(UPDATED) The Senate committee of the whole on Tuesday, September 1, 2020, recommended the filing of criminal and administrative charges against Health Secretary Francisco Duque III and executive officers and employees of the state-owned Philippine Health Insurance Corporation (PhilHealth) over alleged “corruption and mismanagement”.

Senate President Vicente Sotto III presented the committee report before the plenary Tuesday.

The report recommended to the Department of Justice and the Office of the Ombudsman the filing of the following charges:
  • Malversation of public funds, illegal use of public funds and violation of the Anti-Graft and Corrupt Practices Act against Duque, chairman of the board; Ricardo Morales, former president and CEO; Arnel de Jesus, executive vice president and chief operating officer; Renato Limsiaco Jr., senior vice president for fund management sector; Israel Francis Pargas, senior vice president for health finance policy sector; and all other officials and employees who were involved in the improper and illegal implementation of the interim reimbursement mechanism (IRM);
  • Malversation of public funds, violation of the National Internal Revenue Code, violation of Republic Act 1051 and violation of the Anti-Graft and Corrupt Practices Act against Duque, Morales, Limsiaco, Pargas and other involved officials and employees for failing to withhold tax liabilities of health care institutions that received IRM funds and for charging the corporate operating budget;
  • Prosecution of offenses, negligence and tolerance, and violation of the Anti-Graft and Corrupt Practices Act against Rodolfo del Rosario Jr., senior vice president for legal sector and all other PhilHealth officials and employees who failed to act upon the cases filed before them; and
  • Falsification, fraud against the public treasury, removal/concealment/destruction of public document, violation of the Anti-Graft and Corrupt Practices Act and violation of the Government Procurement Reform Act against Jovita Aragona, senior vice president for information management sector; Calixto Gabuya Jr., acting senior manager of the information technology and management department; and other PhilHealth officials and employees who connived with and participated in the overpricing of IT supply and concealment/alteration of documents.

The Senate also recommended administrative charges, as follows:
  • Neglect of duty and insubordination against Morales and senior vice president Dennis Mas for not implementing board resolutions on courtesy resignations;
  • Violation of Commission on Audit (COA) rules against Morales and De Jesus; and
  • Gross neglect of duty against Del Rosario and all other employees of the Protest and Appeal Review Department of PhilHealth for failing to act on pending cases.

“Filing charges against responsible individuals, healthcare institutions and corporations will prove PhilHealth’s and the government’s commitment to ensure that government funds are not mismanaged and that corruption is not tolerated,” Sotto read the report.

These and any subsequent conviction are seen to deter other corrupt activities, he added.

Among the other recommendations were:
  • Immediately require healthcare institutions which received IRM funds to liquidate utilized funds and return the unutilized amount;
  • PhilHealth should immediately pay the claims of private hospitals, prioritizing the Covid-19 referral hospitals and those with high number of Covid-19 admissions;
  • COA should be allowed to audit every stage of operations of PhilHealth, even at the regional level without any hindrance to ensure that government funds are properly managed and spent;
  • Outsource the IT services of PhilHealth;
  • Outsource the benefits claims to avoid backlogs and massive reimbursement delays;
  • All high-ranking PhilHealth executive officers down to the regional vice presidents to file their courtesy resignations; and
  • PhilHealth should implement a regular reassignment of its regional vice presidents every three years.

The committee of the whole was constituted in July 2020 to look into the alleged rampant corruption, inefficiency and incompetence in PhilHealth.

The committee held three public hearings, with some senators attending the meeting via videoconferencing because of the coronavirus disease 2019 (Covid-19) pandemic, on August 4, 11 and 18.

Reading the committee report, Sotto said they found the following “grave issues”: the legal basis for IRM and its “shady” implementation; corruption in the ICT project; the alleged manipulation of PhilHealth’s financial statements; irregularities in the legal sector; and the B. Braun Avitum Philippines Inc. dialysis center.

Under the IRM, PhilHealth advances funds to healthcare institutions directly hit by fortuitous events.

To contribute to the government’s Covid-19 response, PhilHealth allowed healthcare institutions to apply for IRM funds equivalent to 90 days of benefit claims in 2019.

Among the irregularities in the legal sector is their “supreme power” to modify, if not disregard, the decision of a higher court.

The report cited the case of Perpetual Succor Hospital in Cebu. The Court of Appeals had affirmed a board resolution suspending the hospital for three months and ordering it to pay a fine of P10,000.

PhilHealth, however, did not execute the court decision and instead refunded claims during the supposed three-month suspension.

This not only tolerated the fraudulent act of Perpetual Succor but also eventually led to losses for PhilHealth, Sotto said. (Marites Villamor-Ilano/SunStar Philippines)