Managed Care and Third Party Administrators (TPAs)

Name and Constituency of Member of Parliament
Mr Desmond Choo
MP for Tampines GRC

Question No. 662

To ask the Minister for Health (a) whether the Ministry will consider regulating managed care and third party administrator (TPA) companies as healthcare entities; and (b) how can transparency on the fee arrangements between doctors, TPAs and insurers be improved.

Oral Answer

1     The Ministry of Health had earlier received feedback from medical professionals on their concerns with the charging practices adopted by some Third Party Administrator (TPA) companies. In doing the review, MOH has consulted professional bodies such as the Singapore Medical Council, the Singapore Medical Association, the Academy of Medicine Singapore and the College of Family Physicians Singapore; as well as industry associations like the Life Insurance Association. There is agreement amongst stakeholders that the charging practices must not compromise patient safety and well-being, and should not lead to escalation of healthcare costs.

2     Managed care companies (MCCs) and Third Party Administrators (TPAs) provide a wide range of intermediary services, including management of employer medical benefits and claims administration. Those that provide healthcare services directly to patients will be regulated under the Private Hospitals and Medical Clinics Act (PHMCA).

3     To provide clarity on how doctors should engage MCCs and TPAs, the SMC has recently revised its Ethical Code and Ethical Guidelines (ECEG) to state that doctors must not allow financial arrangements to lead to any compromise in the care of patients. Any charges which doctors pay to MCCs or TPAs should be commensurate with the actual administrative work done by these intermediaries in processing the cases, and not based primarily on the fees charged to patients. The revised guidelines will take effect from 1 January 2017.

4     To enhance transparency of TPA fee arrangements, the revised ECEG indicates that doctors should disclose any such arrangement and referral fees to their patients, if these fees are passed on to the patients. MOH is assessing if these disclosure requirements should be further reinforced through our regulations. We are also working with the Life Insurance Association (LIA) and the Integrated Shield Plan (IP) insurers to ensure that their appointed TPAs do not have any conflict of interest. In addition, the insurers should disclose to their policyholders any financial arrangements they have with the doctors.

5     MOH will monitor the situation and where necessary, we will not hesitate to take further steps to protect the interests and well-being of patients, and safeguard the integrity of our healthcare system.