BETWEEN 2011 to 2020, the Philippine Health Insurance Corporation (PhilHealth) paid out 67.95 million claims for reimbursement of healthcare institutions (HCIs) worth P665.28 billion under the “All Case Rate (ACR) payment scheme.
A performance audit, however, revealed that while the ACR improved the efficiency in processing reimbursements for hospitals and other health institutions from almost two months to just 19 days, the system has weaknesses that are vulnerable to improper payments due to errors or even fraudulent claims.
The Commission on Audit said the ACR was adapted to replace the fee-for-service payment system that created delays and bloated charges.
Under the fee-for-service scheme, hospitals and clinics seek reimbursement based on actual charges for a patient’s treatment. However, since different hospitals charged different rates, validating the claims took a long time, thereby adversely affecting hospital operations.
With the implementation of the ACR payment scheme, the PhilHealth assigned a fixed rate for covered cases to make uniform payments to HCIs.
The idea behind a uniform costing is that healthcare providers are supposed to become more efficient to lower the cost where the treatment is higher than the assigned rate even as they get to keep the difference as “efficiency cost” where the actual treatment cost is lower than the PhilHealth’s rate.
Control mechanisms were put in place to prevent improper claims for payment.
But the idea proved good only on the drawing board but deficient in real operations.
For instance, PhilHealth established the Medical Prepayment Review (MPR) in 2019 to monitor four illnesses considered vulnerable to fraud. The sheer number of the claims, however, proved insurmountable as PhilHealth simply paid without conducting the review.
“From March 1, 2019 to June 30, 2020, a total of 878,876 claims should have undergone MPR but only 252,408 claims were reviewed. Of the remaining 626,648 claims, 443,162 claims were paid by PhilHealth despite not undergoing MPR,” auditors said.
Another example is the Medical Post-Audit (MPA) mechanism which was established to detect improper payments after the HCI received its reimbursements.
“Out of the 16.48 million claims required to be post-audited by PhilHealth from 2014 to June 30, 2020, only 3.20 million claims were actually post-audited. The audit of these 3.20 million claims led to the discovery of 380,413 medical review findings,” the COA said.
The remaining 13.54 million claims are still awaiting MPA scrutiny.
The biggest problem is lack of people to do a thorough job and inadequate strategy to process the volume of HCIs’ reimbursement claims.
The COA recommended that the PhilHealth tap citizen participation by empowering members as partners by increasing their level of awareness about the ACR process.
The COA also said engagement of more manpower and improving provisions for feedback should be considered.