Tuesday, 26 September 2023

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Raffles Health Insurance turns to panel clinics and claw back payment in attempt to recover money owed by Hyflux

In the wake of the Hyflux debacle, insurance company Raffles Health Insurance (RHI), wholly-owned subsidiary of Raffles Medical Group (RMG), is reportedly attempting to recover medical fees for staff medical treatments that the water-treatment firm had failed to pay back to the insurer. Instead of Hyflux, however, RHI is turning to the same panel clinics who provided the services.
In an email sent to Hyflux panel clinics seen by TOC, RHI panel management said that their agreement with Hyflux ceased when Hyflux went insolvent, which was mid-2018.
The email explained part of the privileges provided by RHI to all Associated Clinics include cashless service and prompt payment to clinics when claims are submitted in full. RHI noted that the service continued despite Hyflux failing to make payments in the past year.
At the time, RMG said that they would continue to pay Hyflux panel clinics for medical services rendered to employees “to ensure continuity” and so that cash flow of the clinics would not be affected.
Now, however, RHI says it will be proceeding to “reverse the payments made” to the clinics due to non-payment by Hyflux, by deducting the amount from the next payment to the clinics involved.
Based on the email, there doesn’t seem to be any previous consultation of this strategy with the panel clinics, nor any discussion of how RHI might go about getting their money back from Hyflux. In the event, Hyflux manages to pay RHI, no mention is made of reparation to the clinics involved.
According to Chinese-daily Lianhe Zaobao, the money ‘owed’ to RHI is not more than S$700 per clinic for 90% of cases.

Email from RHI to the clinics, seen by TOC
A spokesperson had told the reporter that an ‘amicable resolution’ is being sought but there were no details on how much money is owed in total or how many clinics are involved.
RHI’s model works like this: an employee of Hyflux visits a doctor, the doctor credits the bill and later claims the amount from RHI who is Hyflux’s medical insurer. But since Hyflux hasn’t made payments in about a year, RHI is now attempting to take back the losses from non payment by knocking on the doors of the clinic for their money back.
The RMH spokesperson was quoted as saying, “We strive to engage all affected parties for an amicable resolution on this matter.”
Given that Hyflux has applied to the Courts for protection to reorganise their debt, it seems RHI is turning to the clinics instead. But really, are they even in a position to be making such demands in the first place?
Doctors who spoke to TOC asserted that the insurer had taken up the risk of servicing Hyflux despite the deteriorating condition of the water-treatment firm, and therefore it’s unfair for RHI to recover its losses through the clinics.
So the question is, do the clinics owe RHI anything? After all, RHI is the middle man that pays the clinic for services rendered and is supposed to be reimbursed by Hyflux. The clinics place their trust in RHI in the first place but now have to pay the price for it.
The onus is on Hyflux to pay back RHI for whatever medical costs they’ve covered. Also, RHI took a calculated risk when it decided to continue making payments to the panel clinics even ask their Hyflux started to fall pay on their repayments. Whatever issues RHI has here is with Hyflux, not the panel clinics.
What’s also curious is the way the story is framed in the Straits Times: that RHI has suffered a loss at the hands of Hyflux and is attempting to recoup. It conveniently leaves out the fact that RHI is turning to what are effectively their contractors – the clinics for their money instead of Hyflux, who owes them.

The Hyflux saga

Hyflux has been going through a turbulent period this past few years as earnings took a dive since 2016, leaving it with S$2.7 billion in liabilities as of September 2018. In April 2019, the company said it is pursuing all viable strategic opportunities to avoid liquidation.
So far, Hyflux has seen offers by several ‘white knights’ investors from Oyster Bay Fund to United Arab Emirate’s Utico and an unnamed global water desalination company. However, no deals have been made thus far.
In May 2019, the Public Utilities Board (PUB) said it will be going forward with its takeover of Hyflux’s Tuaspring Desalination Plant on 18 May following the termination of the PUB’s Water Purchase Agreement with Hyflux on 17 May.
For now, Hyflux remains in discussion with Emirati utilities group Utico for a S$400 million binding deal where the UAE company seeks to hold 88% of Hyflux’s share in return for S$300 million worth of investment in equity and a S$100 million shareholder loan to the water-treatment firm.

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