Antifraud exec’s resignation sparks new PhilHealth probe

President Rodrigo Duterte has ordered the Palace to investigate alleged irregularities in Philippine Health Insurance Corp. (PhilHealth), including its procurement of a P2-billion information technology (IT) system that reportedly caused a rift between some of its officials and its president and chief executive officer Ricardo Morales.

Senators and members of the House of Representatives on Friday also announced plans to probe the latest corruption allegations to rock the state health insurer whose top officials were forced by the President to resign over the “ghost” dialysis scam that was exposed by the Inquirer in a series of reports in June 2019.

The Palace and congressional investigations were triggered by the resignation on Thursday of Thorrsson Montes Keith, an antifraud legal officer for PhilHealth, who cited “widespread corruption” in the agency, which he did not detail.

The probes also followed the heated exchanges during the PhilHealth board meeting on Wednesday that tackled, among others, the IT project.

Presidential spokesperson Harry Roque told the Inquirer on Thursday that the President authorized Undersecretary Jesus Melchor Quitain, head of the Office of the Special Assistant to the President, to lead the Palace investigation.

He urged Keith and the other parties to cooperate “so we can get to the truth.”

Ricardo Morales

‘Vengeful’ contractual

In his resignation letter on Thursday, Keith said he would be stepping down on Aug. 31. But Morales on Friday dismissed his allegations as mere grumblings of a “vengeful” contractual employee.

He said that Keith did not need to wait until Aug. 31 to step down and expected him out of PhilHealth as early as Friday. The lawyer’s continued stay was not only “detrimental” but would “compromise the interest of the corporation,” Morales said.

“[He] was refused a position for which he was not qualified. Bad loser, vengeful. Good riddance,” Morales said in a text message.

In his resignation letter, which was widely circulated on Thursday night, Keith also alleged that there was “rampant and patent unfairness” in PhilHealth’s promotion process, that his pay was delayed after he began investigating PhilHealth officials and that he opposed making overseas Filipino workers pay PhilHealth contributions.

“On my first day in PhilHealth I was really very thankful and proud that I would be helping the Filipinos and our country to which I believe I did my best. So I am proud of myself. Now, I think it is better for me to resign and let the course of things go its way,” Keith said in his letter to Morales.

In a statement, PhilHealth assured the public it “takes seriously” any corruption issue and asked Keith to “substantiate his accusations.”

Roque, who helped expose last year’s dialysis scam, said Keith’s allegations were a “serious matter.”

“In this time of the (COVID-19) pandemic, the President will not tolerate corruption in an agency trusted by all to provide medical assistance to Filipinos,” Roque said.

Board meeting

Keith’s resignation came a day after Morales met with his four board members—Alejandro Cabading, Dr. Maria Graciela Garayblas-Gonzaga, retired Brig. Gen. Marlene Padua and Dr. Susan Mercado as well as four Cabinet secretaries sitting as ex-officio board members—Health Secretary Francisco Duque III, the board chair, Finance Secretary Carlos Dominguez III, Labor Secretary Silvestre Bello III and Budget Secretary Wendel Avisado.

Also present were Quitain and Harry Roque. A source privy to the meeting said Sen. Bong Go organized the meeting because some of the board members were complaining about the IT system.

Go told the Inquirer in a text message that he witnessed the heated exchange between Morales and Cabading and the other PhilHealth officials.

Asked to describe how the meeting went, he replied: “It was OK. Quitain said they should be civil.”

He said the discussions “came to a point that [some PhilHealth officials] dared others to resign.”

“Fortunately it was a Zoom meeting. It could have been different if it happened during a physical meeting,” Go said.

Argument

Morales acknowledged the argument between him and Cabading, an accountant, on the rollout of the IT system.

“Cabading [is] ignorant, just like me, about [the] IT system, especially information system development. [He] wants to be an expert deciding. [He] loses his temper if he doesn’t understand,” Morales said.

The PhilHealth chief stressed that the IT system project was actually “underfunded not over.”

Roque said he was invited to join the meeting but he refused to disclose details, except the two concerns that he had raised.

One was about an internal audit report submitted to the PhilHealth board last May, which cited major discrepancies that included more than P734 million that was not approved by the Department of Information and Communications Technology (DICT).

Senate inquiry

The other, he said, was about PhilHealth’s immediate payments to hospitals in areas with low COVID-19 cases.

He said he suggested that these funds should be “rechanneled” to hospitals in Cebu City where there was a high number of cases.

Sen. Panfilo Lacson said he and Senate President Vicente Sotto III had agreed to file a resolution to conduct an inquiry into the alleged irregularities in PhilHealth.

“There must be a full-blown Senate investigation. [Since] allegations and denials abound, diligence is necessary,” Sotto told the Inquirer in a Viber message. “Where there is smoke, there is fire.”

Go shared the disappointment of his colleagues, pointing out that the Senate had conducted several inquiries into the various PhilHealth irregularities, which apparently failed to stop errant officials.

“Enough is enough … Once and for all, shape up or ship out!” he said.

Lacson said the verbal tussle during the PhilHealth board meeting involved “questionable transactions.”

“That such corruption occurred amid the COVID-19 crisis makes it more disgusting and abominable. It’s really revolting,” Lacson said.

Lacson, who had exposed various fraudulent contracts entered into by the state health insurer, said he and his colleagues had hoped that drastic changes would be implemented in PhilHealth after Mr. Duterte sacked its officials implicated in the “ghost” dialysis scam.

“Sad to say how wrong we were,” he said.

Senate Minority Leader Franklin Drilon said the latest corruption allegations had “reached a level akin to a state of emergency.”

“Our health sector is crumbling and these controversies made things even worse. This is too much,” he lamented.

Senators Francis Pangilinan, Joel Villanueva, Sonny Angara, Aquilino “Koko” Pimentel III and Risa Hontiveros also backed a Senate committee of the whole hearing on the PhilHealth’s IT project and finances.

Angara urged the Commission on Audit to conduct a special audit of PhilHealth’s funds.

“As it is, funds are hardly sufficient and corruption would make this worse and is really criminal,” Angara said.

Villanueva said the pilferage of PhilHealth funds was “an unconscionable betrayal of the public trust.”

No other resignations

His father, Cibac party list Rep. Eduardo Villanueva, a House deputy speaker, also expressed outrage and said his party would also call for a separate investigation.

“It is very disgusting that unabated corruption in PhilHealth is continuously plundering not only government funds but also its members’ contribution during this state of health emergency,” the elder Villanueva said.

As Keith’s resignation letter circulated late on Thursday so did reports that two other PhilHealth officers had resigned also over alleged corruption.

PhilHealth on Friday denied the reports, saying one of the officers, Morales’ head executive assistant Etrobal Laborte, did resign but only to resume his graduate studies. The other officer, corporate legal counsel Roberto Labe Jr., never left PhilHealth, it said.

According to Morales, Keith wanted to take over Laborte’s post, but he said the lawyer was “unqualified.”

Morales said Keith lacked the necessary “experience, training and attitude” for job, which also required the PhilHealth chief’s confidence in him. —WITH A REPORT FROM MELVIN GASCON