Senators want PhilHealth Covid-19 fund suspended

By: - Reporter / @MRamosINQ
/ 05:30 AM August 13, 2020

MANILA, Philippines — Several senators on Wednesday said Philippine Health Insurance Corp. (PhilHealth) should suspend payments from the P30-billion interim reimbursement mechanism (IRM) following disclosures during the Senate inquiry into alleged corruption in the state-run health insurer that the distribution of special funds for the country’s response to the COVID-19 pandemic had been marred by irregularities.

“The current allocation system is a complete disaster and is a huge stumbling block for our hospitals to be able to effectively address the killer pandemic,” Sen. Francis Pangilinan told the Inquirer in a Viber message.


“Suspend all (IRM) releases, and revise and redistribute the approved allocations,” he added.

Pangilinan said the financial package may have been intentionally drawn up by some unscrupulous PhilHealth officials to line their pockets and not to help deal with the new coronavirus crisis.


AMLC probe

During a hearing called by the House of Representatives, senior PhilHealth executives told lawmakers they were willing to have their bank accounts scrutinized by the Anti-Money Laundering Council (AMLC).

But PhilHealth President and CEO Ricardo Morales and two other top officials of the health insurer were conspicuously absent and could not make the same pledge, as they left the hearing for the joint inquiry by the House committees on good government and public accounts early, citing health reasons.

On the prodding of Deputy Speaker Luis Raymund Villafuerte, Morales’ subordinates expressed willingness to sign a waiver of the bank secrecy law and to go through a lifestyle check by the AMLC.

“If they’re innocent and not hiding anything, are they willing to sign a document that [the] AMLC can check their bank [accounts]?” Villafuerte pressed the PhilHealth officials.

He received affirmative answers from PhilHealth Senior Vice Presidents Jovita Aragona, Renato Limsiaco Jr. and Israel Francis Pargas, and acting Senior Vice President Nerissa Santiago.

Five PhilHealth officials who took part in the hearing by Zoom video conferencing—Corporate Secretary Jonathan Mangaoang, Vice Presidents Oscar Abadu, Shirley Domingo and Gilda Diaz, and Area Vice President Walter Bacareza—made similar commitments.

Morales and PhilHealth Executive Vice President and Chief Operating Officer Arnel de Jesus and Senior Vice President Rodolfo del Rosario Jr. were already gone before they could be asked if they were willing to undergo AMLC investigation.


The House secretariat reported that Morales was “not feeling well.”

Anakalusugan Rep. Michael Defensor said De Jesus had to be taken to hospital for replacement of the battery of his pacemaker.

In the Senate, Sen. Panfilo Lacson agreed with Pangilinan, but noted that suspending the distribution of cash advances may adversely affect hospitals handling COVID-19 patients.

“[PhilHealth may] suspend the disbursements for a very limited period just to review the list of [hospitals] for purging of unauthorized recipients,” Lacson said.

“I think it will be more unfair to more deserving [hospitals] if the distribution of IRM funds is suspended [for a longer period],” he said.

COA audit

Lacson, who initiated the Senate inquiry along with Senate President Vicente Sotto III, said another option was for the Commission on Audit (COA) to conduct an external audit of the funds that had been given to hospitals.

“Those that cannot liquidate or found not qualified as beneficiaries based on the intent of the circular should be made to return the funds that they [had] received,” Lacson said.

At the resumption of the Senate probe on Tuesday, Lacson and his colleagues took turns in grilling Morales and his subordinates for prematurely authorizing the release of P9.3 billion several weeks before the guidelines for the use of the fund were approved on April 22.

Morales told the hearing that the PhilHealth board had been discussing the need to earmark funds for COVID-19 as early as January, a claim that board members Alejandro Cabading and Susan Mercado dismissed as false.

Robert Labe Jr., PhilHealth corporate counsel, insisted that the special financial aid was handed out in compliance with existing rules.
“The IRM is not provided arbitrarily,” he said.

Labe also disclosed that Southern Philippines Medical Center, a public hospital in Davao City, President Duterte’s hometown, was the recipient of the biggest chunk of the fund—P326 million. (See related story on this page.)

Prone to corruption

Sotto said he believed PhilHealth should suspend payments from the fund while questions about the disbursements remained unanswered.

“It would be better if we replace the entire (PhilHealth) leadership with reliable and incumbent employees whose records are clean so that the programs will not be hampered,” Sotto said.

Senate Majority Leader Juan Miguel Zubiri also found merit in suspending the payouts as he reiterated the need to prosecute all PhilHealth officials who had been previously implicated in the operation of an alleged “mafia” in the health insurer.

Zubiri agreed with Commissioner Greco Belgica of the Presidential Anti-Crime Commission that the failure of PhilHealth’s legal sector, now headed by Del Rosario, to hold errant employees accountable was a major reason why corruption persists in the company.

“This IRM is very prone to corruption,” Zubiri said at an online press briefing.

“Based on the questionable transactions that we have seen, we should actually suspend the release of IRM until (PhilHealth) can come out with a proper formula and accountability measures for these funds,” he said.

Zubiri said even COA chief Michael Aguinaldo was surprised upon learning during the hearing that PhilHealth had been releasing billions of pesos without the necessary guidelines that flouted the government’s rules on the use of public funds.

Worse, Zubiri said PhilHealth had only been able to account for P1 billion of the P14.9 billion in reimbursement funds that it had given out to hundreds of hospitals since March in violation of the mandated 60-day period to liquidate taxpayer money.

“No less than President Duterte said the government is running out of money. [Its officials] also admitted that PhilHealth is in danger of going bankrupt [in 2022]. That means every centavo should be accounted for,” Zubiri said.

Sen. Joel Villanueva stressed that the fund should only benefit hospitals treating COVID-19 patients since the program was specifically “designed to provide cash advances for medical facilities handling COVID-19 cases.”

He said hospitals should comply with the existing process of collecting benefit claims for patients who received treatment for other medical conditions.

“PhilHealth has all the power and authority to make it easier for hospitals and other medical facilities to expedite their regular process for claims,” Villanueva said.

“Private hospitals are already overburdened with the nonpayment of their claims, and if they are forced to close, our health-care system might collapse,” he said.

Dialysis center paid P45M

Meanwhile, Lacson said the Senate would summon officials of B. Braun Avitum Philippines to the next hearing after PhilHealth records showed the dialysis center received P45 million in advance payments from the health insurer although none of its five branches handled COVID-19 cases.

Lacson said that while the dialysis center was not registered in the Securities and Exchange Commission, documents showed a certain Eduardo Rodriguez was representing B. Braun as its managing director.

Speaking to reporters, Lacson said he would ask B. Braun officials to explain why P9.7 million in benefit claims paid by PhilHealth’s office in Cagayan Valley ended up in a rural bank in Balanga, Bataan.

“We will find out what’s so special with B. Braun,” he said. “In the first two hearings, it’s clear that there’s discrimination in selecting [hospitals that would be paid from the IRM] for COVID-19,” he added.

—With a report from DJ Yap

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