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Blue Ribbon hearing on PhilHealth fraud




Senator Sonny Angara

Senator Sonny Angara

The Senate Blue Ribbon Committee, for which I sit as Vice Chairman, recently held its first hearing to investigate the allegations of unconscionable levels of fraud at the Philippine Health Insurance Corporation (PhilHealth).

It became clear that PhilHealth has a multitude of structural problems that have led to the situation where individuals and health care providers are able to defraud the government of its funds—to the tune of P154 billion it seems since 2013—that should be going to Filipinos struggling to cope with their medical needs.

Apparently, there are unscrupulous individuals in PhilHealth who have access to the database of members and are manipulating the processing of claims. These people appear to have very broad discretionary powers that allow them to increase, deflate and accelerate the processing of claims for their own benefit.

On top of that, we learned that the current system can be very porous in that even when very serious issues have already been raised about claims made by a service provider the threshold for proof appears to be too high before any preventive or punitive action is taken.

For instance, as early as February 2019, a recommendation was already made for the accreditation of WellMed to be withdrawn based on investigations by PhilHealth’s Fact-finding, Investigation and Enforcement Department (FFIED).  WellMed is the Quezon City clinic alleged to have used the names of deceased patients to make claims for dialysis payments.

However, the recommendation was disregarded by the accreditation committee at the central office because of several factors including an internal policy related to the withdrawal of accreditation and fraud cases, and the need for “absolute guilt” of the healthcare provider to be established first before action is taken.

In contrast, the Centers for Medicaid and Medicare Services (CMS)—the PhilHealth’s counterpart in the United States—has the authority to suspend payments to a healthcare provider on the mere existence of reliable information “that an overpayment exists, when payments to be made may not be correct, or when there is credible allegation of fraud existing against a provider,” according to CMS Transmittal 670 (Emphasis mine).

Clearly, much should be done to strengthen Philhealth’s anti-fraud system. More “integrity units” can be created to vet, validate, and verify claims.  There should be an internal affairs services (IAS) similar to what the Philippine National Police (PNP) has that will monitor procedures and processes.

During the Blue Ribbon Committee hearing, Philhealth President and CEO Bgen. Ricardo C. Morales shared that there are currently only 12 lawyers and investigators in their entire bureaucracy.  Worse, some were hired only on a contractual basis.  Thankfully, Bgen. Morales said that Philhealth has been given the authority to recruit up to 128 lawyers and investigators.

For a multi-billion corporation, PhilHealth should also have in place a strong information system that is capable of coming up with a more transparent—and hence, accountable—billing process. If the telcos are capable of counting, up to the last second, the calls and texts of tens of millions of its subscribers, then why can’t PhilHealth do something similar so that its members would be able to know how much they will have to pay for their hospitalization?

In fact, such systems already exist in banks around the world where automation, algorithms and artificial intelligence are used to flag transactions, and prompt authorities to investigate further. Clearly, some technology should be infused into Philhealth’s systems to safeguard taxpayers’ money which has been allotted for their health and welfare.

Indeed, a comprehensive, well-manned and tech-enabled anti-fraud system is a necessary expense. The cost may be significant, but it is nevertheless self-recouping because it deters the fraud and corruption that leaves a gaping hole in PhilHealth’s coffers.

But even without such an anti-fraud system, punitive action can already be taken. It should be noted that both the PhilHealth charter and the Universal Healthcare Act contain penal provisions against illegal acts. Has PhilHealth been able to go after anyone from within its ranks who were involved in these scams? Isn’t it disturbing that we do not seem to hear about any PhilHealth personnel being charged either administratively or criminally? (30)

Email:| Facebook, Twitter & Instagram: @sonnyangara

Senator Sonny Angara has been in public service for 15 years—9 years as Representative of the Lone District of Aurora, and 6 as Senator. He has authored and sponsored more than 200 laws.  He recently won another term in the Senate.



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