Learn how Malaysia's e-Invoice implementation impacts healthcare providers, with guidelines for hospitals, consultants, and locum staff. Ensure compliance easily.
Malaysia’s e-Invoice implementation represents a significant move toward digitalizing invoicing processes across industries, including healthcare. Healthcare services, with their unique complexities in payment structures and operational setups, face challenges when transitioning to this system. This blog will explore how hospitals, independent consultants, and other healthcare providers can adapt to Malaysia’s e-Invoice regulations while ensuring compliance and maintaining operational efficiency.
Malaysia’s e-Invoice system is designed to enhance transparency, streamline tax processes, and improve accuracy in billing across industries. For the healthcare sector, this means shifting from traditional paper or digital invoices to e-Invoices that must be validated by the Inland Revenue Board of Malaysia (IRBM).
Hospitals and medical service providers are required to issue e-Invoices that capture detailed billing information, ensuring accuracy and compliance with Malaysian tax regulations. This involves changes in the way invoices are generated and submitted, especially in a sector as varied as healthcare, where billing can involve self-paying patients, insurance claims, or corporate arrangements.
In the healthcare sector, hospitals issue invoices based on several different payment models:
Under the e-Invoice system, hospitals will continue issuing invoices as per these models but must ensure compliance by issuing validated e-Invoices for each transaction. For patients who are minors, the guardian’s details will be included in the invoice to ensure proper documentation.
Hospitals may issue consolidated e-Invoices for transactions where patients do not require individual e-Invoices. For example, if a patient does not specifically request an e-Invoice, the hospital can aggregate invoices on a monthly basis. This helps reduce the administrative load while ensuring compliance with the seven-day submission requirement after the month-end.
This approach is particularly useful for hospitals with large patient volumes, allowing them to manage their invoicing processes efficiently without issuing individual e-Invoices for every transaction.
Many hospitals work with independent medical consultants who provide specialized services to patients. Two common billing models exist for independent consultants:
Both models are acceptable under the e-Invoice system, but care must be taken to ensure that each party issues e-Invoices that reflect their role in the service provision. Independent consultants must issue e-Invoices to hospitals or patients, depending on their contract terms, ensuring proper documentation of their services.
Hospitals often engage locum doctors and nurses to meet short-term staffing needs. The invoicing requirements for locum professionals vary depending on their contractual arrangement. If the locum is contracted through an agency, the agency is required to issue the e-Invoice. However, if they are treated as hospital employees, the payment falls under employment income, which is generally exempt from e-Invoicing.
In some cases, patients may be referred to another hospital for specialized treatment. Both hospitals are required to issue separate e-Invoices for the services provided during their respective treatment periods. This ensures that each institution’s services are clearly documented, and the IRBM receives accurate transaction details for tax purposes.
Many companies cover medical expenses for their employees. In such cases, the hospital will issue the e-Invoice to the patient, while listing the company as the payer. This ensures that all parties involved are properly documented, and the transaction is compliant with Malaysian tax laws.
Hospitals may also generate income through non-medical services, such as space rentals to independent consultants or cafes. For these services, hospitals are required to issue e-Invoices in line with their regular billing cycles, ensuring that all transactions are properly recorded.
For patients covered under insurance, hospitals can continue issuing proforma bills for insurance companies. The actual e-Invoice is only required after the final bill has been settled and the patient discharged. If the insurance company or patient requests an e-Invoice, it should be issued upon finalizing the billing process.
A hospital does not need to send an e-Invoice if it receives a refundable deposit. However, if the deposit is non-refundable, the hospital must issue an e-invoice. In cases where no e-Invoice is requested, hospitals can apply the consolidated e-Invoice treatment.
The implementation of e-Invoices in Malaysia’s healthcare sector is a crucial step toward digitalization and transparency. By adhering to the new guidelines, hospitals and healthcare providers can ensure compliance while streamlining their billing processes. From managing independent consultants and locum staff to handling corporate payments and referrals, it is important to adapt to these changes and make use of consolidated e-Invoices where applicable. The move to e-invoicing will not only improve efficiency but also provide a clearer, more transparent record for all financial transactions in healthcare.
