Duterte to penalize Philhealth officials over fraud overpayments

Philippine President Rodrigo Duterte on Friday, June 7, ordered the authorities of the Philippine Health Insurance Corporation (PhilHealth) to hold officials accountable for allowing fraudulent payments that led to a P154-billion loss. 

“The president directs the management of the PhilHealth to institute criminal actions against those officials and employees who wittingly or unwittingly allowed such misuse of funds to take place for years,” Presidential spokesperson Salvador Panelo told reporters on Friday. 

Unnamed officials reportedly disclosed that the prevailing all-case rates (ACR) payment mechanism was one of the ways the health insurance company had lost a total of P154 billion since 2013. 

Of the “losses” over the past six years, P102.5 billion was due to overpayment. Another P51.2 billion was lost to fraud based on the global estimate of a 10-percent loss as a result of health care insurance scams. 

“All persons involved in the alleged fraud will be prosecuted and face accountability. They shall reap the harshest penalty imposed by law,” Panelo added.

Government officials expressed doubt over how PhilHealth could be trusted to efficiently manage the universal health care (UHC) program’s initial fund of around P257 billion. The UHC law mandates PhilHealth in charge of a larger amount of money for medical care.

“We will put a stop to this corruption and we will make sure that the law on Universal Health Care is strictly enforced,” said Panelo.

PhilHealth’s benefit payout totaled P568 billion between 2013 and 2018. PhilHealth has been paying hospitals a set rate for a particular disease since it abandoned a fee-for-service scheme.

For example, patients diagnosed with community-acquired pneumonia are covered for P15,000 each, while those who contracted the more severe strain are allotted P32,000. Since 2010, pneumonia has consistently ranked as the most prevalent disease reported by hospitals.

Those with acute gastroenteritis, the second leading case reported by hospitals and processed by PhilHealth, are covered for P6,000 each.

While some countries also follow the ACR scheme, PhilHealth insiders pointed out that the lack of review of the scheme and instances of “upcasing” resulted in the insurance company shelling out billions of pesos in overpayments.

Upcasing occurs when hospitals submit claims for pneumonia even if patients may have had only cough or cold.

They lamented that over the years, the PhilHealth management seemed to have turned a blind eye to the situation even as a number of hospitals have taken advantage of it. The hospital schemes range from upgrading ailments of patients and admitting beyond their bed capacity to treating dead patients. 

Edwin Roberto, a former employee of WellMed Dialysis & Laboratory Center Corporation, earlier revealed that PhilHealth approved and released payments for dialysis treatments of “ghost patients” or dead patients.

Roberto alleged that the collection of payments was not only for dead patients, but also for patients who had yet to complete their treatments. He added that claims were made from dialysis packages even though other treatments were performed.

PhilHealth Acting President Roy Ferrer had said they already filed charges against the treatment center. Duterte also instructed Ferrer to submit a “detailed report” on the irregularities.

Opposition Senator Risa Hontiveros had earlier called for a probe into the PhilHealth payments, saying the alleged scam robbed real patients who would have benefited from the treatments.