Whistleblower accuses PhilHealth execs of stealing P15 billion through fraud schemes

Bella Perez-Rubio - Philstar.com
Whistleblower accuses PhilHealth execs of stealing P15 billion through fraud schemes
This undated photo shows members lining up for PhilHealth benefits at an unnamed hospital.
The STAR / File

MANILA, Philippines — Former Philippine Health Insurance Corp. anti-fraud legal officer Thorrsson Keith on Tuesday alleged that executives of the state-run agency have stolen P15 billion from its funds.

"What we found at PhilHealth is the crime of the year due to the syndication of the distribution of cash advance, the interim reimbursement mechanism, and the repeated overpricing of purchased IT equipment," Keith told the Senate in Filipino.

According to Keith, the agency made unwarranted claims payments to select private hospitals amounting to hundreds of millions of pesos.

The anti-fraud legal officer's resignation, which cited "widespread corruption" within the agency, prompted the Senate, the House of Representatives and Malacañang to launch its own investigations into the matter.

COVID-19 response

As the Senate launched its own probe on Tuesday, Sen. Ping Lacson alleged that the agency's interim reimbursement mechanism, which is meant for healthcare institutions hit by calamitous or "fortuitous events," was not being released to the appropriate hospitals.

According to the senator, PhilHealth released "hundreds of millions" to dialysis centers and maternity care providers but could not release P19 million to the Ospital ng Maynila which was accepting COVID-19 cases.

Meanwhile, he flagged that the agency released P45 million in funds to Braun Avitum Philippines, a company of dialysis centers.

PhilHealth President and CEO Ricardo Morales defended this by saying that the company was turning away patients due to a lack of funds.

Lacson, however, refuted this, saying the funds should not have been taken from the Interim Reimbursement Mechanism (IRM), which is meant for calamities.

PhilHealth officials said that P14.97 billion of the P30 billion allocated budget for the IRM has been released as of July 31.

The Ospital ng Maynila has since been temporarily closed due to a surge in COVID-19 infections among its staff.

Alleged overpricing in IT budget

PhilHealth board member Alejandro Cabanding also accused Morales of pushing for the endorsement of overpriced information technology budget items which he says amount to at least P750 million.

"There were numbers in the IT budget in financial reports that do not add up. I brought it up with the board but the most frustrating part is the management seems to be tolerating such acts," Cabanding said.

Morales, in his opening statement said that PhilHealth's fraud index is at 7.5%, amounting to P10.5B potentially lost to fraud.

However, he defended the agency, saying that "there is no health system in the world that is entirely fraud-free."

According to Morales, a robust information management system will aid in weeding out fraud within the agency.

"PhilHealth's allegedly overpriced P2.1 billion It program over three years is paltry compared to the tens of billions of pesos lost to fraud every year," he said.

As these new allegations of corruption are brought to light, the country continues to grapple with a surge in COVID-19 infections and the longest community quarantine in the world.

The Department of Health on Monday placed the national caseload at 106,330 and fatalities at 2,104. 




As It Happens
LATEST UPDATE: October 27, 2020 - 6:53pm

The Philippine Health Insurance Corp. is facing scrutiny anew over more allegations of corruption.

It was in the headlines last year because of an alleged scam involving payments to WellMed Dialysis Center for treatments charged for a patient who had already died.

Follow this thread for updates.

October 27, 2020 - 6:53pm

The Philippine Health Insurance Corporation announces that the agency has released P500 million as partial payment to the Philippine Red Cross. 

"PhilHealth takes exception to the insinuation that it is reckless and is playing on people’s lives. Its prudence in taking charge of its members’ hard-earned contributions is central to the state health insurer. Its exercise of judiciousness is to protect the people and their funds", PhiHealth President and CEO Dante Gierran says in a statement.

October 27, 2020 - 6:51pm

PhilHealth has released P50 million as partial payment to the Philippine Red Cross, PhilHealth President and CEO Dante Gierran says.

"PhilHealth takes exception to the insinuation that it is reckless and is playing on people’s lives. Its prudence in taking charge of its members’ hard-earned contributions is central to the state health insurer," Gierran says.

The state insurer adds that it will expedite the processing of its remaining balance to Red Cross following strict compliance to government accounting rules and regulations.

October 27, 2020 - 3:19pm

Two committees in the House approve a report recommending the filing of administrative and criminal charges against Health Secretary Francisco Duque III, former PhilHealth chief Ricardo Morales and other officials over the widespread corruption in the state health insurer.

October 19, 2020 - 9:17pm

President Rodrigo Duterte says the government will compensate the Philippine Red Cross for COVID-19 tests.

The Red Cross recently halted conducting tests due to the P930 million debt of the Philippine Health Insurance Corporation for the conduct of COVID-19 tests for the government.

"I don't think Sen. (Richard) Gordon would have in his mind to stop. What I'm trying to say is we will pay," Duterte says in a recorded address aired Monday night.

October 15, 2020 - 3:07pm

The Philippine Red Cross will stop conducting COVID-19 tests chargeable to PhilHealth due to the state insurer's outstanding balance.

PRC says it will no longer receive specimens for testing of OFWs, those arriving in airports and seaports, individuals through mega swabbing facilities, frontline health and government workers, and others included in the expanded testing guidelines of the DOH.

"The PRC does not have unlimited resources to replenish the testing kits for its laboratories unless PhilHealth, its major creditor, settles its lawful obligations to the PRC," PRC says in a statement dated October 14.

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