KUALA LUMPUR, Nov 25 — The Ministry of Health (MOH) has instructed insurance companies and managed care organisations (MCOs) to quit interpreting previous letters by the ministry as blanket policy for all health insurance claims.
In an October 31 letter, MOH medical practice division director Dr Hirman Ismail noted that insurers and takaful operators (ITOs) and MCOs (also known as third-party administrators, or TPAs) interpret and apply previous letters issued by the MOH on a general basis.
“However, those letters were actually issued to answer specific issues and were subject to the context of particular cases,” said Dr Hirman in his letter, as sighted by CodeBlue.
“This interpretative practice has caused denials of claims that should have been considered reasonable and appropriate for other cases.
“In line with that, MOH wishes to clarify that any letter, opinion, or explanation – which was previously issued by the MOH related to certain billing issues or claims – is limited and specific only to that individual case or context referred to the MOH.
“It is inappropriate and inaccurate for any insurance company or MCO to interpret those letters as a general policy or comprehensive reference that applies to all other claims or billing practices.”
Dr Hirman’s October 31 letter was sent to the Life Insurance Association Malaysia (LIAM), the General Insurance Association of Malaysia (PIAM), and the Malaysian Takaful Association (MTA), as well as the Association of Private Hospitals Malaysia (APHM) and groups representing doctors, namely the Malaysian Medical Association (MMA), the Malaysian Society of Plastic and Reconstructive Surgery, and the Malaysian Association of Plastic, Aesthetic and Craniomaxillofacial Surgeons.
His letter was issued after MOH’s medical practice division held a discussion with a few medical groups about the issue of claims denials or reductions by insurance companies and MCOs.
Previously, on October 7, Health director-general Dr Mahathar Abd Wahab warned ITOs and MCOs or TPAs against interfering with doctors’ clinical decisions that he said could be illegal under the Private Healthcare Facilities and Services Act 1998 (Act 586).
He said in a press statement that conditioning guarantee letters or setting reimbursement on “predetermined” clinical choices may violate Act 586.
The latest circular by MOH’s medical practice division illustrates the battle lines in an escalating conflict between payers and providers over perceived clinical interference in health insurance, as the Health Ministry appears to be defending the medical profession, whereas the Ministry of Finance (MOF) and Bank Negara Malaysia (BNM) seem to have taken the side of the insurance industry.
While insurers claim to follow the “standard of care” set by MOH, the medical practice division’s October 31 letter now makes it clear that ITOs and MCOs or TPAs can no longer use MOH’s previous opinions on specific cases as general guidance for other cases.
