COA flags PhilHealth’s payment schemes over susceptibility to fraud

Adrian Ayalin, ABS-CBN News

Posted at Mar 03 2021 07:14 PM

COA flags PhilHealth’s payment schemes over susceptibility to fraud 1
PhilHealth head office in Pasig City on Sept. 5, 2020. George Calvelo, ABS-CBN News

MANILA — The Commission on Audit (COA) has flagged payment schemes implemented by the corruption-tagged Philippine Health Insurance Corporation (PhilHealth), which failed to detect and prevent improper payments made to health care institutions (HCI).

In a statement, COA noted that the state health insurer's All Case Rate (ACR) payment scheme sped up the reimbursement process but lacked control mechanisms to detect and prevent fraud.

Under the ACR payment scheme, there is a predetermined fixed rate for each covered case. For example, natural childbirth has a case rate of P5,000.

If the fixed rate is lower than the actual cost, the HCI will try to be more efficient in costing the treatment, and if the case rate is higher, the HCI gets to keep the difference as form of "efficiency gains."

"However, COA found that PhilHealth was remiss in conducting the annual or even periodic review of the case as required, in order to determine whether the case rate for a particular treatment is responsive to the actual costs," the commission said.

The COA also looked into the Medical Prepayment Review (MPR) which was established in 2018 to monitor four illnesses considered vulnerable to fraud. 

From March 1, 2019 to June 30, 2020, a total of 878,876 claims should have undergone 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.

Another scheme flagged by COA is the Medical Post-Audit mechanism which was established to detect improper payments after the HCI received its reimbursements. 

Out of the 16.48 million claims required to be post-audited by PhilHealth from 2014 to June 30, 2020, only 3.20 million claims were actually post-audited. 

The audit of these 3.20 million claims led to the discovery of 380,413 medical review findings. 

Around 13.54 million claims still remain for post-audit. 

“If only to highlight the importance of the control mechanisms, from 2011 to 2020, PhilHealth paid P665.28 billion to HCIs representing reimbursement of 67.95 million claims,” the commission said. 

The commission recommended the conduct of an extensive review of case rates and include Case Type Z benefits in cases of prolonged hospitalization as well as COVID-19 packages.

“COA added that improper payments from claims may be detected through citizen participation and recommended PhilHealth to develop a mechanism to empower members by increasing their level of awareness about ACR as well as their engagement and provision of feedback,” the commission said.

The Senate Committee of the Whole last year recommended the filing of graft and malversation charges against Health Secretary Francisco Duque III, who chairs the PhilHealth board, resigned PhilHealth president Ricardo Morales, and other executives of the state firm after they allegedly authorized the release of COVID-19 funds to health facilities not catering to coronavirus patients.

But PhilHealth rejected claims late January that the alleged missing P15 billion in funds were stolen, saying it went to hospitals to address the COVID-19 pandemic.

The agency's spokesperson, Rey Baleña, said in an interview on ANC that the P13.8 billion or 92 percent of the funds had been liquidated. The agency could present to the public full liquidation of the funds by next month.

A former anti-fraud official from PhilHealth resigned in July due to alleged widespread corruption, questioning the irregular disbursement of P15 billion in funds to hospitals for COVID-19-related expenses.

Morales, meanwhile, also stepped down in 2020 after he and other officials were accused of pocketing funds, approving alleged overpriced projects, and releasing funds to supposedly favored hospitals.