Keep cashless reimbursements, private hospitals tell insurers

 

Bank Negara said Malaysia’s medical inflation reached 15% last year, significantly higher than the global and Asia-Pacific average of 10%.

PETALING JAYA: 

The Association of Private Hospitals Malaysia (APHM) wants insurance firms to continue the current practice of cashless reimbursements, saying this is in the best interest of patients.

Following an engagement on medical inflation with government officials, Bank Negara Malaysia as well as insurance and takaful operators, APHM said cashless reimbursements would ensure continued access to care for patients.

“APHM hopes that insurance companies will maintain cashless reimbursements and not remove this option for private hospitals, as both private hospitals and insurance and takaful operators move forward together on aligned initiatives,” it said in a statement.

“Cashless reimbursements” refers to the system where the policyholder does not need to pay for medical expenses upfront and then wait for reimbursement. Instead, the insurance company directly settles the bill with the healthcare provider.

The association representing private hospitals said it largely supported the insurance sector’s proposed recommendations on the issue but submitted eight proposals of its own at today’s meeting.

This included the formation of an industry-wide working group involving APHM and insurance and takaful operators.

It said there was a need to develop effective communication strategies to promote the appropriate use of medical policies by all stakeholders, including patients and insurance agents.

“Furthermore, hospitals and insurance or takaful operators would be able to effectively collaborate on public education initiatives to empower policyholders with the knowledge they need to make informed healthcare decisions and better understand their coverage.”

It also suggested the establishment of an independent healthcare cost and reimbursement review committee to regularly review insurance premium prices and reimbursement structures.

This is to ensure the prices align with actual healthcare costs and market conditions, it added.

In December, BNM announced interim measures to mitigate the impact of the expected increase of between 40% and 70% in health insurance premiums.

The central bank said insurance and takaful operators will be required to spread out the increase in premiums over a minimum of three years.

It also said Malaysia’s medical inflation reached 15% last year, significantly higher than the global and Asia-Pacific average of 10%, which it attributed to medical technology advancements and the rising prevalence of non-communicable diseases among Malaysians.

BNM said this triggered greater demand for healthcare services, leading to claims paid out by insurers rising faster than premiums collected. - FMT