Senate recommends filing of malversation, graft charges vs Duque, PhilHealth officials

Katrina Domingo, ABS-CBN News

Posted at Sep 01 2020 05:04 PM | Updated as of Sep 01 2020 09:02 PM

People crowd outside a Philhealth branch in Quezon City on the last day of the General Community Quarantine (GCQ) before Metro Manila reverted to Modified Enhanced Community Quarantine (MECQ) on August 3, 2020. Fernando Sepe, Jr., ABS-CBN News

MANILA (UPDATE) - The Senate Committee of the Whole on Tuesday recommended the filing of criminal charges against Health Secretary Francisco Duque III and several former and incumbent officials of the Philippine Health Insurance Corp (PhilHealth) over alleged anomalies at the state health insurer.

Duque, resigned PhilHealth president Ricardo Morales, and other executive officers of the insurance agency should be charged with malversation and graft for the "improper and illegal implementation" of the interim reimbursement mechanism (IRM).

"We are in the middle of a pandemic and we should not change horses mid-stream... However, it may be a worse course of action for this august chamber to sit idly by knowing how mismanaged PhilHealth is," Senate President Vicente Sotto III said in his sponsorship speech in plenary.

"PhilHealth is hemorrhaging because of [the] inefficient running of the corporation, compounded by the corrupt practices inside," he said.

Among the officials who were cited for liability in the Senate Committee of the Whole report are:

FRANCISCO DUQUE III
Department of Health Secretary and PhilHealth Board chair

  • allegedly liable for the "improper and illegal implementation" of the IRM
  • allegedly liable for "malversation of public funds" and allegedly violated the Anti-Graft and Corrupt Practices Act

RICARDO MORALES
Resigned PhilHealth President and Chief Executive Officer

  • allegedly liable for the "improper and illegal implementation" of the IRM
  • allegedly liable for "malversation of public funds" and allegedly violated the Anti-Graft and Corrupt Practices Act

ATTY. RODOLFO DEL ROSARIO JR.
Resigned PhilHealth Vice President for Legal Sector

  • cited for "negligence and tolerance" of anomalies in PhilHealth over his "failure to act upon the prosecution of cases before them"
  • allegedly violated Anti-Graft and Corrupt Practices Act

JOVITA ARAGONA
Senior Vice President for Information Management Sector

  • cited for alleged overpricing of IT supply and the "concealment/alteration of documents pertaining thereto"
  • allegedly committed "fraud against the public treasury" and allegedly violated "the Government Procurement Reform Act

CALIXTO GABUYA JR.
Acting Senior Manager, Information Technology and Management Department

  • cited for alleged overpricing of IT supply and the "concealment/alteration of documents pertaining thereto"
  • allegedly committed "fraud against the public treasury" and allegedly violated "the Government Procurement Reform Act

RENATO LIMSIACO JR.
Senior Vice President for Fund Management Sector

  • allegedly liable for the "improper and illegal implementation" of the IRM
  • allegedly liable for "malversation of public funds" and allegedly violated the Anti-Graft and Corrupt Practices Act

ISRAEL FRANCIS PARGAS
Senior Vice President for Health Finance Policy Sector

  • allegedly liable for the "improper and illegal implementation" of the IRM
  • allegedly liable for "malversation of public funds" and allegedly violated the Anti-Graft and Corrupt Practices Act

The committee also recommended the filing of administrative charges against resigned and incumbent PhilHealth officials who failed to immediately address the anomalies repeatedly flagged by former employees of the agency.

"Any reform in personnel and its organization cannot come from within its ranks when all had been tainted with suspicion - through active participation or inaction - in the conspiracy to bankrupt PhilHealth of its funds and resources," Sotto said.

"The endemic corruption and gross mismanagement of PhilHealth, if not corrected or eradicated, will pose grave risks not only to health, but also to the lives of all Filipinos," he added.

"We must thus exert our utmost authority and vigilance to rid PhilHealth of undesirables and punish to the fullest extent of the law criminals.”

INTERIM REIMBURSEMENT MECHANISM

PhilHealth earlier said that COVID-19-related expenses would only amount to P3.3 billion, but it placed a P26.8-billion budget for the global pandemic, Sotto said.

As of June 9, 2020, PhilHealth has released P14 billion in COVID-19 funds to 632 health care institutions, according to findings of the committee.

Of the said amount, P231.15 million were given to dialysis centers and maternity clinics, which were not catering to COVID-19 patients, the chamber's report showed.

"This bolsters the argument that the 90-day historical claims of hospitals as metrics was not really based on facts, but on surmises plucked from ether," the Senate President said.

The committee also noted that "there was no set of criteria" to determine which health facilities are entitled to receive the IRM that is only intended for hospitals and clinics affected by unforeseen calamities.

"Lack of such qualifiers would mean that the funds were either indiscriminately distributed or that the agency was being generous to the point of being ludicrous," Sotto said.

"The Committee is not adverse to helping these other health care institutions, but they should have been covered by the regular benefit packages of PhilHealth and not through this IRM," he said.

PhilHealth officials from its headquarters in Metro Manila also failed to quickly respond to requests for assistance in several provinces, the committee's findings showed.

For example, PhilHealth-Eastern Visayas sought aid from the insurance firm's main branch as early as March 20, but the central office only approved the request for 10 government hospitals in the region a month later. It "has not acted upon it since then."

"These government hospitals have yet to receive any IRM releases as of date," Sotto said.

PhilHealth also has yet to settle some P19.38-million worth of claims from the Ospital ng Maynila, one of the government hospitals tending to numerous COVID-19 cases in the capital city, he said.

The committee also flagged how Morales "ordered the deferment" of the IRM's liquidation.

"It would appear that PhilHealth still has no guidelines for a reconciliation program or a workable mechanism to recover the millions advanced to health care institutions," Sotto said.

B. BRAUN AVITUM DIALYSIS CENTER

While various hospitals grappled for funds and supplies at the height of the Luzon-wide lockdown, facilities not catering to COVID-19 cases easily received cash aid from PhilHealth, Sotto said.

B. Braun Avitum Dialysis Center, which has 25 branches in Luzon, got a total of P45.17 million from PhilHealth's COVID-19 funds between April 23 and May 5, 2020, the committee's report showed.

In a week, PhilHealth disbursed P15.4 million and P4.2 million to two B. Braun Avitum Dialysis Center branches in Tondo, Manila, while two other branches in Quezon City got P14.25 million from the state-run insurance firm, the Senate President said.

"In short, B. Braun enjoys a fast and express lane in the release of PhilHealth payments or funds kahit na 'yung ibang branch ay walang dialysis machine pero may recorded dialysis sessions," he said.

B. Braun Avitum had earlier denied allegations that it was the new "conduit" of anomalies in the state-run insurance agency.

INFORMATION TECHNOLOGY ISSUES

The committee detailed in its report how the PhilHealth's proposed modernization program was used to steal taxpayers' money.

PhilHealth initially proposed to spend P2.1 billion to modernize its computer systems to immediately flag irregularities and bogus claims, but the board denied the request due to lack of specifications.

The proposal was reduced to P328 million after the PhilHealth's Information Technology office said it committed several "typographical errors" in its initial pitch.

 

Some PhilHealth officials did not only overprice laptops, network switches, and other tech equipment, but also tried to procure "nearly obsolete" items, the Senate investigation noted.

IRREGULARITIES IN PHILHEALTH'S LEGAL SECTOR

The Senate blamed the PhilHealth's legal sector for the slow resolution of cases, saying "prolonged inaction" on reported irregularities may have empowered corrupt officials to continuously steal from the insurance firm's fund.

Between 2009 and 2019, PhilHealth only acted upon 71.48 percent of cases against health care institutions, Sotto said.

In the same period, only 45.97 percent of cases against health care professionals have been resolved, he said.

"While SVP for Legal Sector Rodolfo Del Rosario projects that he is against fraud, it seems that the records prove otherwise, considering that a lot of cases are still pending in or unacted upon by the agency," said Sotto.

Sotto also accused Del Rosario's department of "diluting cases against erring PhilHealth employees."

Two PhilHealth-Cagayan officials who illegally disbursed P9.7 million to a bank account in Central Luzon - which is out of their jurisdiction - was only charged with "simple neglect of duty," Sotto said.

Some PhilHealth employees who were tagged in "fraudulent claims amounting to P1.17 million" were charged "just for simple misconduct," he said.

"Eh kaya naman pala nawiwili na gumawa ng katarantaduhan ang ilang mga empleyado ng PhilHealth dahil hinayaan lang," Sotto said.

(PhilHealth officials have been used to enacting anomalous deeds because the executives allow them to go unpunished.)

OTHER RECOMMENDATIONS

Aside from the filing of criminal and administrative charges against high-ranking PhilHealth officials, the Senate also urged the executive department to regularly re-shuffle regional vice presidents to minimize familiarity among executives, which may lead to connivance.

"No regional vice president should be reassigned to the same region more than twice in his or her entire tenure in PhilHealth," according to the report.

The head of the Legal Sector should also have "at least 5 years of legal practice or have held a public office requiring admission to the practice of law," it said.

The Senate pushed for the outsourcing of PhilHealth's IT services and the processing of benefit claims to avoid backlogs and other massive reimbursement delays."

"This would simplify the reimbursement process, remove red tape and address corruption," Sotto said.

The committee urged the Office of the Ombudsman, the Anti-Money Laundering Council, and other executive branch agencies to "immediately investigate" reported anomalies in the state's health insurer.

Twenty-two senators signed the committee report.

Sen. Leila de Lima was unable to sign the document as she remains in detention over drug charges, while Sen. Aquilino "Koko" Pimentel III said he was unable to affix his signature because he does "not know how to attach [his] signature digitally."

While the Senate provided a detailed report on the alleged anomalies in PhilHealth, the chamber remains to be an oversight body which does not have the power to file cases against the agency’s officials before any court.

The executive branch has yet to issue a statement on whether or not it would heed the call of the Senate to file criminal and administrative charges against Duque, Morales, and other PhilHealth officials.

Several senators earlier called for Duque's resignation over lapses in the health department's response to the COVID-19 pandemic. President Rodrigo Duterte shunned the call, deciding to retain the health chief.

Morales, meanwhile, resigned over health issues and has been replaced by former National Bureau of Investigation chief Dante Gierran.