative gatekeeping, they said, overrides medical judgment and leaves patients without necessary care.
In other cases, doctors said insurers’ coverage rules created a paradox — refusing to cover treatment because it was classified as outpatient, while also restricting outpatient care for conditions that later became emergencies.
An oncologist in the Klang Valley said one patient was denied coverage for radiotherapy because it was considered an outpatient procedure. “Several insurance providers deny coverage for life-saving radiotherapy treatment as it is considered outpatient treatment. I have had patients whose cancer progressed or became incurable because their insurance denied a GL for radiotherapy and they were unable to afford treatment,” she said.
A general surgeon in the Klang Valley described the reverse scenario. “Patient was allowed only outpatient cover. The next day, the patient returned very ill with perforated appendicitis,” she said.
Specialists said health insurance companies frequently denied or revoked GLs for patients whose policies were less than two years old, even in acute or life-threatening cases.
A neurologist in Penang said: “Denied the patient’s GL as policy is less than two years. Patient is having an acute cerebral infarction.”
A gastroenterologist and hepatologist in Johor described a similar case. “Patient required endoscopy but insurance was less than two years old, so GL denied. Patient was told to pay first and claim later but couldn’t afford care,” the specialist said.
An ENT specialist in Perak noted: “Agents don’t inform patients on insurance clauses — for example, that coverage is only after two years, not three months as they state,” she said.
DELAY: Bureaucratic Stalling That Costs Time And Health
If denial is the first line of defence, specialists said delays are the most pervasive. Survey responses were filled with examples of procedures postponed, admissions stalled, and critical interventions deferred while insurers demanded repetitive or irrelevant documentation.
Many specialists wrote of unnecessary delays in approval, citing “frivolous secondary questions” and insurers “trying to advise the doctors” on what they believed was the best treatment option. Others said insurers even tried to delay emergency surgery to office hours.
A cardiothoracic surgeon in Penang said approvals could take up to two days, only to be rejected in the end without explanation. “Patient admitted for urgent surgery but approval took more than 48 hours, with multiple unnecessary questionnaires which more often than not are repetitive and unreasonable,” he said.
A respiratory medicine specialist in Sarawak described how bureaucratic delays disrupted patient care. “The delay in approval from generic queries means the procedure had to be done after hours or delayed to the next day, putting risk on the patient doing procedures after hours and disrupting clinic appointments.”
Several specialists said such delays often forced them to operate late at night or postpone necessary procedures. An orthopaedic surgeon in Penang said: “Delayed GL in open fracture case causing delay in definitive management. Patient had to be on traction while waiting for GL to proceed with surgery.”
Another orthopaedic surgeon in the Klang Valley recounted a similar emergency. “Patient had an open fracture and needed urgent surgery. Insurance asked for an X-ray report which is usually not available after office hours. So I sent a screenshot of the X-ray. Got approved but ended up doing surgery after midnight.”
Some respondents said insurers demanded that tissue diagnoses be confirmed before surgery, even in cases where the diagnosis could only be made during the operation.
A plastic and reconstructive surgeon in the Klang Valley said: “Need tissue diagnosis before admission for excision of lesion. Impossible as tissue diagnosis already needs admission and usually full lesion excised on first admission,” he said.
Others described insurers questioning standard clinical decisions. An anaesthesiologist in Penang wrote: “Repetitively writing why procedure requires GA (general anaesthesia) not LA (local anaesthesia) when patients insist too painful under LA. The most important care of patients revolves around pain-free surgery.”
The same anaesthesiologist added that an insurer once questioned why a patient was intubated “when the patient was in obvious respiratory failure”.
Doctors said such questioning not only delays care, but can have life-threatening consequences when emergencies are treated as administrative tasks.
A cardiologist in Johor described how administrative delay directly endangered a patient’s life. “Heart attack. Patient does not have a credit card to provide a guarantee and GL has been delayed by insurance. On ethical and safety grounds, I advised patient to proceed immediately, but patient was worried about a large bill he couldn’t afford so he refused, leading to more cardiac injury,” he said.
A paediatrician in the Klang Valley said another patient with pneumonia and shortness of breath was denied a GL. “Patient couldn’t receive treatment on time; condition worsened,” she said.
One general surgeon in Sarawak summed up the frustration, saying insurers will ask “nonsensical” questions to justify investigations or treatment until it’s too late to treat.
Another anecdote reported insurance denying coverage of surgery for early-stage cancer. A plastic and reconstructive surgeon in Sabah shared: “Had a doctor who came to see me with a bad cancer of the foot. Early stage. However, this type of cancer carried a grave prognosis. Approval was denied, stating a wide excision was ‘not medically indicated.’”
REVOKE: When Approval Is Taken Back
Perhaps the most alarming trend revealed by specialists was the revocation of insurance coverage approvals, often after completion of a procedure. About 67 per cent of respondents in CodeBlue’s poll reported having experienced GL revocation or denial after admission or treatment for their patients.
The term “initial” GL was frequently used, indicating that an insurer’s “guarantee” letter isn’t necessarily a guarantee of coverage.
A plastic and reconstructive surgeon in Sabah wrote, “Many times they approve a diagnosis and procedure, only to deny it once treatment is complete. A specific mechanism should be put in place so this never happens.”
Several specialists described insurers withdrawing GLs or partial payments after initially granting approval. A gastroenterologist and hepatologist in the Klang Valley wrote: “GL for GI scope is revoked if findings are normal.”
An ear, nose and throat (ENT) specialist in the Klang Valley reported a similar case. “Excision of ear cyst was initially approved, but declined after surgery as it was deemed to be congenital, without giving reasons.”
An internal medicine specialist in Johor added that revocations often happened when patients were admitted overnight for worsening symptoms. “Most times, admission is at night when symptoms are unbearable. The next day, insurance rejects.”
Such cases often occur when patients require observation or emergency care outside office hours. Specialists said insurers sometimes revoke approvals once the patient’s condition stabilises, treating the admission as unnecessary in retrospect even though it was clinically justified at the time.
In other cases, insurers withdrew approval after recovery, disregarding that treatment — even when successful — was necessary in the first place.
An orthopaedic surgeon in Perak said: “The patient improved after IV analgesics and physiotherapy. Planned surgery was no longer indicated. Patient GL was revoked two weeks after discharge.”
A geriatric medicine specialist in the Klang Valley described a similar experience. “I admitted a 60-plus-year-old patient with new onset frequent falls for further investigation and management. She fell twice in the past three days, and I wanted to rule out stroke and assess other risk factors.
“Insurance revoked the coverage when MRI was normal, saying this could be treated as an outpatient case. But the patient lives far from the hospital with only her husband, and I couldn’t risk further falls. Appeal letter sent and patient still failed to claim back,” she said.
Doctors said such reversals leave both hospitals and patients exposed to financial risk while eroding trust between physicians, patients, and insurers. They said there is little accountability when approvals are granted one day and revoked the next.
Some respondents said the extent of insurer interference bordered on negligence. In several cases, doctors described situations where treatment was delayed because insurers demanded additional clarifications despite prior approval.
A radiologist in the Klang Valley wrote: “The patient already had insurance clearance for the procedure but when it came to admission, required further clarification from the admitting doctor prior to commencement of procedure.”
Some specialists complained about insurers refusing to pay them procedure or consultation fees. An ophthalmologist in Johor said insurance companies often prohibited health care providers from billing or even informing patients if insurers denied payments to the provider. “This raises serious legal and ethical questions—who authorises such restrictions, and are they enforceable?”
A few specialists reported a “troubling trend” of insurance companies conducting retrospective audits and “clawing back” payments to doctors for previously approved procedures performed up to two to three years back, citing threats of blacklisting.
A hospital medical director confirmed with CodeBlue that if GLs are revoked after admission, a procedure, or treatment, the patient is responsible for paying the hospital bill. If doctor fees alone aren’t paid, this is usually due to disputes between the doctor and insurer over the codes charged.
Systemic Insurance Failures Across Specialties
These testimonies spanned nearly every field of medicine. Surgeons described denials for postoperative dressings. Anaesthesiologists said they were repeatedly asked to justify the need for general anaesthesia. Paediatricians reported refusals for infections requiring close monitoring, while oncologists said insurers denied coverage for innovative cancer drugs and outpatient chemotherapy.
Doctors said the people making these decisions were often administrative staff with little or no medical training. A neurosurgeon in the Klang Valley wrote: “The quality of questions shows a complete lack of knowledge by the person asking questions.”
An internal medicine specialist in Johor added: “Insurance companies employ extremely incompetent people to handle GL approvals. They have no clue about medicine and deny GLs based on poor understanding of the medical conditions of patients.”
Behind every insurance query or denial lies a patient forced to delay treatment, downgrade care, or switch to government hospitals, despite the promise of protection when they bought a medical plan. Many said patients felt helpless when claims were denied, while others quietly paid to avoid drawn-out disputes.
Specialists stressed that they are not opposed to cost management, but argued that insurers have overstepped into the realm of clinical judgment. Several called for an independent medical review board or ombudsman to adjudicate disputes, along with clearer appeal processes and transparent approval criteria.
An endocrinologist in the Klang Valley wrote: “Insurers and TPAs have a covenant with the patient. They have every right to limit coverage according to their contract with the patient. But they do not and should not have the right to dictate medical treatment,” he said.
“If there is a grievance, it should be filed after the fact to the doctor, hospital, the MMC (Malaysian Medical Council) or via legal means. Additionally, every grievance or question from these organisations should be signed by a medical professional who will then be responsible for any consequences of non-coverage.”
Without independent oversight, doctors fear the pattern of “Deny, Delay, Revoke” will continue to define private health care in Malaysia. While these practices may have been happening for years, responses in CodeBlue’s poll hint at rising insurer reluctance to approve coverage, following a post-Covid spike in claims that put the industry under pressure.
“Insurance is dictating what can be treated. They seem to know more than doctors,” said an orthopaedic surgeon in Johor.
A cardiologist in the Klang Valley wrote: “Health insurance is trying to dictate what is best for patients’ care despite them not assessing the patients and risking or delaying treatment or care. At the same time, consultants may end up giving suboptimal care and risking litigation issues,” he said.
Ultimately, Malaysia’s health insurance system appears to trap patients in a paradox. Insurers demand “perfect health” to qualify for coverage, yet deny claims once illness strikes. If a patient becomes too sick, care is delayed or revoked; if they recover, their treatment is deemed unnecessary.
From admission to discharge, doctors say the odds are stacked against patients — a system designed less to protect health than to exclude you every way they can.
“Insurance companies are basically finding any excuse under the sun to deny claims.”
This is the second article in CodeBlue’s series based on our survey of private specialists about health insurance issues faced by their patients. The next story in the series will examine doctors’ experiences with medicines denied coverage by insurers.
