‘Some rotten apples, but not all TPAs are bad for healthcare’

SINGAPORE — Two third-party administrators (TPAs) have spoken up about their role in the healthcare landscape here in the light of a recent outcry by doctors over unfair practices of some players in the industry, which handles medical claims for employers and insurers.

Doctors were concerned that some TPAs were charging them administrative fees calculated as a percentage of what they charged patients. Such “administrative” charges put the doctors at risk of the unethical practice of fee-splitting, as they could be akin to paying a sales commission to the TPA.

On Monday in Parliament, Minister of State for Health Chee Hong Tat said the ministry is considering rules on the disclosure of TPA fee arrangements, especially if these fees are passed on to patients.

New ethical guidelines for doctors, which take effect next year, also state that fees paid by doctors to TPAs should be based on work done by the TPAs, and not based primarily on fees that doctors charge patients.

“A couple of rotten apples and oranges does not mean that the rest in the basket are bad,” said Dr Low Lee Yong, chief executive of MHC Asia Group, which administers medical benefit schemes on behalf of 11 insurers and several thousand corporate clients here.

TPAs play a “pivotal role” in managing healthcare costs and simplifying the administration of medical benefit programmes of insurers and corporate clients, he said.

Transparency is good for healthcare, said Dr Low, 53, who has been in the business for 22 years.

An effective TPA should be fair and transparent in its business practices towards the payer and provider, while ensuring the best and appropriate care for the patient.

According to Dr Low, two types of TPAs operate in the market — one functions more as a referral service akin to a medical concierge, while the other provides “legitimate services” to simplify healthcare services and manage costs.

Some players in the first group do not add much value “other than acting as an introducer to the specialists”.

Such specialists “may inadvertently pass on the cost charged by these parasitic providers” to the private patients or those on Integrated Shield plans, and disclosure of fee arrangements should be made upfront to the patients, said Dr Low.

The recent spotlight on TPAs has, in fact, been beneficial for MHC. Dr Low said it is getting more requests from doctors who have ended ties with other TPAs, to join its panel of clinics.

Among MHC’s services is an IT platform that allows employer-funded patients to have cashless outpatient consultations at its network of over 1,200 private clinics here. The company has used big data to detect instances of medical fraud.

Another TPA, Alliance Medinet, said it maintains quality of care for patients by preserving the professional autonomy of doctors.

“In our programmes, we do not restrict or interfere with doctors’ professional decisions, as long as they are based on good medical evidence,” a spokesperson said.

Alliance does not restrict the use of original medications, and doctors can make referrals to non-panel doctors if a particular area of expertise is not available on its panel.

Alliance did not comment on the possible rules to make TPA fee arrangements more transparent, but the spokesperson said it considers having a good reputation among doctors an important competitive advantage.

With private healthcare costs becoming very expensive, “a responsible TPA has a role to play, together with other stakeholders, to find a solution to make private healthcare accessible to more Singaporeans”, she said.

Alliance is involved in the handling of Integrated Shield claims, while MHC is not.

Three other TPAs contacted — Parkway Shenton, IHP and Fullerton Health, which is in the midst of seeking an Initial Public Offering — did not respond to TODAY’S queries.