TF must probe PhilHealth — Go
Lawmakers in the Senate and House of Representatives on Wednesday scored the Philippine Health Insurance Corporation (PhilHealth) leadership over the alleged large-scale corruption in the agency.
This merits the creation of an investigative task force by the Senate that will look into the accusations.
The House meanwhile is casting doubt that the actuarial life of the agency is down to one year due to coronavirus disease (COVID-19) pandemic.
Senate Health and Demography Committee chairman Christopher Lawrence “Bong” Go recommended the creation of a task force that will investigate the corruption issues hounding PhilHealth to President Rodrigo Duterte.
Go noted that the alleged corruption in the agency has been investigated by the Chamber almost every year and its president and CEO was replaced four times already since the start of Duterte’s term but nothing seemed to change.
“Despite the ongoing efforts to reform PhilHealth, it remains to be tainted with allegations of systemic corruption, particularly in the middle to lower levels of its organization,” he lamented.
“We cannot simply rely on its leadership to cleanse its ranks. We need a ‘whole-of-government’ approach through a Task Force that has enough ‘teeth’ to investigate, audit, prosecute, file charges and put in jail those responsible for these anomalies,” he added.
This was the same sentiment during the hearing of the House Committee on Public Accounts where Anakalusugan Rep. Michael Defensor grilled PhilHealth president and chief executive officer Ricardo Morales over its case rate system which was believed to be the “root cause” of corruption within the agency.
Defensor lamented that PhilHealth setting a fixed cost for the treatment of certain diseases resulted in billions of “overpayments.”
Citing a Commission on Audit (CoA) report, Defensor said the total estimated amount of incurred loss by PhilHealth to overpayments and fraud from 2013 to 2018 due to the case rate system is P153.7 billion.
Under the system, PhilHealth would pay the hospital the amount of the package set for a treatment of a certain disease even if the cost incurred by a member is much less.
Defensor slammed PhilHealth for continuing with the system even as he claimed that this was repeatedly disallowed by state auditors.
“All reports of Commission on Audit would assail the case rate system. They continue following the system even it has been repeatedly been disallowed by CoA,” the lawmaker stated.
Morales, however, defended that CoA confirmed it did not find losses amounting to P154 billion in any of its audited financial statements of the state agency in the past five years due to the case rate.
A letter dated 10 June 2020 by CoA read by Morales stated that “alleged losses of P154 billion did not appear in the published CoA annual report on PhilHealth.”
But CoA representative Cleotilde Tuazon clarified that they found irregularities in the case rate system although these were not reflected in the letter read by Morales.
“What President Morales said is in the letter, it doesn’t reflect fraud because, of course, they will not put out the financial statements,” Tuazon expressed.
“It was very clear what the CoA said that it could not be seen in the financial statements. However, we have findings regarding that,” she added.
The auditor likewise noted that state auditors have repeatedly recommended to PhilHealth to reform the case rate system.
One such recommendation is for PhilHealth to pay whichever is lower — the actual cost of treatment or the case rate.
Defensor, on the other hand, suggested for the state insurer to abandon using the case rate altogether.
Instead, the agency should implement a system which allows it to pay the actual treatment cost of its members.
“We would like to request PhilHealth board to have a clear policy. Stop the case rate policy which has been the root of corruption in the PhilHealth,” he expressed.
As for the P30 billion budget it released for the government’s COVID-19 response, P2.5 billion could potentially be lost to corruption due to the case rate system, according to Defensor.
“I can assure you, there will be corruption there of the P30 billion. For mild pneumonia alone which is P43,000, there are many which cost much lower than what PhilHealth intends to pay,” he said.
Morales, on behalf of PhilHealth, explained that case rates for COVID-19 cases are constantly being adjusted depending on the market cost of medicines and medical procedures.
While he said using case rates is a global practice, he also admitted that there is a need for its constant review.
Despite the ongoing efforts to reform PhilHealth, it remains to be tainted with allegations of systemic corruption, particularly in the middle to lower levels of its organization.
“There is a need for a constant review of case rates, but it cannot be done due to the lack in manpower,” stated Morales.
The PhilHealth chief said resolving this issue would be through the implementation of the Universal Health Care (UHC) law.
“Under the UHC, we will have a global budget where the fund will be passed on to the health care provider network in the provinces’ LGU and they will manage the budget. That’s the long-term solution to the problem of case rates which doesn’t fit the actual expense,” he said.
On the overpayments made to hospitals, Morales disclosed there is no reimbursement scheme in place to recover the excess money paid to hospitals.
Meanwhile, Marikina Rep. Stella Quimbo doubts earlier claims that PhilHealth’s actuarial life is down to one year due to national public health emergency.
In the same hearing, Quimbo urged the agency to allow a third party to validate its projections on its actuarial life.
“Give us an actuarial validation and this validation should be done by a third party. If possible, have an external validation,” the lawmaker asserted.
PhilHealth acting senior vice president Nerissa Santiago during the inquiry reiterated anew that PhilHealth’s expectancy is now down to a year due to decreased collections and increased payouts due to COVID-19 crisis.
Quimbo questioned why this is so considering that the agency will be able to still collect from its members, arguing that in 2019, it collected P18 billion from government employees and P69 billion from indirect contributors.
It was also able to collect P50 billion from private employers, Quimbo said.
Quimbo claimed that the collections from the private sector is the only one at risk.
“The way I look at it, there is a substantial amount of collections. It means you just have to exert a little more effort,” she said.
Save PhilHealth, remove top officials
Senate President Vicente Sotto III and Senator Panfilo Lacson, in separate interviews, stressed that the top brass of the agency must be let go to save it from bankruptcy as funds that will resuscitate PhilHealth will be put to waste if the alleged corrupt high-ranking officials will stay in their positions.
The Senate panel is currently investigating PhilHealth’s overpriced ICT equipment, alleged manipulation of PhilHealth’s financial statements, and the irregular implementation of advanced payments to health care institutions through the Interim Reimbursement Mechanism policy, among others.
All reports of Commission on Audit would assail the case rate system. They continue following the system even it has been repeatedly been disallowed by CoA.
“I am afraid of the (shortened) actuarial life if corruption will persist in the agency. It is important to clean the top ranks. If they replaced the President-CEO but the same Executive Committee members were retained, then it will be nonsense. Those are the same people who allegedly did corruption in the past,” Sotto pointed out.
“Let’s clean the ranks first. Not (what General Morales pointed out) which was the relationship of the hospitals and those who are in the lower ranks. The higher officials first because the transactions there are at a different level. If that happens, Congress will help them because there are many ways,” he added.
Lacson echoed the Senate chief’s stance, saying the government cannot just put more money in PhilHealth if the officials can overprice procurements and remedy the official audit reports blatantly.
“Malacañang issued a statement through Secretary (Harry) Roque. He said that the government will not let PhilHealth lose funds and rightly so but wait, they should make a way to ensure that we do not lose the money we give yearly on top of the contributions,” he noted.
State auditors have repeatedly recommended to PhilHealth to reform the case rate system.
Lacson added that it “bears watching” what Duterte will do to those who were investigated for alleged corruption including those who were included in the initial findings of the Philippine Anti-Corruption Commission.
“The fact that there is corruption that is going on and continues to go on inside PhilHealth, there should be drastic steps that Malacañang should undertake. It is not right to put them under the trust and confidence blanket. Like now, the PACC itself submitted a report. We want to know and see what the Executive Department will do about it,” stated the senator.
He segued to the last-minute backing out, citing security reasons, of one of the key witnesses on the supposed irregularities and corruption in the agency.
Lacson said Morales’ head executive assistant, Etrobal Laborte, decided not to push through with his testimony because he is being threatened and opted to just resign from his post.
Laborte was supposed to testify before the Senate Committee of the Whole last Tuesday along with resigned PhilHealth Anti-Fraud Officer Atty. Thorrsson Keith and sitting Board Member Alejandro Cabading.
“A few weeks ago, Col. Laborte signified and contacted our office saying he wanted to seek an audience. So, I set up the meeting but at the last minute he notified us saying he will not push through because he is under threat and he will just resign,” Lacson bared.