ITOs and TPAs are only responsible for verifying whether a claimed treatment falls within policy coverage, based on medical necessity and standard treatment protocols. All decisions on patient care remain solely with doctors. Insurers and takaful operators, as well as TPAs, have no power to determine patient care.
Premium Hike - Many insurers were found to have violated Bank Negara Malaysia’s (BNM) interim measures on medical and health insurance (MHIT) premium adjustments, the types of non-compliance involved, and the enforcement taken.
MOF’s response mirrored BNM where payers only assess whether treatment is covered and do not influence clinical decisions. However, several medical practioners consistently describe insurer and TPA approval controls as affecting how care is provided in private hospitals.
Specialists reported insurers denying inpatient admission by reclassifying cases as outpatient or daycare treatment. They also reported rejection of general anaesthesia for surgical procedures and refusal to cover standard therapies, including both innovator and generic medicines.
Doctors said these decisions limit the treatment options they can offer patients. Doctors did not claim that insurers directly issue clinical instructions. Instead, they described the control of guarantee letters, claim approvals, and payment authorizations as a form of financial gatekeeping that influences clinical judgement in practice.
The Ministry of Health (MOH) has previously cautioned insurers and TPAs against influencing clinical decision-making. Health director-general warned that interference with doctors’ clinical discretion “may be illegal” under Sections 82 and 83 of the Private Healthcare Facilities and Services Act, which protect clinical autonomy.
Medical associations have also called for regulatory intervention on insurer practices affecting care. Over 90% Of Policyholders Saw Premium Hikes Below 10% In First Year, Says MOF
The interim measures require ITOs to submit all proposed premium adjustments to BNM for approval, and that adjustments which do not meet the interim requirements cannot be implemented. The interim policy aimed for at least 80 per cent of policyholders to face annual premium adjustments of no more than 10 per cent due to medical inflation. Current industry data shows that more than 90 per cent of policyholders experienced premium adjustments of less than 10 per cent in the first year.
Meanwhile, BNM has received 190 complaints from policyholders regarding MHIT premium adjustments, of which 94 per cent (179 complaints) have been resolved by ITOs. Policyholders should first bring disputes to their insurer, and unresolved matters may be escalated to BNMLINK for case-by-case review. The government, BNM, insurers, TPAs, hospitals and medical professionals have reactivated the Grievance Mechanism Committee (GMC) to coordinate operational issues.
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