The head of the House committee looking into the fund irregularities in Philippine Health Insurance Corp. on Monday called for the scrapping of the insurer’s “case rates” and its interim reimbursement mechanism or IRM for hospitals.
“The case or package rate system is the root of all evil and corruption in PhilHealth. IRM is its offspring,” said committee on public accounts chairman Mike Defensor.
Senate Minority Leader Franklin Drilon said denying the National Bureau of Investigation entry and the Commission on Audit access to PhilHealth documents was a criminal offense.
"That is obstruction of justice punishable by imprisonment of four to six years under PD 1829," Drilon said.
Senator Christopher Go has sought the help of the NBI to help protect PhilHealth documents and preserve the integrity of the investigation of the insurer.
PhilHealth, meanwhile, on Monday assured the public there was no truth to the allegations of a coverup on the leak incident in its Region 1 Office 1 in Dagupan City due to a heavy downpour on Aug. 19.
The day before, PhilHealth said it was open to any investigation over the leak incident in its Region 1 office.
“The PNP, BFP Dagupan, CIDG and NBI have initially looked into the incident. There were no documents destroyed and everything are accounted for,” PhilHealth said in a statement.
Defensor says under the case rate system, Philhealth pays for the entire treatment package cost that it has fixed, even if such cost is much lower than the expenses a patient-member incurs.
“For instance, they have four case rates for new coronavirus disease or COVID-related ailments. For mild pneumonia, the package costs almost P44,000,” Defensor said.
“A health facility can declare its treatment for colds, cough and fever as COVID-connected mild pneumonia and get paid for P44,000 even if the actual cost is only P15,000 or P20,000.”
Defensor says Philhealth officials have admitted that even “probable and suspected COVID cases” could qualify for the COVID packages.
“This opens the floodgates for a free-for-all bonanza of fraud and corruption. Even now, there are more COVID reimbursement claims in the Ilocos, Southern Luzon and Western Visayas than the actual cases recorded by the Department of Health,” Defensor said.
He proposed that, instead of package rates, Philhealth should pay for the actual cost of a member’s hospitalization, treatment and medicines.
“They can consider the case rates as cost limits to conserve their funds,” Defensor said.
He expressed apprehension that a large portion of the P30 billion advanced by PhilHealth to hospitals and other health facilities under its IRM could just go down the drain through the “fraud and manipulation-prone package cost system.”
“Such system clearly breeds corruption because of collusion among hospitals, patients and corrupt PhilHealth officials and personnel.”
Defensor says Philhealth President Ricardo Morales himself has admitted such collusion in one of his committee’s hearings.
“This has been going on since 2013. The Commission on Audit has been raising red flags about possible financial losses in the billions in its annual reports. And yet Philhealth officials see no evil, hear no evil, speak no evil. We wonder why. They are even defending their case rates,” he said.
The commission estimates that PhilHealth has been “overpaying” health facilities by at least 20 percent through package rates. It calculated such overpayments at P154 billion over a six-year period: 2013 to 2018.