Senators grill PhilHealth officials on the agency’s financial mess

Published August 4, 2020, 5:24 PM

by Hannah Torregoza 

Senators on Tuesday grilled top officials of the Philippine Health Insurance Corp. (PhilHealth) as they expressed dismay on the financial mess the state health insurance agency is now in.


At the Senate committee of the whole’s hearing on the alleged rampant corruption in the health insurance agency, senators were told PhilHealth could cease operations in 2022 if the coronavirus pandemic persists as its actuarial life is now only good for one year.

“By next year, we have no more reserve funds. So our actuarial life is now down to one year,” said Nerissa Santiago, the acting senior vice president on actuarial services and risk management section of PhilHealth.

Prior to the COVID-19 crisis, Santiago said PhilHealth’s actuarial life is actually more than 10 years but the pandemic heavily decreased collections and increased the payouts for the hospitalization of coronavirus patients.

She said PhilHealth is set to incur net operating losses of P90-billion this year and P147-billion in 2021 if the pandemic persists and no vaccine is developed. According to Santiago, the agency can only survive if the government provides additional subsidy.

Senate minority leader Franklin Drilon said PhilHealth’s possible collapse by 2022 is seriously alarming: “This is really a cause of concern for the entire country. I am dumbfounded.”

But Drilon said he believes PhilHealth’s finances are in disarray precisely because it failed to follow simple auditing rules, even the ones set by the Commission on Audit (COA).

At the Senate committee of the whole’s hearing on the alleged rampant corruption in PhilHealth, Drilon grilled PhilHealth President Ricardo Morales regarding the agency’s way of implementing its Interim Reimbursement Mechanism (IRM) policy, which he noted became a “system of advance.”

“We are in this mess because of PhilHealth’s non-compliance with rules, including a simple COA rule. That is why we have all these problems because you disregard all the rules designed to protect public funds,” Drilon told Morales.

Under the COA rules, Drilon said no additional cash advances shall be allowed to any official or employee unless the previous cash advance given to him/her is first settled or a proper accounting thereof is made.

“Per COA rules, you must first liquidate before further advances be made,” Drilon reminded PhilHealth upon learning that the agency released about P15-billion to the hospitals from its controversial IRM program even if only P1-billion was liquidated.

“Even the name Interim Reimbursement Mechanism is a misnomer because this is not a system of reimbursement but an advance—one with very weak liquidation procedure, ” Drilon said in disbelief.

The minority chief also lamented how nothing has changed in PhilHealth since the Senate conducted a thorough investigation on the allegations of fraudulent claims, overpayments, and ghost dialysis last year.

“We are at war, yet it seems that the plague of PhilHealth corruption could be more fatal than any other virus,” said Drilon.  “How can you sleep well at night?” he added.

“It is absolutely outrageous and offensive that in the midst of our fight against a dreaded disease that has so far infected over 100,000 of our people, killed over 2,000 people, claimed over five million jobs, and brought hunger to over 5 million families, the agency mandated to provide health insurance coverage and ensure accessible health care services for Filipinos continues to be haunted by controversies,” he pointed out.

Senate Majority Leader Juan Miguel “Migz” Zubiri said he is saddened and frustrated on the state of the government’s health insurance system, as he noted that many Filipinos do not really benefit anything from PhilHealth and are forced to pay for their huge medical bills when they are hospitalized.

Zubiri is particularly saddened over the testimony of ex-PhilHealth anti-fraud officer Thorsson Montes Keith who disclosed the existence of a mafia that runs  a “syndicate-like” implementation of the IRM scheme.

Keith was among those who resigned from his post in PhilHealth following a controversial meeting that escalated to a “shouting match” as they debated on an alleged overpriced ICT system project.

According to Keith, the recent irregularities in PhilHealth resulted to a loss of P15-billion worth of government funds.

“Ang masasabi ko lang (All I can say is)  there’s a special place in hell for people who take advantage of the misery of others!” Zubiri said.

“I fully support this investigation towards an overhauling of the system in PhilHealth and to prosecute those who are guilty of corruption,” the majority leader said.

Meanwhile, Senate President Vicente Sotto III has ordered the Senate secretariat to issue a subpoena duces tecum on the documents pertaining to the alleged “overpriced” ICT equipment.

Sotto issued the directive after Sen. Panfilo Lacson grilled Augustus De Villa, another high-ranking PhilHealth official, whom he said was involved in the supposed procurement of network switches.

According to Lacson, PhilHealth awarded a P4.8-million contract for 15 units of CISCO catalyst switches when its market price was only over P939,000. Had the procurement pushed through, the government would have lost P3.878-million. He said the overpricing was a “blatant” and “brazen” act of corruption.

Keith, during the hearing, said De Villa ripped the pages of the document. De Villa, on the other hand, said he cannot remember ripping the pages and said the document still exists but he doesn’t remember where they are.

This did not sit well with Lacson who immediately filed a motion asking the committee to subpoena the documents on the ICT project.

“This is not the first time that an IT equipment procurement is fraught with anomaly,” Lacson stressed, pointing out that the COA had earlier flagged PhilHealth for purchasing network switches that were left unused and are still in their boxes when it was inspected.