THE Philippine Health Insurance Corp. (PhilHealth) lost some P153 billion in overpayments to hospitals and to fraud in just five years because of its “all case rates” system, which is the source of graft and corruption in the agency, the chair of the House committee on public accounts said on Wednesday.
Under the all case rates system, PhilHealth pays hospitals based on fixed package rates even if the patient has incurred a lower hospitalization bill.
Rep. Michael Defensor (Anakalusugan party-list group) said reports of the Commission on Audit (COA) would show that more at least P150 billion had been lost to overpayments and more than P50 billion to fraud between 2013 and 2018.
“Believe me, you will have a problem with the all case rates program,” he told PhilHealth president and CEO Ricardo Morales during the panel’s hearing. “All of it will go to corruption for as long as there is an all case rates (system).”
Lawyer Thorrsson Montes Keith, who recently resigned as PhilHealth anti-fraud legal officer, told a Senate hearing last Tuesday that all members of PhilHealth’s executive committee composed a “mafia” which has siphoned off some P15 billion in the agency’s funds in 2019 alone.
Defensor, however, said while the all case rates system is not Morales’ “fault” because PhilHealth started implementing the system 2011 under the Aquino administration, he should put an end to it now under the Duterte
He recalled that another circular regarding the adoption of the all case rates system was released in 2013, prompting the agency to do away with its fee for service system, under which, PhilHealth only pays for the exact amount of the bill that a patient incurs from a hospital.
Quoting the 2017 COA report, Defensor said a pneumonia case is charged 15,000, noting that it has 700,000 claims every year; acute gastroenteritis, P6,600 and urinary tract infection, P7,000.
“What is fee for service? If you get sick and spend P5,000, for example, pneumonia, you only spend P5,000 but because of the case rate or case-based payment, the hospital will be paid P15,000 (by PhilHealth),” Defensor said.
COMPUTERIZED CORRUPTION
Morales said adopting a new information technology system — which some lawmakers believe is also overpriced at a cost of P2.1 billion over three years — is a solution.
Another answer can be found under the Universal Health Care System, he said, using a global budgeting system wherein funds will be advanced to healthcare provider networks and local government units.
“That will be the long-term answer to the problem of case rate, under which the amount being paid is not the same as the actual amount incurred (by a patient),” he said.
Defensor said computerization will not solve the problem because corruption will only be “computerized” in the agency for as long as the all case rates system remains.
“You won’t be able to fix PhilHealth if you won’t stop this. Don’t listen to those who are pushing for case rate, that’s wrong” he told Morales. “It cannot be a package, even if you go on a global budget, the same thing will not happen as long as we have case rate set-up.”
Defensor also warned Morales that the coronavirus disease (COVID-19) cases worth P14 billion will also be ridden with corruption because of the same system.
‘STOP DEFENDING IT’
Morales said the all case rates system was adopted to find an average cost because patients sometimes exceed the package rates but Defensor said the PhilHealth president should not be defending a flawed system and should instead file charges against the culprits behind it.
“It’s set-up by a mafia. It started in 2013 through connivance between PhilHealth officials and hospitals,” he said, adding that the billions paid for pneumonia claims make it appear that “there is a pandemic yearly.”
Agusan del Norte Rep. Lawrence Fortun asked Morales what PhilHealth is doing to recover excess payments to hospitals.
Morales said sanctions are imposed to force hospitals to follow the no-balance billing policy which is meant to ensure that patients will not pay anything.
He told Quezon City Rep. Bernadette Herrera that hospitals get to keep excess amounts paid by PhilHealth, insisting that this prompts hospitals to give quality care to patients and be efficient.
“If the hospital knows the case rate for a particular disease, it will be forced to be efficient and give its full service and medicines to a patient under that case rate,” Morales said.
But Herrera raised the possibility that hospitals will spend less on patients just so they could keep the excess payments.
PhilHealth board member Alejandro Cabading earlier accused the agency’s management, including Morales, of turning a blind eye to alleged questionable transactions flagged by “vigilant” officers of the corporation.
‘WHAT P45 BILLION?”
Marikina Rep. Stella Quimbo, an economist and a member of the Liberal Party, questioned the P45-billion projection for COVID-19 claims made by PhilHealth acting senior vice president Nerissa Santiago based on an estimated 209,000 COVID-19 cases in the country by the end of the year.
Santiago said only around P1 billion has so far been paid for COVID cases. The projection was made now that PhilHealth believes that its actuarial life is down to a year from 10 years in 2019.
“It won’t reach P45 billion. I’m worried that such huge projection might be used to create a leeway for fraud,” she told the hearing which was held in the plenary but was attended by some lawmakers and resource persons via online apps.
Quimbo, wife of former LP spokesman Miro Quimbo, noted that under global data, only 20 percent of COVID cases are hospitalized.
She said even presidential spokesman Harry Roque has said most of the COVID-19 cases in the Philippines are either mild or asymptomatic.
