Doctors cry foul over ‘unfair’ practice of third-party agents

SINGAPORE — They typically help companies handle the healthcare insurance claims of employees, and help insurers manage claims for healthcare expenses.

But lately, third-party administrators (TPAs) are wedging themselves between doctors on their panel and individual patients on various Integrated Shield plans.

The TPAs are charging doctors administrative fees for “referral” of these patients, when they could have played no role in the patient going to the doctor.

The TPAs, who represent insurers, would write to the doctors in private practice and claim fees ranging from 8 to 25 per cent of the doctors’ professional fees. Doctors are questioning the basis and ethics of this practice, which could ultimately hurt the quality of care for patients.

The practice was raised by geriatrician Carol Tan on Friday (June 10) at a conference on keeping healthcare costs sustainable.

Factors that contribute to escalating healthcare costs include business costs, which incorporate the administrative “referral” fees that TPAs are charging doctors.

These TPAs — also called managed care companies — are representing insurers and yet, are asking for payments from doctors, she noted.

“There’s a role for managed care; the issue is what does that managed care organisation do,” said Dr Tan, who chairs The Good Life Co-operative, which held the conference on Friday in collaboration with the Life Insurance Association Singapore, and reinsurance firm Swiss Re.

Three other doctors confirmed this practice, and two said they only came to know about it this year.

There are subtle differences in the practices of the four to five TPAs, they said.

Those affected are mainly specialists in private practice, as Integrated Shield plans are for hospitalisation.

The Singapore Medical Association (SMA), which represents the bulk of doctors here, said it is aware of the TPAs charging for the “referral” of patients with Integrated Shield plans or various managed care schemes.

SMA president Wong Tien Hua said: “The SMA is deeply concerned that when such admin fees are based on a percentage of what the doctors charge their patients, it can be interpreted to be fee-splitting or a commission paid to these agents. SMA is against such practices because they are against the best interest of

patients.”

The administrative fee charged by these TPAs should be based on their work and resources, not on the fees charged or work done by the doctor, added Dr Wong.

Patients and clients of these agents should be made aware that such fees are being paid, he said.

The SMA has sought clarification on the issue from the Singapore Medical Council, and is awaiting “definitive advice” from the medical watchdog, said Dr Wong.

Two private specialists told TODAY that clauses were added to their contracts with the TPAs, which they were unaware of until the latter claimed fees from them.

TPAs’ restrictions on the amounts doctors can charge their corporate patients were extended to the Integrated Shield policyholders of the insurer they represent.

Doctors said that they already have to follow stipulated fees that can be very low, and these fees are further creamed off by admin fees to TPAs.

There should be an absolute cap on administrative fees charged, a specialist added. Some stipulated fees imposed by TPAs for consultation or surgery can be half the amount specified in SMA’s fee guidelines a decade ago, she said. “It’s ridiculous.”

In 2007, SMA’s fee guidelines were removed over anti-competitive concerns.

Already, some senior doctors have pulled out of the panels — which could have implications on patients’ access to quality care, the doctors said.

Despite the unfairness, other doctors remain on the TPAs’ panels because of the competitive business climate, they said.

One TPA has contract clauses denying doctors the right to sue, or imposing a long notice period before being able to pull out of the panel, said another specialist.

It is fair to not want doctors to overcharge — although this happens only among a few bad apples, said Dr Tan.

Surgeon Dr Ho Choon Kiat suggested insurers talk directly with doctors on reasonable price ranges for various procedures.

But relief could be in sight, and such practices by TPAs could be curbed.

Speaking immediately after Dr Tan’s welcome address at Friday’s conference, Minister of State for Health Chee Hong Tat said he did not yet know enough about the practice to comment specifically.

“But if it doesn’t add value and it’s just a parasitic activity, it just adds on to cost, we should not allow it,” he said.