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MCCs and TPAs to be regulated under Private Hospitals and Medical Clinics Act (PHMCA)

Minister of State for Health Chee Hong Tat said that managed care companies (MCCs) and Third Party Administrators (TPAs) which provide healthcare services directly to patients will be regulated under the Private Hospitals and Medical Clinics Act (PHMCA).

This is in response to the questions filed by Mr Desmond Choo, MP for Tampines GRC, who asked the Minister for Health whether the Ministry will consider regulating managed care and third TPA companies as healthcare entities and how can transparency on the fee arrangements between doctors, TPAs and insurers be improved.

The Minister stated that it had earlier received feedback from medical professionals on their concerns with the charging practices adopted by some Third Party Administrator (TPA) companies.

He stressed that in doing the review, MOH has consulted professional bodies such as the Singapore Medical Council, the Singapore Medical Association, the Academy of Medicine Singapore and the College of Family Physicians Singapore, as well as industry associations like the Life Insurance Association.

He also said that there is agreement amongst stakeholders that the charging practices must not compromise patient safety and well-being, and should not lead to escalation of healthcare costs.

Managed care companies (MCCs) and Third Party Administrators (TPAs) provide a wide range of intermediary services, including management of employer medical benefits and claims administration.

Mr Chee said that the SMC has recently revised its Ethical Code and Ethical Guidelines (ECEG) to state that doctors must not allow financial arrangements to lead to any compromise in the care of patients to provide clarity on how doctors should engage MCCs and TPAs.

“Any charges which doctors pay to MCCs or TPAs should be commensurate with the actual administrative work done by these intermediaries in processing the cases, and not based primarily on the fees charged to patients,” he wrote.

The revised guidelines will take effect from 1 January 2017.

He noted that the revised ECEG indicates that doctors should disclose any such arrangement and referral fees to their patients, if these fees are passed on to the patients, to enhance transparency of TPA fee arrangements.

According to the Minister, MOH is assessing if these disclosure requirements should be further reinforced through our regulations.

MOH is also working with the Life Insurance Association (LIA) and the Integrated Shield Plan (IP) insurers to ensure that their appointed TPAs do not have any conflict of interest. The insurers should disclose to their policyholders any financial arrangements they have with the doctors in addition.