The Senate Committee of the Whole (COW) recommended the filing of criminal charges against Health Secretary Francisco Duque III, resigned Philippine Health Insurance Corp. (PhilHealth) president and CEO Ricardo Morales and other officials over alleged massive corruption in the state insurance agency.
Also to be charged are Rodolfo del Rosario Jr., senior vice president for legal sector; Jovita Aragona, senior vice president for information management sector; Calixto Gabuya Jr., acting senior manager, information technology and management department; Arnel de Jesus, executive vice president and chief operating officer; Renato Limsiaco Jr., senior vice president for fund management sector; and Israel Francis Pargas, senior vice president for health finance policy sector.
Criminal charges recommended include violation of the Anti-Graft and Corrupt Practices Act, falsification by a public officer, fraud against he public treasury and similar offenses, malversation of public funds or property and illegal use of public funds or property.
Senate President Vicente Sotto III also recommended to the Department of Justice and the Ombudsman do the following:
• File an administrative case against Morales and SVP Dennis S. Mas, management service sector, for not implementing the board resolutions on courtesy resignations, which is clearly a neglect of duty and insubordination.
• File an administrative case against Morales and De Jesus for violating Commission on Audit rules on the period of liquidation in issuing Memorandum Circular 2020-032.
• File an administrative case against Del Rosario, and all the other officers and employees of the Protest and Appeal Review Department of PhilHealth for their failure to act and gross neglect of duties relative to the cases pending in their department.
The Senate committee wants to ensure that administrative and criminal cases are promptly filed against responsible individuals, health care institutions, and corporations.
"Filing charges against responsible individuals, health care institutions, and corporations will prove PhilHealth’s and the government’s commitment to ensure that government funds are not mismanaged and that corruption is not tolerated. Further, cases and subsequent convictions will serve as a deterrence for others with corrupt intentions," Sotto said in his 58-page committee report.
"Given the observation on the B. Braun Avitum Philippines, Inc., evidence for ghost patients must be sought… The report recommended that this can be done by retroactively matching the latest death data from the Philippine Statistics Authority," the report sai.
The senators suggested health care institutions that received interim reimbursement mechanism (IRM) funds be made to liquidate those funds and return the unused amount, with a definite deadline to be strictly implemented.
PhilHealth was also directed to immediately pay the claims of private hospitals, prioritizing those which are COVID-19 referral hospitals and those with high cases of COVID-19 admissions.
It also recommended an increase in the involvement of COA in every stage of operations of PhilHealth.
Sotto noted that COAhad a hard time in auditing PhilHealth due to the difficulty of obtaining documents from the PhilHealth Central Office.
"COA should be allowed to pursue its mandate to conduct the necessary audits even at the regional level without any hindrance from PhilHealth to ensure that government funds are properly managed and spent," the report said.
The senators proposed that PhilHealth’s IT services be outsourced to a reputable company.
They said PhilHealth should also contract out the processing of its benefits claim to avoid backlogs and massive reimbursement delays. This would simplify the reimbursement process, remove red tape, and address corruption.
While high ranking PhilHealth officials have quit their jobs, the Senate committee recommended they file courtesy resignations, starting from the chief executive officer to the regional vice presidents.
It also said PhilHealth should implement a regular reassignment of its regional vice presidents to a different region every three years. No regional vice president should be reassigned to the same region more than twice in his or her entire tenure in PhilHealth.
The Committee of the Whole, constituted July 28 to conduct an inquiry on alleged corruption, incompetence and inefficiency in PhilHealth, conducted three hearings.
During the hearings, it unearthed legal questions about the IRM, overpricing in its IT project, and the alleged manipulation of financial statements flagged by COA. Questions were also raised on the actuarial life of the fund, given the impact of the COVID-19 pandemic.
Senator Panfilo Lacson said removing all the regional vice presidents could be a problem as a number of them are protected by the civil service law. Doing so would also be unfair to those who are not involved in shenanigans, he said.
But Senate Majority Leader Juan Miguel Zubiri said it was necessary to remove all the regional vice presidents as part of a top-to-bottom revamp needed to end the control of the so-called PhilHealth mafia.
Zubiri said newly designated PhilHealth president Dante Gierran, a former chief of the National Bureau of Investigation, must move swiftly to stop all the fund leaks and unnecessary loss of the people's money in the state insurance agency.
Sotto said Gierran was a good choice as PhilHealth chief, since he has a clean record and the investigative skills needed to ferret out anomalies in the agency.
Senate President Pro Tempore Ralph Recto, however, said Gierran cannot be a one-man army if he wants to succeed.
“He needs to have strong backup, but they should not be the boys from Taft alone. Better to recruit alumni of NBI’s neighbor, the Philippine General Hospital. He needs to form a multidisciplinary team, without a single OJT. This is so because this management change is akin to switching surgeons in the middle of an operation,” Recto said.
He said tens of thousands of sick Filipinos rely on PhilHealth every hour of the day.
“This P150 billion a year corporation cannot afford a pause. It is not a building which can be closed for disinfection. Gierran should multitask: ramping up service while removing the rot,” Recto said.
He added that there are outstanding professionals within PhilHealth.
“He should tap them for their institutional memory. They know how to repair the institution they love. As to new senior executives who are needed for PhilHealth’s great reset, the Philippines is the world's HR office with no shortage of talent who can be recruited.”
The Senate leader said the first to assist and oversee Gierran should be the PhilHealth board, especially the five Cabinet men there. They should stop being missing-in-action in the affairs of an important health agency.
Sen Joel Villanueva said Gierran has two immediate tasks: get rid of the syndicates and send the mafia to jail; and improve the accountability and audit system at PhilHealth to ensure there are no ghost patients, overpayments and false claims.
“If we don’t fix the system, even if we weed out the syndicates now, a new mafia will just emerge in the future. We need system change and change in people. I am confident that former director Gierran is capable of doing this. Of course, we are here to support sound policy reforms to make these changes feasible.”
Senate Minority Leader Franklin Drilon said what awaits Gierram is high-level and deeply embedded corruption which has been perfected over time by corrupt syndicates in PhilHealth.
“He should keep his eyes open – never blink – to corruption. A piece of advice: transparency is an effective tool to prevent corruption. I hope his leadership will finally shine a light on PhilHealth which operates in the dark. He can enhance transparency by employing technology. He must oversee the upgrading of the system of PhilHealth to minimize, if not stop, corruption. He can contract out IT companies to carry out the digitization of PhilHealth.”
Drilon said it takes more than reshuffling of personnel.
“A top-to-bottom reorganization is what must be done. Get rid of the corrupt and the incompetent. We should put behind bars those who are part of the syndicates,” he said.”©In the House, Anakalusugan Rep. Mike Defensor said Tuesday PhilHealth will receive P71.4 billion in taxpayer subsidy next year.
“We hope that the new leadership of PhilHealth will use the funds judiciously,” Defensor, who chairs the House public accounts committee that is looking into fund irregularities in the state insurer, said.
He said aside from the annual subsidy from taxpayers, PhilHealth collects more than P100 billion a year in contributions from members.
“The subsidy is used mainly to cover non-contributory Filipinos like the poor, those without jobs and senior citizens. That is the mandate of the Universal Health Care Law,” Defensor said.
He urged the newly-appointed PhilHealth president to scrap the case or package rates and interim reimbursement mechanism of the agency.
He reiterated his view that the package rates “are the root of all evil and corruption in Philhealth.”
Albay Rep. Joey Salceda proposed structural reforms for the Philhealth to help its newly appointed head address longstanding issues of corruption and mismanagement in the state health insurance system.
Salceda identified four areas for reform in Philhealth. These areas are: reserve fund management, collections, claims and benefits, and governance.
Meanwhile, resigned PhilHealth president Ricardo Morales said investigators are looking at the problem the wrong way, and said hospitals and other professionals were involved in corruption, and not just the state health insurer.
"You know where the corruption is happening? They are looking… wrong way. It is at the hospitals, since it's the hospitals who are receiving the money," Morales said in an interview on ANC.
"Almost all cases of fraud are in the hospitals and professionals," Morales said.
Morales said the investigation should zero in on the possible collusion between hospitals and PhilHealth officials.
“But that would only be a trickle. Most of it is in the hospitals,” Morales said in a mix of English and Filipino.
Morales also said members of President Rodrigo Duterte, who are part of the PhilHealth board, “almost never” attend meetings, depriving the agency of a strategic vision.
The PhilHealth board is chaired by Duque, and members include Social Welfare Secretary Rolando Bautista, Labor Secretary Silvestre Bello III, Finance Secretary Carlos Dominguez and Budget Secretary Wendel Avisado.
"They have representatives in the board. The principals rarely, almost never attend except for the chairman who’s the secretary of Health," Morales said.
Morales earlier resigned as PhilHealth CEO and President over health issues amid corruption investigations at the state health insurer.