TPA Takes A Cut From Your Health Bill

The Singapore Medical Association (SMA) has reiterated its call for companies handling medical claims for insurers and doctors to be regulated for the good of the public, amid growing concern among doctors over “unfair” practices of such firms.

The SMA represents the majority of doctors here. Speaking to TODAY, SMA president Wong Tien Hua suggested that the authorities consider new laws or amending current laws to regulate these companies, which are called managed-care companies or third-party administrators (TPAs).

TPAs usually offer companies and insurers a panel of doctors, and doctors can join these panels to potentially reach a larger pool of patients.

But doctors are concerned over TPAs charging them fees computed as a percentage — typically 8 to 25 per cent — of what they charge a patient for their services, which is akin to a sales commission, even though the TPA might not have done any work related to the care of the patient. Some TPAs also impose caps on the fees that doctors can charge patients.

When the issue came up in Parliament last week, Health Minister Gan Kim Yong gave no indication that his ministry would regulate TPAs, but said the Health Ministry is working with medical professional bodies and associations to raise doctors’ awareness of appropriate arrangements with TPAs.

Releasing its latest ethical code for doctors that same week, the Singapore Medical Council, which regulates doctors, said that fees charged by TPAs “must not be based primarily on the services (doctors) provide or the fees (doctors) collect”.

Responding to queries, Dr Wong Tien Hua, who wrote about the issue in SMA’s August newsletter, said the association remains of the opinion that TPAs should be regulated as healthcare entities, to ensure better standards and improve transparency.

A possible preliminary step is for TPAs to form a body for voluntary self-regulation and to promote ethical standards within the industry, he said. The body could then engage actively with stakeholders including the Life Insurance Association (LIA) and professional bodies.

Doctors told TODAY that care for patients is compromised when doctors have to keep fees too low. For instance, caps on medication could mean doctors being able to prescribe only three days’ worth of antibiotics when a proper course would be five days’ worth.

In addition, when senior specialists decide to end their contracts with the TPAs, patients could end up being referred to remaining specialists on the panel who are not in the best position to handle the cases. For instance, someone with acute appendicitis may be referred to a surgeon who does not normally deal with abdominal diseases.

Dr Wong Nan-Yaw, a colorectal surgeon in private practice, agreed that TPAs should be regulated. “My experience with the TPAs as a specialist is that the fees dictated by the TPAs to my anaesthetist colleagues are so low that in an emergency, I’ve got great difficulty getting an anaesthetist who’s willing to (take up the case),” he said. “That compromises patient care.”

TPAs should disclose how much of each dollar they receive is retained by them, and how much goes into services for the patient, he said. They should also be open and transparent about the specialists still remaining on their panel and their sub-specialty, and patients should have a right to choose the specialist who can provide the best standard of care, he added.

TPAs have billed their services as a solution to managing healthcare costs. Mr Michael Tan, co-founder of Fullerton Health — a TPA — previously told The Business Times that the fees that they levy help cover operating costs such as setting up an IT system and running of a 24/7 call centre for patients and panel doctors, among others.

Dr Wong Tien Hua said the SMA is currently holding talks with the LIA, the Consumers Association of Singapore, the Ministry of Health and the Monetary Authority of Singapore to see how healthcare costs can be controlled.

The Health Ministry would also work with the LIA to remind Integrated Shield insurers to ensure their appointed TPAs have no conflict of interest and disclose to policyholders any financial arrangements they have with the doctor.

When contacted, the LIA — whose members include AIA, Aviva, NTUC Income, Great Eastern, AXA and Prudential — did not say what disclosures would be made to policyholders. It also did not say what it considered to be a conflict of interest. LIA executive director Pauline Lim, however, said its member companies that work with TPAs should ensure no conflict of interest that will compromise policyholders’ interest. LIA does not condone practices that add another layer and further escalate healthcare costs in Singapore, she said.

TPAs have been part of the healthcare landscape for many years. But their involvement in Integrated Shield plans of individual policyholders in the past year, restrictions imposed on the amounts doctors can bill policyholders, and unfair contract terms imposed by some TPAs, have triggered an uproar over what doctors call unfair practices, TODAY reported in June.

The SMC said fees paid to TPAs should reflect actual work done in handling and processing the patients, and doctors must not pay fees that are so high as to constitute “fee splitting” or which render them unable to provide the required standard of care.