PhilHealth bleeding; reserves may be depleted by 2022 – Senate

MANILA, Philippines – The Senate has determined that Philippine Health Insurance Corp. (PhilHealth) suffers a financial “hemorrhage” due to mismanagement that has been compounded by corruption.

In his report on the Senate Committee of the Whole investigation into corruption at the state insurer, Senate President Vicente Sotto III on Tuesday called for a comprehensive review of PhilHealth’s financial life after one of its officials said it already would not have a reserve fund for 2022..

“PhilHealth is hemorrhaging due to the inefficient running of the corporation, compounded by internal corrupt practices,” Sotto said.

“How much does PhilHealth bleed here? In terms of the reported debt-to-equity ratio, it appears that PhilHealth is bleeding to death because it does not have enough money to pay its creditors in the event of liquidation, ”he said in the committee’s 88-page report.

Based on PhilHealth’s 2019 financial statement, it has P111 billion in liabilities and P109 billion in equity, which is a debt-to-equity ratio of 1 to .99, Sotto said.

This could be less if the Senate does not take into account the P14 billion increase in capital based on “prior year adjustments” that the agency has yet to justify, he said.

He pointed to an accusation by PhilHealth board member Alejandro Cabading that the financial statements were rigged to make it look like the state insurance company was up to date when in fact it was overrun with debt and bankrupt.

SVP’s dire forecast

The Senate also took seriously PhilHealth Senior Vice President Nerissa Santiago’s statement that the company would no longer have a reserve fund by 2022 and would need an additional subsidy from the government to stay afloat.

“If SVP Santiago’s statement was meant to scare the bejesus out of our stupor, it did. Therefore, there is an extremely urgent need for an intensive and extensive review and inspection of the financial life of the corporation before, like everyone else, it goes to the dogs, ”Sotto said.

He said PhilHealth was in a “deep hole.”

“We are still not sure how deep. Unless we discover the true state of PhilHealth’s finances, we will never know. And that lack of knowledge is something that all of us cannot afford to have, ”he said.

Sotto also questioned PhilHealth’s inaction in administrative and criminal cases and the dilution of charges against its errant employees.

He cited the case of recently resigned senior vice president Rodolfo del Rosario, who was in charge of administrative insertion of the budget in connection with the construction of PhilHealth’s corporate center when he headed the Department of Physical Infrastructure Resources.

Impunity

Del Rosario’s fellow defendant was fired but was found guilty of simple negligence of duty and fined an amount equal to 15 days of his salary, Sotto said.

“If PhilHealth’s internal policy is really to grant its employees impunity or impose sanctions that do not correspond to the violations committed, the committee [of the whole] It doesn’t surprise him now why the agency’s performance is so lousy and deplorable, ”he said.

He also cited Region II employees who had deposited P9.7 million in funds for B. Braun Avitum Philippines, a dialysis clinic, at Balanga Rural Bank instead of Deutsche Bank. These employees were charged with simple negligence of duty despite the substantial amount involved, he said.

Employees implicated in another case involving P1.17 million in fraudulent cancer treatment claims were charged with simple misconduct despite an investigative report recommending much more serious charges, including syndicated scam, it added.

MRI ‘big mistake’

PhilHealth also “made a big mistake” when its planned payments for the interim reimbursement mechanism (IRM) were “much higher than its assumptions” about the number of COVID-19 patients this year, Sotto said.

The IRM is an emergency fund that will be used to help medical facilities deal with “random events” like the current pandemic.

It said its officials estimated that PhilHealth would spend P3.3 billion treating 209,000 COVID-19 patients in 2020, but allocated a total of P26.8 billion for MRI, a whopping allocation of more than 700 percent of what it was supposed to be. spent.

More than half of the fund had already been distributed, including to some hospitals that did not even treat COVID-19 patients or those that were not accredited by PhilHealth and those with pending cases.

The Senate report, signed by 22 of the 24 senators, endorsed the criminal accusation against Health Secretary Francisco Duque III, resigned the head of PhilHealth, Ricardo Morales, and several others for irregular expenses and projects.

Sotto said they had already provided the Justice Department with documents and other evidence to bring charges against Duque, who chairs the PhilHealth board, and the others.

The Senate report also recommended charges of embezzlement of public funds, illegal use of public funds and violation of anti-theft law against PhilHealth Executive.

Vice President and Chief Operating Officer Arnel de Jesus and Senior Vice Presidents Renato Limsiaco Jr. and Israel Francis Pargas for “improper and illegal implementation” of the IRM and for “gross abuse of discretion or gross negligence in determining the beneficiary of the IRM without valid criteria for distribution, ”Sotto said.

Surcharge

He said Del Rosario should face charges for failing to pursue cases brought against roving PhilHealth staff and hospitals.

Sotto also filed criminal cases against PhilHealth Senior Vice President Jovita Aragon and Acting Senior Manager Calixto Gabuya for “their act of overvaluing” the frustrated IT project and for “hiding / altering documents.”

He said PhilHealth officials should also be charged in administrative cases for negligence of duty, insubordination and violation of Audit Commission rules.

Duque said the criminal charges would give me “an opportunity to clarify,” insisting that he had no role in the two PhilHealth programs that were allegedly plagued with wrongdoing: the TI project and the IRM.

“I was not a signatory to the resolution of the board. Those who signed were the board members who were present. I was away for almost four months due to the presidency of the IATF (Inter-institutional working group for the management of emerging infectious diseases), ”Duque told the Inquirer.

He said the TI project was not approved because it was “still pending deliberations” and supported the creation of a research committee to investigate TI’s proposal.

–With a report by Jovic Yee

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