House body seeks to scrap PhilHealth case rates, IRM

THE House committee looking into fund irregularities in the Philippine Health Insurance Corp. (PhilHealth) on Monday called for the scrapping of the insurer’s “case rates” and its interim reimbursement mechanism (IRM) for hospitals.

“The case or package rate system is the root of all evil and corruption in PhilHealth. IRM is its offspring,” Anakalusugan party-list Rep. Mike Defensor, chairman of the House committee on public accounts, said.

Defensor said 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 coronavirus disease-19 (COVID-19)-related ailments. For mild pneumonia, the package costs almost P44,000. A health facility can declare its treatment for colds, cough and fever as COVID -connected mild pneumonia and get paid for P44,000 even if the actual cost is only P15,000 or P20,000,” said Defensor.

Defensor pointed out that PhilHealth officials have admitted that even “probable and suspected COVID-19 cases” could qualify for the COVID 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 P30 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.”

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

Defensor pointed out that PhilHealth president Ricardo Morales himself has admitted such collusion in one of his committee’s hearings.

“This has been going on since 2013. The Commission on Audit (COA) has been raising red flags about possible financial losses in the billions in its annual reports. And yet, PhilHealth officials see no evil, hear no evil, speak no evil. We wonder why. They are even defending their case rates,” he said.

The CoA estimates that PhilHealth has been “overpaying” health facilities by at least 20 percent through package rates. It calculated such overpayments at P154 billion over a six-year period - 2013 to 2018.

Defensor said Health Secretary Francisco Duque lll, as PhilHealth board chairman, was reported last week to have ordered a review of IRM.

“Instead of ordering a review, Secretary Duque should have scrapped the case rates and IRM altogether and ordered a recall of all PhilHealth funds advanced to hospitals and other recipients, and an audit of all reimbursement claims,” he said.