P1.2 billion lost in racket using fake PhilHealth receipts
MANILA, Philippines — Some P1.2 billion in contributions from migrant Filipino workers has been lost to fraud in Philippine Health Insurance Corp. (PhilHealth) that involved the use of fake receipts, a former employee of the state-run health insurer told a hearing at the House of Representatives on Wednesday.
During the House inquiry into allegations of irregularities in PhilHealth, Ken Sarmiento, the former employee, told a joint hearing held by the committees on government and on public accounts how company officials failed to press charges against the people behind the fake receipts fraud that the Inquirer exposed through a series of investigative reports in June last year.
Sarmiento detailed how he, as then senior auditing systems specialist on PhilHealth’s overseas Filipinos program, discovered the use of fake receipts to cover for migrants’ contributions that their recruitment agencies collected from them but never remitted to the company.
Official estimates have placed PhilHealth losses in the racket at P1.6 billion, according to Anakalusugan Rep. Michael Defensor, head of the public accounts committee.
Inquirer investigative series
The Inquirer investigative series found that the racket had been running since 2015, defrauding 7,257 migrants, and costing PhilHealth P17.4 million in lost premiums.
The modus operandi involved liaison officers of recruitment agencies collecting migrants’ P2,400 premiums and issuing them fake receipts provided by unscrupulous PhilHealth employees.
The fake receipts carried control numbers copied from genuine receipts issued earlier to other PhilHealth members.
Of the P2,400 paid by a migrant worker, the supplier of the fake receipts took P900; the rest went to the recruitment agency liaison officer.
Going by the “average value claim” of P10,000 for PhilHealth services estimated by Health Secretary Francisco Duque III at the time, a company employee who talked to the Inquirer for the series estimated that the migrants, besides being defrauded, were also made to spend P72.6 million in health-care costs.
The source said fake receipts were reported in the provinces of Pangasinan, La Union, Cagayan, Rizal, Pampanga and Iloilo; Cebu City, Gapan, Nueva Ecija; Tanauan, Batangas, Trece Martires, Cavite; and Valencia City, Bukidnon.
The source identified the areas where the control numbers used to make fake receipts were traced as the Philippine Overseas Employment Administration’s overseas Filipino program operations office; Baguio City, Kalinga, Cebu City, Danao City, Mandaue, Zamboanga City, General Santos City, Kidapawan; Calapan, Mindoro Oriental; Kalibo, Aklan; and the PhilHealth regional office in Northern Mindanao.
16 complaints
In his testimony on Wednesday, Sarmiento described the modus operandi that was also reported by the Inquirer, and said that as of September 2018 his fact-finding team had gathered 224 fake receipts covering migrants’ premiums worth P17.4 million. He said his team prepared 16 complaints against 48 recruitment agencies.
Sarmiento said his team had observed that premium collections from migrant workers fell from P1.7 billion in 2014 to P1.2 billion in 2015; P823.4 million in 2016; and to just P465.2 million in 2017.
He said the racket resulted in noncoverage of 204,395 migrant workers in 2015; 191,610 in 2016; and 149,000 in 2017.
“We sought assistance from all levels of our organization, no one helped us, and nothing happened to all our efforts,” Sarmiento said, adding that he and his immediate superior on the fact-finding team were “persecuted.”
No action
Sarmiento said his investigation of the racket was “derailed” after he was relieved, allegedly through action by the PhilHealth board.
He said his relief was the “collective effort” of then PhilHealth regional vice president Dennis Mas, then senior vice president John Basa, and then members of the executive committee Marissa Sugay and Gilda Salvacion-Diaz.
Since then, none of the suspected members of the “syndicate” behind the racket was arrested, much less prosecuted, and no action was taken on the 16 complaints that the fact-finding team had filed, Sarmiento said.
Contempt threat
Mas, who was at the hearing, drew the ire of lawmakers for dodging their questions.At one point, Sagip Rep. Rodante Marcoleta threatened to move to cite Mas for contempt and send him to detention if he continued to give the lawmakers the runaround.
Mas initially claimed that he learned about Sarmiento’s report belatedly, but eventually admitted that he did not immediately act on it.
