How to cure Philhealth’s woes?

Maggie De Pano Fellow
A Newsbreak Special Report
(Second of Two Parts)

GENERAL SANTOS CITY, Philippines—The General Santos District Hospital (GSDH) here was not the only hospital that was investigated by Philhealth for fraudulent claims.

Tertiary hospitals such as the AFP Medical Center, St. Luke’s Hospital, Philippine Orthopedic Hospital, University of Sto. Tomas Hospital, East Avenue Medical Center, Cardinal Santos medical Center, Medical City, and National Kidney and Transplant Institute have been investigated at one point or another for alleged Philhealth fraud.

Dr. Ishrael Francis Pargas, Philhealth head of the benefits development and research department, says that fraud is more prevalent among primary and secondary hospitals—those that are located in remote towns and are far from the reach of monitoring teams of the agency.

About five years ago, Philhealth revoked the accreditation of Sara Medical Clinic in Midsayap for “claims for non-admitted patients.”  The clinic is now closed.

Amid all these reports, few have been prosecuted and punished.

Congress might as well also look into the financial health of Philhealth as most of its available and accumulated funds are now invested in treasury bills, investments bonds and other financial instruments which, as of 2009, amounted to a staggering P75.9 billion from which it is earning around P P6.1 billion annually.

In 2004, Philhealth claimed it has already covered 81 percent of the Philippine population then. Philhealth says it will achieve its goal of universal health coverage by covering 85 percent of the country’s 97 million total population.

But former Health Secretary Dr Alberto G. Romualdez Jr. disagrees and estimates that only 54 percent of the Filipino population is covered by Philhealth.

While the Philippines is ranked 60th among 191 countries in overall health system performance, it is in the bottom half in the world in health expenditures at 124th.

The Philippines trails several Southeast Asian neighbors in health performance with Singapore (6th) among the top 10 in the world.  It is followed by Brunei (40th), Thailand (47), and Malaysia (49th).

Philhealth officials in Region 12 said their conviction rate in administrative complaints has been minimal compared to the volume of cases that they have investigated. Not a single criminal case has been filed against any health care provider in the region or any of the doctors involved in fraudulent claims.

Connections with the powerful, lack of witnesses, safety concerns, and conniving Philhealth officers—all these contribute to the continued plundering of Philhealth.

We previously reported how hospitals and doctors connived with each other to defraud the state health insurer. The GSDH was found to have violated several sections of the Implementing Rules and Regulations of RA 7875, among them charging Philhealth for room and board for patients operated by a supposed hospital doctor when in fact they were never confined in the hospital.

Villegas was probed for the unusual number of surgical operations while Atendido was investigated for claims padding. At one point, Villegas supposedly performed a total of 236 eye surgeries from Nov. 2005 to Jan. 2007.

In August 2008, GSDHI was suspended for a total of six months and a fine totaling P20,000. The hospital sought reconsideration but the Philhealth board denied it.

But the two doctors were cleared of any wrongdoing.

What went behind the scenes?


In an interview, Ramon Aristoza, Philhealth vice president for Central Mindanao, admits being pressured by local chief executives about cases against health care providers. In the GSDHI case, Aristoza says, a city mayor, a governor, and a congressman had warned him to go slow on the case.

The lawyer then of GSDHI was Loreto Acharon, younger brother of South Cotabato First District Representative Pedro Acharon. Sought for comment, Acharon denied lobbying on behalf of GSDHI.

South Cotabato Governor Arthur Pinggoy, for his part, confirms that he spoke with Aristoza to raise his concerns that Philhealth’s suspension of GSDHI’s could affect the delivery of services to his constituents who are Philhealth members.

But a Newsbreak source says Pinggoy is a relative of Dr. Mario Dideles, a member of the board of directors of GSDHI. Dideles’s uncle, Dr. Venancio Yap, controls four seats in the 11-person hospital board.

Philhealth has filed a second administrative case against GSDHI and Villegas. The case is still pending before the adjudication unit of Philhealth. Villegas refused to be interviewed for this special report.

It has not provided us statistics on the number of fraudulent cases it has investigated or has been investigating in the national and regional levels.

A belated two-page report on fraudulent claims signed by Philhealth president and CEO Dr. Rey Aquino and e-mailed to Newsbreak four months after the request was made, disclosed that of the 481 cases of violation of the Implementing Rules and Regulation of the National Health Insurance Act of 1995 in 2010, only one resulted in the filing of a criminal case.  Ironically, it is against a member and none against any doctor or hospital/health care provider.

This means a little over two per cent case solution efficiency for Philhealth and a more pathetic conviction rate.

Last year, a total of 131 cases were decided but these include those docketed since 2008.  Philhealth did not provide data on the number of total docketed cases for 2008 and 2009.

Philhealth Region 12 legal office head Jusen Lubaton says that due to lack of personnel, his office practically has no database on the hundreds of cases they have investigated.

He explains that the regional legal office has no prosecutorial powers and that cases they recommended for filing are taken over by the central legal office. “Besides, there are only five of us in the office covering the region,” he adds.

Lubaton provided us with copies of some cases involving some hospitals in the region but not after explaining that the management committee of Philhealth Region 12 warned him to be cautious on releasing documents.

And while Philhealth already acknowledged incidents of fraud in the wake of a 2007 congressional probe, the Commission on Audit (COA) failed to cite these cases in its 2008 audit report on the insurance company.

With Philhealth’s poor track record in prosecuting perpetrators, it is no surprise that health insurance scams continue.

DSWD’s role

Last October, a local unit of broadcast TV station ABS-CBN reported that several hospitals in South Cotabato were still using ghost patients to claim insurance benefits from Philhealth. A nurse in one of the clinics in General Santos City told ABS-CBN correspondent Jay Dayupay that a hospital had recruited “ghost patients” and enrolled them with Philhealth to avail of benefit payments.

The nurse, whose identity was withheld for security reasons, claimed the ghost patients were made to sign claim forms and that doctors and nurses filled up the medical folders to support the claim with the connivance of some Philhealth “insiders.”

Hospitals’ role

General Santos City Philhealth head Nol Salvila said they also received reports about hospital using ghost patients.

The nurse has since left the hospital and is now working abroad.

To address the problem, Philhealth has stepped up its monitoring as well as investigating efforts.

It is already the Department of Social Welfare and Development—not the local government units as previously practiced—that is tasked to identify indigent constituents who are qualified for sponsored programs.

Philhealth monitoring teams composed of lawyers and doctors are now deployed on weekends to do random inspections. In 2009, Philhealth launched Philhealth Operation Lighthouse and hired paralegal and paramedical evaluators to help in the anti-fraud campaign.  Each region was assigned five to six evaluators.

Philhealth also recently announced that starting July 2011, only members who have paid an equivalent of nine months of premium contributions within the year of their confinement would be allowed to file claims.

It likewise issued new tariff rates and ceilings on different schedules of confinement costs, professional fees as well as standard prices of medicines and allowable prescription. In-house doctors hired by Philhealth evaluate these to detect and prevent padding, disallowed claims and unnecessary prescriptions.

In 2009, apparently stung by the massive payments it made for cataract operations, Philhealth issued an advisory that re-scheduled professional fees for ophthalmologists claiming payments for eye surgeries.

Dr. Alvin Alejandro, chief of hospitals at the city-run General Santos City Hospital, says Philhealth should consider rationalizing the tariff and schedules on professional fee claims.  He says ophthalmologists and orthopedics are claiming bigger relative value units (RVUs) for multiple surgical sections in a single operation than regular surgeons.

Alejandro adds that expediting the release of benefit payments should bring down the cost of medicines and other fees charged by hospitals to Philhealth patients.  He admits that private hospitals are charging medicines and other fees well above the standard rates for Philhealth-member patients.

Private hospitals could not be faulted for wanting to recover “cost of money” because of the 45 to 60-day window period before they could receive their benefit claims, he says, But Aristoza defends the policy, saying this was meant precisely to ensure that claims are properly evaluated in case of padding or overpricing.

Lubaton, on the other hand, says Philhealth should consider decentralizing the prosecutorial powers of its legal departments and batted for a special law on medical insurance fraud.

“It would be to our advantage if a special law is passed.  Then, we will have courts that will focus on medical insurance fraud,” he said.

He said their poor conviction rate could be attributed to the centralization of the prosecutorial powers of the legal department.

At the House of Representatives, the committee on health has scheduled plenary debates on three proposed measures that seek to give Philhealth more teeth, such as granting it visitorial powers and increasing the fine against erring health providers to P100,000.

It remains to be seen if all these will cure the ills of Philhealth.—Newsbreak

(This series was produced under the Maggie de Pano Fund for Investigative Reporting on Health. The Fund, which is managed by Newsbreak, is made possible through a grant from Macare Medicals, Inc)