State-run Philippine Health Insurance Corp. (PhilHealth) is under scrutiny for weak anti-fraud safeguards that may have left billions of pesos in public funds at risk, the government’s policy think tank has warned.

In a Dec. 23, 2025, discussion paper titled “Winning the Game: Strengthening PhilHealth’s Provider Fraud Control Mechanisms towards Improved Service Delivery and Financial Risk Protection for Filipinos,” researchers from Philippine Institute for Development Studies (PIDS) flagged gaps in the health insurer’s oversight, citing a narrow definition of fraud and reliance on manual, fragmented detection systems.

“Rather than proactively monitoring providers, PhilHealth’s reliance on pre-authorization to prevent fraud emphasizes cost containment over setting incentives for efficient and quality service delivery,” the think tank noted.

The report, authored by Vanessa T. Siy Van, Jemar Anne V. Sigua, Therese Jules P. Tomas, Jhanna Uy, and Valerie Gilbert T. Ulep, said the insurer’s current systems fail to detect many types of fraudulent activities commonly seen in diagnostic-related group global budget (DRG-GB) setups.

Limited human and information technology (IT) resources further exacerbate the problem, PIDS said, preventing routine data monitoring and analysis and causing fraud to be significantly underestimated.

To address these issues, PIDS recommended that PhilHealth broaden its definition of fraud, strengthen prevention measures, and deter providers from exploiting the system, covering fraudulent practices across the full continuum of care and those that may arise as the insurer transitions to a DRG-GB setup.

PIDS also urged the creation of a coherent fraud control process that integrates fraud monitoring into provider performance evaluations and payment adjustments, using the global budget (GB) to incentivize proper provider behavior.

The think tank further suggested monitoring patient readmissions and using tools such as health care provider performance assessment system (HCP-PAS) to track quality of care, patient satisfaction, financial risk protection, and potential fraud within pay-for-performance (P4P) measures.

It also recommended that PhilHealth focus on strategic fraud control activities by investing in human and IT resources, warning that simply hiring more evaluators is ineffective when claims are processed manually and that reforms should adopt a systematic approach to detection.

PIDS emphasized that reforms should include developing standardized protocols for medical prepayment review (MPR) and medical post-audit (MPA), institutionalizing these processes, and identifying checks that can be automated to reduce manual work and improve efficiency.

Finally, PIDS urged PhilHealth to use automated flags based on historical data to target procedures, conditions, and providers with high rates of past fraud, and recommended hiring and training additional technical personnel to implement anti-fraud reforms and ensure these innovations are fully utilized.