Lawyer tags ‘coddler’ of PhilHealth syndicate; show proof, Morales says

MANILA, Philippines — Ricardo Morales, Philippine Health Insurance Corp. (PhilHealth) president and CEO, has become the “coddler” or “new leader” of a syndicate in the state-run corporation by allowing the allegedly irregular disbursement of a P30-billion fund for the COVID-19 pandemic, according to a former antifraud officer of the agency.

Lawyer Thorrsson Montes Keith dropped the latest bombshell exactly a year after President Duterte appointed Morales during his State of the Nation Address and tasked him with cleaning up the graft-ridden corporation following the Inquirer’s series of investigative reports on massive corruption in PhilHealth.

Amid fresh allegations of corruption and fraud in PhilHealth, Mr. Duterte is not about to let the ax fall on Morales, according to Sen. Christopher “Bong” Go.

Go, the President’s former longtime aide, said that while Mr. Duterte “still trusts” Morales, he would not think twice about dismissing the PhilHealth chief if the accusations against him would be proven true.

Senate President Vicente Sotto III and Sen. Panfilo Lacson, meanwhile, filed on Monday Senate Resolution No. 475 urging the chamber as a committee of the whole to look into the “rampant and pervasive allegations of corruption, incompetence and inefficiency” in PhilHealth.

In the House, Parañaque Rep. Joy Tambunting filed House Resolution No. 1066 urging the committee on good government and public accountability to launch an investigation into the allegations against Philhealth.

In a letter to Morales dated July 26, Keith reiterated that there was “widespread corruption in PhilHealth” as what he mentioned in his resignation letter of July 23.

“I believe that you, Morales, may have become the [coddler] or may have been the new leader of the syndicate in PhilHealth,” Keith told the PhilHealth chief.

He said he believed that Morales had appointed members of the PhilHealth syndicate “who perpetrated the WellMed ghost patient dialysis despite our warnings.”

Keith was referring to WellMed Dialysis Center, which allegedly cornered millions of pesos in fraudulent claims of dialysis patients, a number of whom were already dead, with the connivance of PhilHealth employees.

Whistleblowers earlier disclosed that the state-owned insurance corporation could have lost up to P154 billion in various rackets perpetrated by a group in PhilHealth that operated like a “mafia.”

Morales reiterated on Monday his call for his accuser to substantiate all of his allegations of corruption against him and the state insurance firm.

“He should identify the officials [he’s referring to] and provide specifics to what he is saying,” Morales said in a radio interview in response to Keith’s allegation that he may be the “new leader of the syndicate” at PhilHealth.

‘Splitting of contracts’

In a phone interview, Keith said he was in possession of documents to back his claims that the PhilHealth chief was well aware of the irregularities in the government agency.

Asked to substantiate his allegation that Morales was part of the syndicate, Keith said he was present in one of the meetings that the PhilHealth president attended in which senior executives openly discussed the “splitting of contracts.”

“They wanted to make it appear that they were buying different [equipment] when in fact, they are actually buying the same thing. That’s why they are splitting the contract,” he said.

He said he was ready to testify against Morales. “PhilHealth will be bankrupt because of them.”

Keith initially thought Morales was just being duped by his subordinates. “But why did he issue orders [that allowed corruption]?” he told the Inquirer.

Keith questioned Morales’ issuance of a memorandum on June 16, which allowed the deferment of liquidation for the implementation of the Interim Reimbursement Mechanism (IRM), a P30-billion financial package allotted to hospitals treating patients infected with the new coronavirus.

Converted into ‘intel funds’

He said it practically converted the multibillion-peso fund into “intelligence funds” of state agencies, which are usually exempted from strict auditing process by the Commission on Audit.

In addition, Keith said PhilHealth Executive Vice President and COO Arnel de Jesus signed another memorandum on July 15 that made the liquidation for IRM “optional.”

He said the twin orders from the state insurer’s two highest officials allowed hospitals and PhilHealth officials to escape accountability in the use of public funds.

“Why will they let [IRM] to be used like intelligence funds? It’s contrary to the circular for IRM,” he said.

Keith said the release of IRM funds as “advance payment” to hospitals also contravened the government’s procurement system, arguing that such arrangement was only allowed for purchase of equipment and not for service contracts.

PhilHealth’s resident auditors have discovered that several unaccredited hospitals and other health facilities that had no COVID-19 cases were able to receive IRM funds.

They implicated PhilHealth Senior Vice President Renato Limsiaco Jr. and a “former acting president and CEO” in the distribution of “cash bonanza” to alleged favored hospitals in provinces with low COVID-19 infections.

Morales acknowledged that the corporation had released funds to hospitals under the IRM, even to hospitals that have pending cases with PhilHealth.

Advances to 600 hospitals

He explained that this was because back in March the agency had no idea which areas in the country would see a surge in COVID-19 cases. “It was approved by the board and we advanced [funds] to around 600 hospitals nationwide.”

Morales disputed Keith’s claim that the liquidation of these funds was optional. “I don’t think he knows what he’s talking about.”

According to Morales, he is open to any investigation as he assured that he would not run away from all the allegations.

Keith also faulted Morales for PhilHealth’s failure to withhold income taxes for the IRM disbursements despite it being mandated to pay taxes as a corporation.

—With a report from DJ Yap