THE Ministry of Health (MOH) is at the data collection stage to develop a data-based treatment payment mechanism through Diagnosis Related Groups (DRG).
Health Minister, Datuk Seri Dr Dzulkefly Ahmad, said DRG is a system for classifying and standardising medical cases based on three main components, namely diagnosis, treatment procedure and severity of disease to ensure that case classification and treatment payments are made fairly, transparently and based on clinical needs.
He said that for now, data collection for DRG is at the algorithm development stage including setting the treatment range for each medical case in a hospital.
"For example, appendix, for the same surgery with the same severity, the payment rate is set according to the DRG group, thus avoiding unreasonable differences in charges between hospitals.
"In the initial stage, the implementation will focus on collecting clinical and financial data to develop the DRG logic or algorithm, and setting reasonable treatment costs.
"Currently, the DRG implementation is in the phase of collecting minimum data to develop the DRG system algorithm, as well as training and enabling private hospitals, to ensure technical and operational readiness," he said during a question and answer session at the Dewan Rakyat, today.
He said this in response to a question from Rodziah Ismail (PH-Ampang) who asked the health minister to state the latest status of the implementation of DRG in the private health industry.
Rodziah also wanted to know the regulatory and monitoring measures that would be taken to ensure that insurance or takaful operators do not interfere with the medical decisions of specialists and doctors as well as private hospitals.
At the same time, Dzulkefly said that the use of DRG in the private health sector is part of a cross-agency initiative implemented through a nationwide approach.
He said that the initiative was outlined under the RESET strategy, which is monitored by the Joint Ministerial Committee on Private Healthcare Costs (JBMKKS).
He said that to date, 80 hospitals out of 104 hospitals have registered for training through 23 sessions, which shows a good level of acceptance and commitment from private hospitals towards the implementation of DRG.
"Emphasis is given to the standardization of clinical and financial data as the basis for effective and sustainable implementation of DRG.
"DRG is expected to be a catalyst for the healthcare system's transition towards value-based healthcare, as well as promoting efficiency, cost transparency, and more prudent use of resources so that private hospitals do not make excessive claims," he said.
He said MOH views seriously the issue of interference by insurance/takaful operators and Third-Party Administrators (TPAs) in treatment management, which has the potential to influence the clinical decisions of medical practitioners.
He said that in order to address this matter fairly, MOH stressed that any action that could threaten the freedom of medical practitioners to carry out their responsibilities to treat patients could be interpreted as inconsistent with the existing legal provisions in the Private Healthcare Facilities and Services Act 1998 (Act 586). – February 4, 2026
