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COA flags PhilHealth ACR scheme

The Commission on Audit has flagged the Philippine Health Insurance Corp. (PhilHealth) for expediting reimbursements without safeguards against improper payments.

State auditors, in a performance audit, said PhilHealth’s all case rate (ACR) payment scheme failed to put in place mechanisms to detect and prevent improper payments.

COA conducted the audit covering the scheme’s initial implementation in 2011 until June 30, 2020.

Under the ACR system designed to incentivize health-care institutions (HCIs) to be more efficient, PhilHealth pays all claims using a case rate or a fixed rate for each covered case or disease.

“If the case rate for a specific treatment is lower than the actual cost, the HCI will try to be more efficient in the costing of the treatment. On the other hand, if the case rate is higher than the actual cost, the HCI gets to keep the difference as a form of ‘efficiency gains,’” COA stated.

It said PhilHeath was “remiss” in conducting an annual or periodic review of the system to determine whether the case rates reflect actual costs.

“This was not done, and any savings from such adjustments could have been used to augment the Reserve Fund,” it added.

PhilHealth’s mechanisms to prevent and detect improper payments were “deficient and underperforming due to the deficiencies in the design and performance of controls, insufficiency of human resources, and inadequacy of strategy to mitigate the effects of the first two problems, state auditors said.

“From March 1, 2019 to June 30, 2020, a total of 878,876 claims should have undergone medical prepayment review (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,” the commission said.

Meanwhile, Sen. Christopher “Bong” Go yesterday urged PhilHealth to ensure continued access to quality healthcare while exerting all efforts to unburden Filipinos, as bills deferring the PhilHealth contribution hike passed the committee level.

The Senate Committee on Health and Demography, chaired by Go, approved on the committee level proposed measures that seek to postpone the scheduled increase on the monthly contribution rates of the state health insurer.

“When the [Universal Health Care Act] was crafted, no one knew that a pandemic would hit us. Although the increase in PhilHealth contributions ensures sufficient funding for the health care of its members, it is only reasonable and equitable to postpone incremental premiums due to the bad economic conditions caused by [the crisis],” said Go.

He said the government, as a whole, must do its best to unburden Filipinos by shouldering the cost while ensuring that the UHC law is implemented and the services of PhilHealth are unhampered,” he emphasized.

The agency’s premium contribution rate is set to climb from 3% of the monthly basic salary of a direct contributor in 2020 to 3.5% in 2021 as mandated by Republic Act No. 11223 or the UHC Act.

Mandatory contributions will be increased annually until 2025 upon reaching 5% of the monthly income.

To address the issue, the committee approved the proposed bills which grant the President of the Philippines the authority to suspend any increase in the premium contributions in times of national or public health emergencies.

Following the approval, a Committee Report will be prepared by the Health Committee so that the bills may be taken up in the plenary.

According to PhilHealth, the deferment will result in a P17.5-billion net loss and the scaling down of its Konsulta package in 2021. PhilHealth officials assured that the loss will be covered by the Reserve Funds, bringing the latter down from P160.58 billion to P143.51 billion.

To better assess the financial status of the agency, the Senator asked PhilHealth chief Dante Gierran during the hearing for an update on the agency’s efforts to recover the funds allegedly stolen through fraudulent schemes.

Gierran reported that 95% of the P14.9 billion advance payments made to hospitals and other health facilities through the interim reimbursement mechanism had already been liquidated. The state insurance agency is expected to complete the liquidation process by the end of March.

Go welcomed the developments as he also dispelled any concern about the possible dissolution of the agency later that day in an interview after distributing aid to fire victims in Pasay City.

In addition to the above bills, the committee also discussed during the same hearing SBN 1792, 1747 and 1642, measures authored by Senators Francis Tolentino, Sonny Angara, and Imee Marcos, which institute policies for the “new normal’ and provide for new programs from health care modernization, public transportation, creation of jobs to the promotion of public spaces, among others.

Topics: Commission on Audit , PhilHealth , all case rate payment , health-care institutions
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