Corruption and inefficiency in PhilHealth

BIZLINKS - Rey Gamboa - The Philippine Star

The telltale signs of something going wrong at the Philippine Health Insurance Corp. (PhilHealth) had been evident years ago when the Commission on Audit first tagged cases of ghost claims and padded receipts – and these were not yet for dialysis treatments of kidney patients.

In fact, our research showed that PhilHealth suffered from other weaknesses, one among them being the diversion of premium payments worth about P114 million in 2012, a heist that was made possible through the supposed connivance of PhilHealth employees with a syndicate criminal group.

The more prevalent crimes, however, still involve fake and bloated claims of health benefits – and the earliest detected that triggered an investigation by the Senate Blue Ribbon Committee in 2015 was about senior citizens supposedly being forced to undergo cataract removals.

Even then, the Senate committee noted that there was a sizeable number of cases pending resolution six years after they were filed, or just a few years after PhilHealth was created to implement universal health coverage for Filipinos.

Insurance fraud, without saying, is one of the most rampant crimes worldwide, and it can come in all sorts of creative packages and involve varying sums starting with petty amounts of padded prescription purchases to reimbursements for treatment of fake or dead patients.

Cycle of irregularities

Unfortunately, in the Philippines, the fraud is not just rampant, but also cyclical. The nature of crime seems to change over time depending on when the modus operandi is uncovered and after PhilHealth adopts measures to curb abuse.

In the case of cataract removals, a surge in benefit reimbursements was noted in 2015, which led to a series of investigations. For every cataract surgery, an outpatient procedure that could take as quickly as 15 minutes, PhilHealth reimbursed P16,000. In 2014 alone, PhilHealth paid P2 billion for such claims, equivalent to 125,000 procedures.

This was apparently made possible with the help of scouts who would look for patients in exchange for a fee. Abuse happened when patients who did not need eye surgery were made to undergo the procedure; worse was when bogus patients were fabricated.

This abuse was somehow broken when PhilHealth issued a new ruling that limited eye doctors to 50 claims per month. Yet, the systemic problem that bred similar abuses apparently was not addressed.

Where there is big money, chances are, abuse is just around the corner. One of the biggest, if not the biggest, appropriations by PhilHealth for benefit reimbursements is for pneumonia cases. Hemodialysis is also one.

‘Upcasing’ and overpayment

Not surprisingly, simple cough and cold cases were upgraded to pneumonia, which could fetch from P15,000 to P32,000 per patient. COA had repeatedly flagged this practice of “upcasing” as prevalent in government hospitals and health clinics.

Fraudulently upgraded cases allow the attending physician to charge higher, and open opportunities to pad medicine charges through fake receipts. This is clearly unethical on the part of the medical practitioner, and a crime when fabrication of other charges follow.

The all-case rates (ACR) payment scheme, on the other hand, straddles a gray area when it gives hospitals more than they ask for. A provincial hospital, for example, may have forwarded a billing of P500 for a dialysis, but because ACR allows a maximum of P4,000, the system will process that latter amount.

PhilHealth officials may argue that this does not line the pockets of individuals since the reimbursements are given to the government health facility, and comes in handy for other expenses associated with its day-to-day operations.

Still, this smacks of some form of irregularity, least of all is that it gives a false indication of the true amount of money that PhilHealth spends on an ailment, especially if the overpayment is three or four times what is being billed.

Bigger scam

Under the Duterte government, universal health care and PhilHealth as well as the Department of Health have been given increased importance – and a larger budget allocation, thanks to the passage of the sin tax reform initiative in 2012 and recent amendments further increasing taxes on tobacco products.

PhilHealth, being a government-owned and controlled corporation, is prone to abuse by politicians at both the local and national levels considering the amount of money it gets from the Treasury every year. This year, PhilHealth has a budget allocation of P67.35 billion, 24.4 percent higher than the previous year.

We have heard stories about politicians involved in eye clinics that had managed to filch from PhilHealth benefit claims for forced and ghost cataract removal operations. It’s not far-fetched to unearth a similar connection to the recently exposed dialysis scam.

If the figures given by PhilHealth whistleblowers is correct, the P154 billion that had been lost to overpayments, “upcasing,” and other forms of fraud over the last six years since 2013 is a scandal that’s so much bigger than the P10-billion pork barrel scam that took place from 2003 to 2013.

Prosecution of guilty parties

Publicizing the fraud and anomalies is just the initial step. Clearly, a comprehensive and non-partisan systems review of PhilHealth is needed to ensure that taxpayers’ money is spent wisely, and that it is shielded from political maneuverings.

More importantly, the results of ongoing investigations must be completed as soon as possible. The public has to see concrete examples of guilty parties being prosecuted to the fullest extent of the law.

Corruption is an abominable malaise in our society, but coupling this with an inefficient system, one that is under the control of the state at that, is doubly lethal to a nation that has over 30 million needy people who rely on government funds for their health needs.

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We are actively using two social networking websites to reach out more often and even interact with and engage our readers, friends and colleagues in the various areas of interest that I tackle in my column. Please like us on www.facebook.com/ReyGamboa and follow us on www.twitter.com/ReyGamboa.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.

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