COA notes PhilHealth’s nearly P937-M overpayment to healthcare institutions in 2019

MANILA – The Philippines Health Insurance Corporation (PhilHealth) overpaid almost P937 million last year to various healthcare institutions, must reimburse almost P468 million in employer share and should recover almost P153 million in unauthorized benefits for its employees, the Committee on Audit (COA) said in a recent report.

The findings in the COA’s report on PhilHealth’s operations in 2018 and 2019 were officially relayed to officials at the state health insurer on Sept. 30 amid legal action being taken against former officials and holders of the agency for alleged corruption, even as the country faces the coronavirus pandemic.

According to the COA report signed by Dir. Cleotilde Tuazon, “Full refunds of package fees (all fees per case (ACR) and benefit Z) to various health care institutions (HCI) for 312,577 sample claims despite of the lowest member-patient actual hospital charges plus the maximum professional fee (PF) amount resulted in an overpayment of P936.653 million “last year.

“The PhilHealth program goal of increasing protection of the financial health of member patients” is not fully achieved “as HCIs benefited the most from it,” said the COA.

Health care providers in the National Capital Region and the Rizal, Caraga, Ilocos, Eastern Visayas and Zamboanga regions were overpaid from PhilHealth, state auditors said.

HCIs in the Caraga region obtained most of the PhilHealth overpayment through the case rate system with P375,160,840, followed by NCR and Rizal with P364,084,35, Zamboanga with P192,346,970, Ilocos with P1, 430,339 and Eastern Visayas with P846,899.

The HCIs of NCR and Rizal, meanwhile, received claims of excessive benefits for P2,783,160 million, according to the report.

These overpayments, COA said, are contrary to the state insurer’s mandate to increase protection of the financial health of its member patients.

“The existing payment scheme is detrimental to PhilHealth’s interests as [it] incurred unnecessary expenses, “he said.

“In addition, the overpayments made to HCIs constitute a loss to PhilHealth as it could have been used to pay other benefit claims.”

The insurance agency became embroiled in a controversy this year after one of its officials, attorney Thorrsson Montes Keith, resigned due to alleged widespread corruption at the agency.

Keith also questioned the alleged irregular disbursement of a P15 billion fund to hospitals for COVID-19 related expenses.

A Senate investigation found that, as of June 9, 2020, PhilHealth had released P14 billion in COVID-19 funds to 632 healthcare institutions.

Of that amount, P231.15 million were delivered to dialysis centers and maternity clinics, which did not care for COVID-19 patients, a Senate report showed.

recommendations

The audit agency said PhilHealth should review how it implements the case fees and the Z benefits claims package because the “issue in question is a recurring one.”

“We recommend that senior management vigorously reconsider our audit recommendation from the previous year to reevaluate the current guidelines on the implementation of All Case Rates and Z Benefit Claims package rates,” he said.

PhilHealth, state auditors noted, should include a provision in reimbursement based on a member’s actual hospitalization charges, the professional fee or the amount of the case fee, “whichever is less.”

In addition, the COA marked as irregular the “payments for the employer’s 30 percent participation in the PhilHealth Provident Fund (PPF)” from 2015 to 2018 amounting to P467,858 million “due to the lack of prior evaluation by part of the Department of Budget and Management (DBM).

“We recommend that the Administration … reimburse the amount of P467.898 million of employer participation … (and) secure the DBM assessment as a requirement to grant the release of the 2019 employer contribution,” he said.

It also seeks “immediate reimbursement for PhilHealth employees” from Welfare Support Assistance (WeSA) in the amount of P152.935 million, covering the period from February 2012 to December 2019.

“The reinstatement of the Welfare Support Assistance (WeSA) grant with retroactive effect along with the simultaneous payment of the existing Subsistence and Laundry Allowances is invalid and irregular,” said the COA.

These payments have no legal basis, amount to double compensation, do not have authority from the Ministry of Health and were obtained from savings without due authority, said the COA.

The COA said it cannot “express an opinion” on PhilHealth’s available financial statements (FS), saying that it “has not been able to obtain sufficient and appropriate audit evidence to provide a basis for an audit opinion.”

Among his recommendations is that PhilHealth “design and implement sound internal control over financial reporting that prevents, detects and corrects material errors in time to ensure the reliability of the FS and avoid their re-establishment annually.”

He also suggested that PhilHealth “prioritize the acquisition of IT systems to fully automate its operations for efficient and effective management, monitoring and reporting of its financial transactions.”

In August, then-PhilHealth chairman Ricardo Morales said “corrupt officials” at the agency have been trying to question the company’s drive to automate systems and make it easier to detect wrongdoing at the state insurance company.

Morales claimed that some PhilHealth officials have been trying to discredit the executive board’s decision to buy equipment by saying the items were overpriced and were being used to mask corruption.