"The secretary said he would do some soul-searching."
Should Health Secretary Francisco Duque go scot-free amid the major corruption scandals PhilHealth is in? In his most recent public appearance, President Rodrigo Duterte again said that he still fully trusts the Secretary and asked him to not resign despite public clamor for Duque to do so. For his part, Duque said he was hurt by accusations that he is also to blame for the mess the Philippine Health Insurance Corporation is embroiled in. He said that he would clear his name. Earlier, Duque also said that he would go soul-searching amid the mounting calls for his resignation because of his failure to effectively address the COVID-19 pandemic and the issues in PhilHealth.
Both Houses of Congress have looked into the alleged corrupt practices of PhilHealth officials and employees. Additionally, the Department of Justice (DOJ) is doing its own investigation on the matter. The Senate has already released its report and has recommended the filing of malversation and graft charges against Duque and other officials over the alleged illegal release of Interim Reimbursement Mechanism (IRM) funds. Duque called the Senate findings baseless.
The House of Representatives (HOR) has also finished its hearings and will soon release its report.
As one who closely followed the hearings on PhilHealth and studied official documents that reached me, I believe there is no question that a “mafia” of corrupt officials and employees has made the health insurance corporation their milking cow. Several modus operandi have been uncovered. Besides the IRM, there is also the misuse of the “case rate” system where health care institutions (HCIs) are paid the maximum case rate even when what was actually spent for treating a patient is way less than the maximum amount set.
Several corrupt practices were found out involving the Information and Technology (IT) Sector. Based on the Internal Audit Report of former PhilHealth official-turned-whistle-blower Thorrsson Montes Keith, there were major discrepancies and questionable budget items in the sector’s representations.
It turns out that all IT-related procurements are limited by the Department of Information and Communication Technology’s (DICT)-approved Information System Strategic Plan (ISSP). PhilHealth is not allowed to procure items and services outside of the ISSP.
However, there were items in the IT sector’s budget that were not included in the ISSP amounting to P173,859,500.00. There were items that were overpriced compared with DICT’s approved costs. The sector requested P154 million for products and services that only cost P65.468 million per DICT. Unscrupulous IT officials overpriced their request by PhP88.532 million. Moreover, there were other anomalous budget requests listed only as laptops and three unspecified projects that cost P217.713 million.
PhilHealth also procured IT items from a supplier that it has blacklisted at a time when the said supplier was still suspended. This is a clear violation of the Government Procurement Reform Act.
The Commission on Audit (COA), in its Audit Query Memorandum (AQM No. 2020-003 HO) dated January 31, 2020 also flagged two questionable procurement transactions of PhilHealth totaling P29.618 million. The COA observed that the technical specifications of the delivered items were non-compliant with what was required by the agency. This happened because PhilHealth only gave vague requirements.
COA also noted that seven units of the 20 units purchased transreceivers were missing at the time of inspection. Several other observations on negligence and inefficiency on the part of PhilHealth were also included in this AQM.
The HOR hearings also touched on the issues concerning remittances and claims of Overseas Filipino Workers. Under Article IV, Section 6 of RA 7875 as amended by RA 10606, one of PhilHealth’s functions is, “u) To establish an office, or where it is not feasible, designate a focal person in every Philippine Consular Office in all countries where there are Filipino citizens. The office or the focal person shall, among others, process, review and pay the claims of the overseas Filipino workers (OFWs).”
This provision of the law is for PhilHealth to be able to serve our OFWs in an efficient and timely manner. Clearly, PhilHealth is mandated to have the means to serve our OFWs in the country where they are located.
When asked how the agency is serving our OFWs, resource persons for PhilHealth said that they have Accredited Collecting Agents (ACAs) mostly in the country and some abroad that are authorized to receive payment of premiums of OFWs. These are then remitted to the PhilHealth office. When OFWs have claims, these are processed and paid here in the Philippines.
This scheme clearly defeats the purpose of providing assistance to OFWs at a time when they need it and in the country where they are. Because PhilHealth is notorious for being extremely late in paying claims, OFWs need to wait for a long time before they are helped.
Most importantly, PhilHealth is in violation of its mandate under the law as quoted above. This particular violation was not expounded on during the HOR hearings.
More next week.
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