Corrupt officials of the Philippine Health Insurance Corporation (PhilHealth) must be prosecuted and sent to jail.

President Duterte stressed this during his public address aired on state television Tuesday, adding that he will even endorse cases to be filed by the Department of Justice (DOJ).

“'Yung PhilHealth ang dapat imbestigahan at dapat i-prosecute lahat at dapat ikulong. Kung iyan na lang ang trabaho ko sa maiwan ko sa tat --- dalawang taon, iyan na rin ang gagawain ko (PhilHealth must be investigated and all those involved must be prosecuted and jailed. If that will be my job in the remaining two years, I will do it)," he said during his public address aired on state television Tuesday.

"One of the things that --- few things that I can do in the remaining two years of my term, uubusin ko ito ‘yung panahon ko (I will spend my term) to work on the cases for people who are involved in corruption in PhilHealth,” he added.

Duterte has renewed his commitment to combat corruption in government during his meeting with several Cabinet members in Davao City Monday. Apart from the PhilHealth controversy, he tackled plans to make a full accounting of the funds spent on coronavirus response as well as compel agencies to publish procurement plans in the newspapers for transparency.

The President had earlier ordered the creation of a task force to probe the allegations of corruption and other anomalies in PhilHeath. The panel, led by the Department of Justice, is authorized to look into PhilHealth's finances, conduct lifestyle checks on officials and employees, and recommend preventive suspension on officials pending the probe.

In the meeting with the President, Justice Secretary Menardo Guevarra gave an update on efforts of the task force probing PhilHealth.

According to Guevarra, the investigation will center on the alleged fraudulent activities in PhilHealth's information technology system, legal sector, and interim reimbursement mechanism. He said they will also implement lifestyle checks on certain officials and recommend structural reforms in PhilHealth.

Abolish graft-prone PhilHealth mechanism

At the House of Representatives, Anakalusugan Rep. Michael Defensor on Monday sought the abolition of the controversial “case rates” system and multi-billion peso interim reimbursement mechanism (IRM) being implemented by PhilHealth.

Defensor, chairman of the House Committee on Public Accounts, made the recommendation as the House panel prepares for the resumption of hearings into the alleged fund irregularities in the state medical care insurer.

The committee has invited resource persons who might shed light into the alleged massive insurance fraud being blamed on a doctor in Region 12 in Mindanao.

The fraudulent activities have reportedly turned violent, resulting in the death of a witness and a suspected hired killer.

Root of all evil

“The case or package rate system is the root of all evil and corruption in PhilHealth. IRM is its offspring,” Defensor said.

The veteran administration lawmaker explained that under the case rate system, PhilHealth pays for the entire treatment package cost that it has fixed, even if such cost is much lower than the expenses a patient-member incurs.

“For instance, they have four case rates for new coronavirus disease or COVID-related ailments. For mild pneumonia, the package costs almost ₱44,000. A health facility can declare its treatment for colds, cough, and fever as COVID-connected mild pneumonia and get paid for ₱44,000 even if the actual cost is only ₱15,000 or ₱20,000,” he said.

The party-list solon pointed out that PhilHealth officials have admitted that even “probable and suspected COVID cases” could qualify for the COVID-19 packages.

“This opens the floodgates for a free-for-all bonanza of fraud and corruption. Even now, there are more COVID-19 reimbursement claims in the Ilocos, Southern Luzon, and Western Visayas regions than actual cases recorded by the Department of Health,” he said.

He proposed that instead of package rates, PhilHealth should pay for the actual cost of a member’s hospitalization, treatment, and medicines.

“They can consider the case rates as cost limits to conserve their funds,” he said.

He expressed apprehension that a large portion of the ₱30 billion advanced by PhilHealth to hospitals and other health facilities under its IRM could just go down the drain through this “fraud and manipulation-prone package cost system.”

While the IRM is supposedly aimed at helping hospitals cope with the huge medical cost for COVID-19 cases by advancing funds to them, Defensor noted that even specialty clinics for dialysis and non-COVID ailments were granted IRM funds.

Making matters worse is the allegation that hospitals with pending cases of fraud and other fund irregularities were also recipients of millions of pesos in IRM.

“Such system clearly breeds corruption because of collusion among hospitals, patients and corrupt PhilHealth officials and personnel,” he added.