KUALA LUMPUR, Oct 30 — The Ministry of Health (MOH) has warned payers not to interfere with clinical decisions that it said must remain the “sole responsibility” of registered medical practitioners.
In a statement to CodeBlue today, the MOH said it acknowledged findings from CodeBlue’s recent nationwide survey among more than 850 specialists in private hospitals on health insurance and third-party administrator (TPA) practices.
“Decisions regarding anaesthesia, treatment modality, and admission status must be based on clinical need and ethical standards, not administrative directives or financial gatekeeping,” said the MOH.
“Any practice that compromises clinical independence or patient safety is a matter of concern. The role of insurers, third-party administrators (TPAs), or managed care organisations (MCOs) is limited to determining what is claimable under an insurance policy, based on accepted clinical practice and ethical standards.”
Sections 82 and 83 of the Private Healthcare Facilities and Services Act 1998 (Act 586) already provide statutory safeguards protecting doctors’ professional independence from “undue influence”, the ministry noted.
“While each case must be assessed individually, any arrangement, directive, or contractual condition that interferes with a practitioner’s authority over patient management or pressures them to act contrary to professional ethics may be inconsistent with these provisions.”
Parallel Oversight: BNM Over ITOs, MOH Over TPAs/MCOs
The MOH also said today that it was tasked by the Cabinet last June to study regulatory options relating to TPAs and similar entities, “including oversight under existing legal provisions”.
MOH’s statement comes less than a week after Bank Negara Malaysia (BNM) told CodeBlue that insurers and takaful operators (ITOs) and TPAs have no authority to direct patient care, which the central bank said “remains exclusively a matter for clinicians”.
BNM stressed that the role of ITOs and TPAs is limited to determining what is claimable under an insurance policy, adding that medical claims are reviewed against accepted treatment protocols and clinical practice guidelines (CPG) to ensure medical necessity and prevent fraud or abuse.
The central bank also said TPAs appointed by insurers must be registered as MCOs with the MOH, noting that many TPAs also act for corporations in managing employee benefit schemes that may not involve insurers.
In CodeBlue’s nationwide survey of 855 private specialists, 99 per cent perceived ITO or TPA interference in clinical decision-making – often through denials of inpatient admissions, guarantee letters (GL), or standard therapies.
While BNM maintained that ITOs and TPAs cannot “direct” clinical care, specialists told CodeBlue that payers’ control over treatment approvals, coverage decisions, and GLs effectively dictates clinical outcomes, highlighting the regulatory gap that the MOH and central bank are now seeking to address.
MOH, Regulators, Industry To Coordinate Health Financing Reforms
MOH said it recognised that rising health care costs and inconsistent billing and coverage practices have created challenges between providers and payers.
The ministry is working with the Ministry of Finance (MOF), BNM, the Malaysia Competition Commission (MyCC), the Ministry of Domestic Trade and Cost of Living (KPDN), ITOs, and other stakeholders to find coordinated solutions.
The ministry also expressed support for the Grievance Mechanism Committee (GMC) established by BNM and industry representatives to resolve disputes related to claims, GLs, and treatment coverage.
“The Ministry will continue to review the existing framework to ensure alignment between professional practice standards and the broader health-financing environment,” MOH said.
Earlier this month, Health director-general Dr Mahathar Abd Wahab similarly issued a stern warning to health insurers and TPAs against interfering with doctors’ clinical decisions to the extent of breaching the law.
The top MOH official said any arrangement that interferes with a practitioner’s authority over patient management, or pressures them to act contrary to professional ethics, is “not only unacceptable, but may also be inconsistent with legal provisions”.
Dr Mahathar warned that conditioning GL approvals or reimbursements on predetermined clinical choices may constitute a breach of these principles under Act 586.
