The public health threat of the COVID-19 pandemic has prevented the Philippine Health Insurance Corp. (PhilHealth) from suspending a number of hospitals and medical clinics found guilty of committing fraud in their medical insurance claims.

PhilHealth President Ricardo Morales informed congressmen of the agency's predicament in going after partner hospitals and medical clinics even as he agreed to study the proposal of Anakalusugan Rep. Michael Defensor to abolish the case rate system in granting medical benefits to members of the state-run medical insurance firm.

Defensor, who presided over the initial hearing of the Committee on Accounts investigation into PhilHealth anomalies, said the case rate system could be the “root of corruption” that has caused financial worries for the agency.

During the hearing, Marikina City Rep. Stella Luz Quimbo said she is not convinced that PhilHealth will run out of funds to continue operating next year, hinting that this claim of its officials may be the result of wrong premises in its actuarial study.

Even Commission on Audit Director Clotilde Tuazon admitted the audit agency is also harboring strong doubts that the PhilHealth claim is correct. 

“Hindi rin kami convinced, but since there is an actuarial audit being conducted by the Insurance Commission, we do not want to preempt it,” said Tuazon.

Appearing at the virtual hearing, Morales admitted that a number of irregularities have indeed been uncovered by his office and these include "up casing" (false claim about the seriousness of an illness), misrepresentation of period of confinement, and claim for patients who are already dead.

He said there are at least 20,000 cases now under investigation, with 8,000 of such suspected fraud being reported in the Central office while the rest are processed by PhilHealth regional offices.

Morales did not discount the possibility of collusion between corruption claimants and their personnel.

A number of cases have already been resolved with recommendations for suspension of several hospitals and medical clinics but these penalties could not be executed due to the COVID -19 situation.

 During the hearing, Defensor asked Morales to get rid of the case rate system, saying that this process of covering members' benefits embeds a system of corruption in the firm.

According to Defensor, the graft-ridden case rate system which grants uniform medical benefits for each disease that causes the hospitalization of a member was launched in 2011, under the term of then President Benigno Aquino III.

In putting the blame on Morales’ predecessors, Defensor practically exonerated the incumbent PhilHealth chief executive of any involvement in anomalies as he pointed out that the official was not yet around when the case rate system was initiated.

Defensor noted that under the case rate system, pneumonia cases sought to be financed reached an average P700,000 while urinary tract infection has a P300,000 subsidy.

Morales admitted that “up casing” may have been committed through collusion among the claimants and PhilHealth personnel.