Junk PhilHealth 'case rates' -- lawmaker

August 24, 2020

CITING irregularities, a House leader has called for the scrapping of the Philippine Health Insurance Corp. (PhilHealth) “case rates” and its interim reimbursement mechanism (IRM) for hospitals.

Chairman of the House committee on public accounts and Anakalusugan Rep. Mike Defensor said the case or package rate system is the root of all evil and corruption in PhilHealth and that IRM is its offspring.

The committee is investigating the irregularities in PhilHealth learned that the insurance agency issued at least P1.5 billion IRM to preferred hospitals.

According to Defensor, 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 COVID-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,” he said.

Defensor pointed out that PhilHealth officials have admitted that even “probable and suspected COVID 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 reimbursement claims in the Ilocos, Southern Luzon and Western Visayas regions than actual cases recorded by the Department of Health,” he added.

The solon proposed that instead of package rates, PhilHealth should pay for the actual cost of a member’s hospitalization, treatment and medicines.

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.”

Defensor pointed out that PhilHealth president Ricardo Morales himself 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.