Doctors are no longer allowed to pay a third-party agent (TPA) a percentage of the fee they get from patients as it will infringe the new medical code of ethics which goes into force next month January 2017, the Singapore Medical Council (SMC) announced on 13 December.

The new Ethical Code and Ethical Guidelines which were released in September had been ambivalent on this issue, which was a matter of concern to doctors. The SMC had previously stated that fees should not be "primarily" based on the work done by doctors, or be "so high" to allow fee splitting.

Fee splitting is unethical as it could be misconstrued as paying a sales commission to the TPA. Some major TPAs have charged percentage fees for many years, however many doctors have complained in recent months as some have charged up to 25% of doctors' professional fees - especially medical concierges who collect payments just for referring a patient on a particular insurance scheme or panel.

TPAs might increase costs for patients

The SMC is therefore concerned that such fees could push up costs for patients. Previously, it said it was "deliberating" on whether doctors can continue paying TPAs a percentage of their bill under the new ethics code.

Now SMC president Tan Ser Kiat has made it clear that "fees that are based on a percentage of what doctors charge patients may be construed as a form of fee splitting".

The work done by a TPA in handling and processing patients "does not vary depending on the fees doctors charge patients", Professor Tan explained. Therefore allocating them a percentage of the bill to the patient would reflect the work done by the doctor, not the TPA - and is prohibited.

It would be considered a breach of professional ethics "regardless of when the doctor entered into such an arrangement with the third party", he added.

However, a grace period of six months is provided for the doctors to negotiate a new agreement and to prevent confusing patients. The guideline will be in full force on 1 July 2017.

TPAs reflect on SMC announcement

Some TPA companies such as MHC Asia Group and Parkway Shenton are willing to review their fee models in light of SMC's advisory.

MHC Asia Group's CEO Low Lee Yong said MHC is hoping to meet the SMC for a dialogue on the matter "since it affects the livelihood of over 1,200 doctors in our panel".

He defended the model of charging percentage fees, as a flat fee could ironically end up "punishing" doctors for keeping their fees low.

"A flat fee of S$5 is 25% to the doctor who keeps the healthcare cost low at S$20, But it is only 5% for the doctor who charges S$100," he explained.

Ms. Veronica Allen, CEO of Parkway Shenton, said it is studying the latest advisory from SMC and is in the midst of working out a fair fee structure that reflects the value it provides, yet benefits all doctors. It reported a flat 10% fee, but has decided before SMC's advisory to offer a variation of fixed and variable fees to be launched by the end of this year.

Fees must reflect fair work and transparency

Professor Tan reminded doctors that their duty is to always place patients' best interests above business or financial considerations and should consider if such agreements "will result in profiteering".

"The fees must reflect the fair work done by third parties in handling and processing the patients. The fees must also be transparent to the patient," he added.

Dr. Desmon Wai, a private gastroenterologist who has agreements with three TPAs, lauded the ruling as he views it as SMC's "efforts to clamp down unethical practices" by some medical concierges who introduce patients for profiteering purposes.

He said that he is fine with telling patients the exact amount that goes to the TPAs, which he says comes from his fee, and is not from a mark-up.

The SMC said, "The penalty depends on the extent of the misconduct, for example, it may vary from a letter of advice or warning to a formal disciplinary inquiry, depending on the circumstances." MIMS

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