PhilHealth mess: Crime of the year
We are confident that through the investigation, the truth will eventually come out
Resigned Philippine Health Insurance Corporation (PhilHealth) Anti-Fraud Officer Atty. Thorrsson Montes
Keith on Tuesday claimed that state insurer President and CEO Gen. Ricardo Morales directed him “to remedy” the issue of overpriced
coronavirus (COVID-19) test kits with the Philippine Anti-Corruption Commission (PACC).
“There was an instance when I was ordered by Brig. Gen. Morales to go to Commissioner Greco Belgica to remedy PhilHealth’s case regarding the overpriced testing kits,” Keith said during the Senate Committee of the Whole’s hearing on the alleged irregularities and corruption within the agency.
“I refused to heed the order and told General Morales, ‘What will Commissioner Belgica think of me if I talk to him regarding the case?’ Brig. Gen. Morales turned red when I said that, (Head Executive Assistant) Col. Etrobal Laborte was right beside us,” he added.
There was an instance when I was ordered by Brig. Gen. Morales to go to Comm. Greco Belgica to remedy PhilHealth’s case regarding the overpriced testing kits.
Senate Minority Leader Franklin Drilon earlier questioned the PhilHealth’s overpayments on the COVID-19 testing packages during the last Senate Committee of the Whole’s hearing on the government’s overall response to the pandemic.
Drilon said that the package cost P8,150 per test which is twice the price of COVID-19 test in other hospitals and facilities. He claimed that their research showed that the test kits procured from China costs only P1,500 per packet.
Additional expenses for overhead and other materials will approximately cost P2,000 plus a margin of income which is “roughly” P500.
Drilon said that the “reasonable” testing cost is around P4,000 pesos — the same amount the Philippine Red Cross charges for its COVID-19 tests.
The purported overpricing of COVID-19 test kits was one of the reasons Keith quit as an anti-fraud officer of the state health insurer. He said he can “no longer stomach” the alleged “widespread corruption” in the agency which came to light after a shouting match among PhilHealth board members during a virtual meeting last 23 July.
Keith, in his opening statement during the Senate inquiry, maintained that the apparent cycle of corruption is perpetrated by the “mafia” that still operates inside PhilHealth.
“I believe that the syndicate in PhilHealth wants to milk overseas Filipino workers to cover up for the amount of money they’ve stolen,” he said.
“What I discovered in PhilHealth can be called as the crime of the year for reason that the reason that syndicate commits this through the cash advance or interim reimbursement mechanism and the overpriced procurement of IT equipment,” he added, noting that more or less P15 billion was lost because of the alleged irregularities in the agency.
Keith said that apart from the PACC, he also brought up the said anomalies with resident auditors from the Commission on Audit (CoA) and National Bureau of Investigation (NBI).
He claimed that he also informed PhilHealth Senior Vice President for Operations for All Areas, Brig. Gen. Augustus de Villa, about the alleged irregular activities.
Morales, meanwhile, justified the information technology (IT) project, which was allegedly overpriced, explaining this will bust fraud in the health insurance system in the country.
The PhilHealth chief, citing Advancement of Clinical Epidemiology Inc’s study completed in December 2019, said the agency has a 7.2 percent fraud index.
“In other words, of the P136 billion PhilHealth spent last year on benefit payments, P10.2 billion was potentially lost to fraud,” he told the Senate Committee of the Whole.
“Next year, if the right thing is not done, of the P240 billion planned benefit expenditure, this potential loss will balloon to P18 billion. Global average is 10 to 10 percent,” he added.
Morales likewise noted that the P7.5 percent is the “mother” of all problems inside the state health insurance agency and this is what his leadership wanted to combat.
The solution, he said, is the procured information system, which was flagged by the lawmakers and the Commission on Audit as exorbitant.
Morales further justified that only this IT system can keep track of the P109 million PhilHealth members; 40,000 accredited health care professionals; 8,500 health care facilities; 35,000 claims per day; and the PhilHealth’s P2 billion payout every week.
“If the corporation stands to lose tens of billions a year through fraud which can be avoided by information technology, then alleged overpriced P2.1 billion IT program over three years appears paltry needed,” he said.
However, PhilHealth Board Member
Alejandro Cabading, who also testified before the Senate body, argued there are discrepancies in the IT and financial systems of the state insurer.
Cabading bared that the IT sector has submitted a proposal for a P2.1 billion IT project but there were no items specified in the proposal.
I believe that the syndicate in PhilHealth wants to milk overseas Filipino workers to cover up for the amount of money they’ve stolen.
Although the IT sector headed by Senior Vice President Jovita Aragona was asked to itemize the proposal, the data they submitted are “vague and scrambled” which Cabading tagged as an “attempt to confuse the board.”
Cabading asserted that Morales supported the additional proposal by Aragona worth P750 million for the procurement of various IT equipment. Another P215 million was also requested again by Aragona.
His office, however, cannot give the green light to the proposal as the Internal Audit Report has yet to be completed.
Senator Panfilo Lacson, for his part, expressed disdain over the procurement of network switches with a contract price of P4.814 million compared to the market price of P939,360 or a loss of P3.878 million for the government.
“Where is the conscience of those who did this? We cannot understand who would have the heart or conscience to procure such items,” Lacson asked.
PhilHealth previously bought 24 network switches for P74.3 million or P3.09 million per unit.
But the Commission on Audit found that the switches were still not utilized and still in their boxes.
“We are confident that through the investigation being conducted by Undersecretary (Jesus Melchor) Quitain of the Presidential Management Staff and Special Office of the Presidential Assistant and the Senate, the truth will eventually come out,” presidential spokesman Secretary Harry Roque said.
The Palace official likewise reacted to remarks made by PhilHealth Acting Senior vice president and Concurrent vice president and Data Protection Officer Nerissa Santiago that the state insurance company’s actuarial life can only last up to one year or until 2021 if the COVID-19 pandemic persists.