PhilHealth funds used ‘like a blank check’ – Quimbo

Stella Quimbo

MANILA, Philippines — The interim reimbursement mechanism (IRM) of Philippine Health Insurance Corp. (PhilHealth) could be bloated by billions of pesos as cash advances released to hospitals not spent for treating the new coronavirus disease, COVID-19, could be diverted to other uses, an economist lawmaker found on Monday.

“It’s like a blank check and a free loan to hospitals,” said Marikina Rep. Stella Quimbo. “We will not only lose money to fraud. There’s also forgone income every year because funds are parked in hospitals.”

The IRM is an emergency program of PhilHealth that releases cash advances to hospitals and medical facilities during natural disasters and other unexpected events, including the COVID-19 pandemic.

Quimbo’s questioning of PhilHealth officials at the resumption of a joint House inquiry on Monday rang alarm bells about the scale of corruption in the issuance of the IRM, which the state-run health insurer halted last week.

“The implication is the IRM system is rotten,” said the lawmaker, a University of the Philippines health economist.

The minority lawmaker found that the P26.8-billion funding for the IRM might be excessive since her calculation showed that PhilHealth would need to shoulder only P3.3 billion in estimated hospital costs, based on the corporation’s own projection of COVID-19 admissions for 2020 and its current case rates.

“But PhilHealth set aside P26.8 billion [for IRM]. Why?” Quimbo asked at the third joint hearing of the House public accounts and good government committees.

She said that based on PhilHealth’s own estimate of 209,000 COVID-19 cases for 2020, only 20 percent were expected to develop difficulty in breathing and require hospital care.

“IRM allocations far exceed the estimated cost of COVID-19 hospital admissions,” she noted.

Based on Quimbo’s calculation, there should only be about 41,800 hospital admissions in 2020 for critical, severe and mild cases.

In total, that should amount to hospital costs of P3.3 billion based on PhilHealth’s case rates.

As much as P2 billion could be lost to fraud in such a system and another P541 million is also “forgone” in terms of investment opportunities, the lawmaker said.

Quizzed by Quimbo on the source of funding for the IRM, PhilHealth Senior Vice President Renato Limsiaco Jr. replied that it was taken from the corporate operating budget for 2020.

“So that fund can be used for other expenses? It can be used to purchase supplies and to pay the salaries of employees?” Quimbo asked.

Limsiaco replied in the affirmative.

“For example, P100 million was released [under IRM], but the claim so far is only P10 million. The balance of P90 million can be used by the hospital for other purposes, including salaries?” an incredulous Quimbo wondered.

“That is correct,” Limsiaco answered.

No control

Quimbo retorted: “So that’s why we’re having problems, Mr. Chair! Because there’s almost no control in the use of the IRM fund. I am shocked by the very liberal use of the IRM.”

The IRM was halted by PhilHealth last week on the prodding of lawmakers “to review its overall implementation and resolve issues arising from congressional inquiries.”

Several senators have asked that the program be stopped amid allegations of irregularities.

PhilHealth is in hot water after former officials blew the whistle on alleged “moneymaking schemes” in the corporation, including the alleged overpricing of an information technology project, manipulation of its financial statements, and reimbursements for COVID-19 treatment to health facilities that do not handle coronavirus cases.

Hospitals under probe

At Monday’s hearing, Anakalusugan Rep. Michael Defensor also revealed that 51 hospitals with records of fraud received P1.49 billion in cash advances from the IRM.

“Why didn’t they resolve the fraud cases before they released the IRM?” the chair of the House public accounts panel said.

Defensor cited PhilHealth’s own records showing a total 4,664 fraudulent cases, of which 768 occurred from 2013 to 2018 and 3,806 happened in 2019 and 2020.

In total, P1.49 billion was released to the 51 hospitals with fraud cases, according to the congressman. “In the eyes of the public and in our eyes, if these hospitals and institutions with fraud cases are still given funds by PhilHealth, that’s a scary guideline,” he said.

Padding of claims

The fraudulent cases include padding of claims, claims for nonadmitted or nontreated patients, extending period of confinement, postdating of claims, and misrepresentation by furnishing false or incorrect information.

Others involve unjustified admission beyond accredited bed capacity, unauthorized operations beyond service capability, and fabrication or possession of fabricated forms and supporting documents.

Health issues again hounded the discussion midway through the House inquiry as PhilHealth President and Chief Executive Officer Ricardo Morales, Executive Vice President and Chief Operating Officer Arnel de Jesus, and Senior Vice President Rodolfo del Rosario asked to be excused for various ailments.

Defensor revealed at the start of Monday’s hearing that Morales, along with De Jesus, Senior Vice Presidents Dennis Mas and Del Rosario, had signed a bank secrecy waiver to open their accounts to the scrutiny of the Anti-Money Laundering Council.

Nine other senior PhilHealth executives made a similar pledge during last week’s hearing.

The House investigation is parallel to the Senate’s own inquiry into a former PhilHealth antifraud legal officer’s revelation that members of the health insurer’s executive committee were part of a “mafia” or “syndicate” that allegedly made off with P15 billion in company funds in 2019.

Lawyer Thorrsson Montes Keith earlier alleged that Morales had become a “coddler” of the syndicate, a charge the latter denied.