DOJ sees no legal problem with Red Cross test deal with PhilHealth

MANILA, Philippines — The Department of Justice (DOJ) sees no legal problem with Philippine Health Insurance Corp. (PhilHealth) entering into a COVID-19 testing deal with the Philippine Red Cross (PRC), but whether the state-run health insurer should immediately pay its P900-million debt to the private nonprofit remains to be seen.

The DOJ did not render a legal opinion on whether PhilHealth was legally obligated to immediately pay its PRC billings because it was not given facts on which to base its opinion, “particularly on the completeness of the requirements and compliance with accounting and auditing rules and procedures,” presidential spokesperson Harry Roque said on Monday, reading from the DOJ issuance.

‘No other way out’

He said the requirements must be complied with before the question of immediate payment could be resolved.

“There’s no other way out, you really have to comply with accounting rules and auditing rules and procedures,” Roque told a press briefing.

He also said PhilHealth was actually willing to pay half of the debt to the PRC now, but the nonprofit would not accept anything but the full amount owed to it. “If they accept 50 percent right now, we will pay the 50 percent, but they have to resume testing,” he said.

The PRC earlier stopped its COVID-19 testing for returning overseas Filipino workers and other returning Filipinos because of the ballooning PhilHealth debt.

The DOJ opinion supporting PhilHealth and PRC’s agreement to conduct COVID-19 testing was in contrast to the report of the health insurer’s lawyers, who described the deal as “highly irregular.”

PhilHealth legal counsel Alfredo Pineda II had said the insurer should consider rescinding the memorandum of agreement given its “apparent flaws and even irregularity or potential illegality.”

Roque, reading from the DOJ opinion, said the department saw no impediment to the PhilHealth-PRC deal to provide COVID-9 testing.

Under the universal health-care law, the DOJ said, PhilHealth has the power to contract with health-care institutions, professionals and other people for the delivery of health services.

P100-M cash advance

The DOJ also said PhilHealth’s P100-million cash advance to the PRC needed the President’s approval. But it also said the approval could still be obtained even after the payment had been given.

“Nonetheless, even if [PhilHealth] failed to get such approval prior to remitting the amount to the PRC, we are of the opinion that such may still be obtained post facto,” the DOJ said.

Surigao del Norte Rep. Robert Ace Barbers on Monday questioned the advance payment.

“There is no legal basis because PhilHealth is not authorized to issue or release advance payments because these are public funds, so definitely public funds can only be used on services and goods that have already been procured, delivered, or services that have already been rendered,” Barbers told reporters.

Asked about the opinion of the PhilHealth lawyers on the alleged irregularity of the deal with the PRC, Roque said the state health insurance company must follow the DOJ opinion.

“PhilHealth, as a member of the executive branch of government, should legally heed the opinion of the DOJ, subject to the caveat that only the courts can say with definiteness whether or not there will be criminal responsibility because that is a judicial function already,” he said.

He also said PhilHealth board members could be accorded the defense of good faith because they waited for the DOJ legal opinion, and it said there was no legal infirmity when the memorandum of agreement was executed.

No DOH participation

Health Secretary Francisco Duque III told the Inquirer on Monday that the memorandum of agreement was entered into “without the participation of the Department of Health.”

“The Department of Justice opinion has addressed the legal issues raised by board member Al Cabading and Mr. Alfredo Pineda,” Duque said.

“The DOJ opinion, as read out by [presidential] spokesperson Harry Roque, states there are no more legal infirmities in the [memorandum of agreement],” he added.

The PRC’s decision to stop its COVID-19 testing has left thousands of returning Filipinos stranded in hotel quarantines.

Sen. Richard Gordon, the PRC chair, said PhilHealth failed to pay its P1.1-billion debt on Monday despite the health insurer’s promises to pay.

In a text message to reporters, Gordon did not mention the memorandum of agreement, but implied that PhilHealth’s examination of the contract was an attempt to avoid settling its obligations to the PRC.

“We sadly note that PhilHealth keeps giving excuses on such a serious and critical matter,” Gordon said.

“First, they say they want to be sure the contract is OK. They needed DBM (Department of Budget and Management). The President told them to pay. Then it was referred to DOJ, who told them the contract is valid and they must pay,” he said.

‘Should be ashamed’

PhilHealth, he said, “has been perfidious, reckless, and they have been in violation of the contract many times.”

“[The] PRC covered the first humongous wave of people to be tested. PhilHealth should be ashamed of themselves for betraying our vulnerable people,” Gordon said.

Iloilo Rep. Janette Garin, a former health secretary, said on Monday that the government should look for other laboratories to do the COVID-19 testing of returning Filipinos.

“[T]here are many laboratories who are willing to help, both government and private,” Garin told the Inquirer in a phone interview.

Roque said the government was coordinating with eight private laboratories to process the specimens collected from the returning Filipinos to ensure that the results of their COVID-19 tests would be released promptly.

—With reports from Jovic Yee, DJ Yap and Nestor Corrales