PhilHealth faltering in fight against fraud
(Second of a series)
MANILA, Philippines — On the eighth floor of the Philippine Health Insurance Corp. (PhilHealth) building in Pasig City can be found the key to the longevity of scammers in the national health insurance company.
A paper shredder sits in one corner of the office of the Fact Finding Investigation and Enforcement Department (FFIED), which receives and investigates fraud complaints involving PhilHealth employees.
According to PhilHealth sources, who asked not to be named for security reasons, the paper shredder is the most useful tool for dispatching such complaints.
Official documents involving “protected” cases meet their doom on the machine, and the complaints are dismissed for “insufficiency of evidence.”
By law, PhilHealth’s organizational structure and procedures are designed to detect and arrest fraud.
But the system is bound to fail with PhilHealth employees themselves conniving with fraudsters and through either sheer neglect or downright deceit.
In an August 2017 press statement, PhilHealth said the board of directors had set up a “high level antifraud task force” that would “spearhead moves to prevent the occurrence and recurrence of activities that defraud the National Health Insurance Program.”
“The task force will review, improve or create processes, systems and policies to prevent fraudulent activities from recurring. It will also assess the composition and current functions of the [FFIED], and identify areas prone to fraudulent activities, considered red flags,” PhilHealth said.
The state health insurer’s performance audit for 2017, however, showed that the agency’s efforts at fighting fraud had borne little positive results.
Documents showed that PhilHealth was not allowed to give performance-based bonus to its more than 6,000 rank-and-file employees after it failed a performance review by the Governance Commission for Government Owned and Controlled Corporations (GCG).
Filing, resolving cases: zero
In his May 21, 2019, letter to Health Secretary Francisco Duque III and PhilHealth President Roy Ferrer, GCG Chair Samuel Dagpin Jr. said PhilHealth could not give the bonus after getting a failing score of 47.82 percent, based on “validation of documentary evidence.”
To qualify for the bonus, a state company must have obtained a score of at least 90 percent.
In the 2017 review, the GCG gave PhilHealth zero for filing of cases and for resolving cases against erring health care providers.
“Despite the conduct of two onsite validations [on Feb. 21] and [April 10], 2019, the accuracy of the reported accomplishment cannot be validated due to the absence of acceptable evidence,” the GCG said.
Documents showed that in 2018, PhilHealth processed 8.2 million of the 10.7 million “good” claims it received, or an efficiency rate of 76 percent.
The FFIED, on the other hand, processed 4,357 of the 5,797 cases it received that year, for an efficiency rating of 75 percent.
But PhilHealth’s prosecution department processed not a single case out of the 4,147 cases it had received. Only one of 730 cases was put through “arbitration.”
Pamela del Rosario case
“That paper shredder and the low score in the processing of fraud cases — put two and two together and you’ll get answers,” a PhilHealth source said.
It must have worked well in the failure of the fraud case against PhilHealth member Pamela del Rosario of Dagupan City.
As early as 2014, the antifraud unit of PhilHealth alerted the office of the regional vice president for Ilocos to the fraudulent claims of Del Rosario, allegedly facilitated by her sister Maria Elirene Zarate, a PhilHealth employee.
In its 87-page investigation report, the antifraud team said it had uncovered 27 fraudulent claims by Del Rosario for cancer treatment, which cost PhilHealth P1.17 million.
With Zarate working from the inside, Del Rosario was enrolled twice as a PhilHealth member, using in one membership a fake identity.
She enlisted fake dependents, faked her and her dependents’ hospital treatment, and used falsified pharmacy receipts as proof of expenses.
According to PhilHealth insiders, the scam involving Del Rosario is just one of the thousands of shady claims that pass through the benefits department, bleeding the company dry.
In its 2014 report, a copy of which was obtained by the Inquirer, the antifraud team recommended the filing of estafa, malversation, usurpation and graft charges, as well as a string of administrative suits against 13 people, including Del Rosario, Zarate and other PhilHealth employees led by Elvira Ver, the regional vice president for Ilocos then.
Citing conspiracy, investigators said the PhilHealth employees allowed Del Rosario’s claims to be processed and paid “despite the existence of numerous irregularities.”
Among the glaring defects the investigation had found in Del Rosario’s claims were the entry of fictitious people and dependents into the PhilHealth membership database; processing and payment of claims despite lack of requirements through “fast tracking”; and retroactive processing, meaning without the required number of member contributions.
“The fraudulent claims were too many to be left unnoticed,” the report said.
The team also recommended a full-blown inquiry into other claims that may have been processed and paid employing the Del Rosario scheme.
But no inquiry was launched. The scam persists, PhilHealth sources said.
The sources expressed dismay over the failure of the agency’s efforts to fight fraud, which allowed perpetrators like those involved in the Del Rosario case to go scot-free.
Documents showed that of the 13 people recommended to be criminally charged, only one PhilHealth employee, Zarate, was charged and ordered dismissed from the service by the Ombudsman.
In a July 2016 decision, Deputy Ombudsman Gerard Mosquera found Zarate guilty, and ordered her dismissed for grave misconduct and serious dishonesty, with forfeiture of benefits.
Zarate’s dismissal, however, could no longer be enforced, as she resigned from PhilHealth and left the country in 2014.
According to the antifraud unit’s report, Zarate began preparations to leave as soon as the investigation of Del Rosario’s claims was launched.
In September 2014, about the same time as the start of the investigation, she filed eight applications for leave for longer than a month, which were approved by her superiors despite lack of legal requirements.
After her leave, she turned in her resignation—and took off.
Escaped to Dubai
Sources said a check with the Bureau of Immigration showed that Zarate flew to Dubai in November 2014.
She reportedly followed Del Rosario and another sister, Maria Lourdes Salvacion, also an alleged partner in the scam, in the United Arab Emirates.
According to the documents, PhilHealth may no longer be able to hold Ver accountable as the approving officer of Zarate’s leaves and resignation because she had been reassigned to the central office before she retired in 2016.
“Transfer [to other offices] has been a usual PhilHealth recourse for officers who take too much heat. Similarly, those who try to fight the syndicate within are transferred,” a PhilHealth source said.
In June 2016, then PhilHealth President Alexander Padilla ordered the filing of administrative charges against four employees at the regional office in Dagupan City: Dr. Marlene Soliba, head of the benefits administration section; Cynthia Santos, head of the management service division; Jane Ragos, head of the fund management section; and Letecia Ravancho, head of the cashiering unit.
The four were accused of simple neglect of duty, PhilHealth sources said, but the cases were dismissed by the prosecution department for “insufficiency of evidence.”
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