KUALA LUMPUR, Oct 23 — Bandar Kuching MP Dr Kelvin Yii Lee Wuen warned today that health insurers and third-party administrators (TPAs) have “crossed the line” by influencing clinical decisions in Malaysia’s private health sector, saying such interference can undermine professional judgement and patient care.
Dr Yii, who is medically trained, said payers’ growing control over treatment approvals and guarantee letters (GLs) is blurring the boundary between administrative oversight and medical autonomy.
“The reality is that such incidents where clinical decisions by health care professionals are influenced by health insurers or TPAs have been ongoing and the line must be drawn if it has significant effects on patient care and prognosis,” Dr Yii said in comments sent to CodeBlue today.
He added that while payer influence has existed for years, recent developments show the problem has escalated.
“I believe the line has been crossed when a huge significant clinical decision by our health care professionals in the private sector has been influenced and even compromised due to rigid conditions set by insurance and TPAs.
“Clinical decisions should remain clinical and health insurers and TPAs should facilitate that principle, not hinder it,” Dr Yii said.
Lack Of Regulation Over Insurer, TPA Interference
The Pakatan Harapan lawmaker pointed out that Sections 82 and 83 of the Private Healthcare Facilities and Services Act 1998 (Act 586) already outline principles and statutory safeguards to protect clinical decision-making from undue influence.
However, he said the law still lacks a regulatory mechanism to address interference by insurers and takaful operators (ITOs) or TPAs.
“While Sections 82 and 83 of the Private Healthcare Facilities and Services Act 1998 (Act 586) sets out principles and statutory safeguards to protect clinical decision-making from undue influence, but the root of the problem still the lack of regulation over ITO/TPA interference, and a body or entity empowered to regulate both insurers and private health care providers for patient/ consumer protection.”
Independent Statutory Commission Based On A Tripartite Model
Dr Yii reiterated his call in Parliament for the Ministry of Health (MOH) and Bank Negara Malaysia (BNM) to establish a clear mechanism to regulate TPAs through an independent statutory Private Health Care Commission that includes representatives from government, insurers, and patient groups.
“That is why in Parliament I have made this call for the MOH and BNM to form a clear mechanism to regulate the TPAs, and this can be a form of an independent statutory Private Health Care Commission consisting of relevant stakeholders including those from MOH, Bank Negara, the insurance companies and even patients groups,” he said.
He proposed that this commission adopt a “Tripartite Model”, a consultative structure that has worked in other policy settings to balance industry sustainability with patient protection.
“This ‘Tripartite Model’ has been proven successful in other policies and could be replicated and adapted in this case to come up with reasonable regulation to ensure sustainability of industry without compromising patient care.”
The tripartite model that Dr Yii referenced mirrors the Majlis Perundingan Negara (National Consultative Council) – a consultative body formed in 1970 after the May 13, 1969 riots to promote dialogue among government, opposition, and community leaders.
The council helped shape post-crisis unity policies, including the Rukun Negara, and is often cited as an early model for consensus-based policymaking in Malaysia.
Dr Yii said the proposed commission could review additional legislation to ensure adequate insurance coverage at reasonable premiums, particularly for patients with pre-existing conditions.
“Through this model they can review needs or additional legislation to better protect consumers to ensure adequate coverage at reasonable premiums. This includes unreasonable denials or exorbitant premiums charged towards those with pre-existing conditions or even age.”
He cited CodeBlue’s investigative series on insurer interference, which reported specialists’ claims that some insurers deny coverage or revoke guarantee letters (GLs) based on unrelated pre-existing conditions.
A CodeBlue nationwide survey of more than 850 specialists in private hospitals found that 99 per cent of respondents perceived insurer interference in their clinical decision-making.
Many doctors described the pervasive use of “Deny, Delay, Revoke” tactics, where insurers allegedly deny or delay approvals, or revoke GLs even after treatment has begun.
“It has been reported that many specialists claim insurers deny coverage or revoke GLs due to ‘pre-existing conditions’ like diabetes or even overweight, even though these aren’t related to the admission diagnosis (example: dengue/ pneumonia) or are an incidental finding. There has to be a balance in this without needing to raise premiums unreasonably.”
Dr Yii stressed that resolving these issues is essential to keep private health care accessible and affordable, particularly for Malaysia’s middle class, and to prevent spillover pressure on the public health system.
“That is why I strongly believe this is a matter of national importance to ensure even private health care which is needed to complement the public sphere, is reasonable and affordable especially to the middle class.
“The health care strain and burden towards the public health care system is already at the tipping point and if this issue is not properly addressed, it will just exacerbate the strain in our public system even more,” he said.
