Raffles Health Insurance is reportedly taking action to recover medical fees that embattled water treatment firm Hyflux failed to pay it for staff medical treatment.

The issue arose after Hyflux stopped making prompt payment for employee healthcare early last year.

While Raffles Health Insurance failed to receive payment from Hyflux, it continued to pay its panel clinics for services they provided to the company's staff. The arrears are not large in most cases - up to $700 or so for each clinic.

Chinese-language daily Lianhe Zaobao said Raffles is now seeking to recover the medical fees from these clinics.

A spokesman for parent firm Raffles Medical Group said it is seeking "an amicable resolution" with the affected parties, but did not disclose the full amount owed or the number of clinics involved.

Hyflux and Raffles terminated their agreement in mid-2018.

Raffles Health Insurance, a unit of Raffles Medical Group, is a third-party administrator that handled Hyflux staff's medical claims.

When an employee visited a doctor, Raffles Health Insurance paid the fee first before claiming the money from Hyflux.

Hyflux fell on hard times when it overestimated the ability of its integrated water and power plant, Tuaspring, to turn a profit. The plant has been a drag on earnings since it began operations in March 2016, and has been taken over by national water agency PUB.

Hyflux has been seeking court protection to reorganise its debt.

Early last year, Raffles Medical Group noted that Hyflux had not been prompt in making payment for employee medical treatment, said a group spokesman.

"However, to ensure continuity of care for Hyflux employees, we continued to pay panel clinics for medical services rendered to Hyflux employees, so that the panel clinics' cash flow would not be affected," the spokesman added.

Around 90 per cent of those clinics are owed less than $700 each.

"The total exposure is financially not material to the group and has been fully provided for in our accounts," said the spokesman. "We strive to engage all affected parties for an amicable resolution on this matter."

A Hyflux spokesman said yesterday that the company filed for a moratorium on May 22 last year.

"Under the moratorium, there are certain restrictions on the payment of debts incurred prior to May 22, 2018," she added.

"There is no disruption to the healthcare insurance cover for employees."

Seow Bei Yi