Practice by Managed Care Companies for Doctors to Pay Administrative Fees for Referral of Patients

Mr Desmond Choo asked the Minister for Health (a) whether the Singapore Medical Council is aware that some managed care companies require doctors to pay administrative fees for the "referral" of patients and, if so, what is their response; and (b) whether this practice will result in patients having to pay more.

Managed care has been a feature of our healthcare landscape for many years. Managed care companies serve to provide intermediary services to various stakeholders, such as insurers, corporations, healthcare providers and patients.

In recent months, the Ministry of Health (MOH) and the Singapore Medical Council (SMC) have received feedback from individual doctors and the Singapore Medical Association (SMA) regarding managed care companies, or third-party administrators (TPAs), entering into contracts with doctors, where the doctor would commit to pay a fee for each patient referred by the TPAs.

This raises concerns that TPAs' decisions on patient referral may be influenced by the fee arrangement rather than the interest of the patients. The doctor may, in turn, pass on the cost of the referral fee to the patient through higher charges. In some cases, the patient may not be aware of this, especially if his bills are fully covered by his insurance plan or employee benefits. It is of particular concern if the fee is determined as a percentage of the doctor’s charges, without relation to the actual services rendered by the TPA.

The SMC is revising its current Ethical Code and Ethical Guidelines, which already address fee-sharing between doctors, to also address fee-sharing between doctors and TPAs. The revised guidelines will explicitly state that doctors must not allow financial arrangements in managed care to lead to any compromise in the care of the patient.

MOH is also working with the medical professional bodies and associations to raise doctors' awareness of appropriate arrangements with TPAs. We will continue to work with the Life Insurance Association to remind the Integrated Shield Plan insurers to ensure that their appointed TPAs, if any, should not have any conflict of interest and should disclose to policyholders any financial arrangements they have with the doctor.