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
Whistleblower accuses PhilHealth execs of stealing P15 billion through fraud schemes
Bella Perez-Rubio (Philstar.com) - August 4, 2020 - 1:18pm

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: September 14, 2020 - 11:10pm

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.

September 14, 2020 - 11:10pm

Task Force PhilHealth has recommended complaints against former PhilHealth CEO Ricardo Morales, Senior Vice President Jovita Aragona, officer-in-charge Calixto Gabuya Jr. over alleged corruption at the state insurer related to overpriced ICT systems and other issues.

President Rodrigo Duterte announced the recommendations at a meeting of the IATF, part of which was televised.

September 1, 2020 - 4:01pm

Senate President Tito Sotto reports the findings of the Senate Committee of the Whole following its investigation into alleged anomalies at PhilHealth.

Sotto admits that he is taking the task of reporting the Senate panel's findings with some reluctance in the middle of the COVID-19 pandemic, noting that "we should not change horses mid-stream."

"It is suggested that we must let the pandemic first subside, before advocating for changes, in the areas of leadership, organization, systems and operations of PhilHealth," Sotto says.

September 1, 2020 - 9:19am

Newly appointed PhilHealth chief Dante Gierran admits he is "very scared" of taking over the state insurer.

"I'm scared because I don't know the operations of PhilHealth. Unlike NBI, I knew the operations of NBI but PhilHealth, wala. I do not know about public health," Gierran tells ANC's "Headstart" Tuesday morning.

The former NBI director adds he does not have experience about public health but he knows about financial management.

August 25, 2020 - 8:32pm

President Rodrigo Duterte has "stated that it would be best for [PhilHealth CEO Ricardo Morales] and for PhilHealth to give up his post during these critical times for the agency," Justice Secretary Menardo Guevarra says.

Guevarra says the president had noted Morales' health.

The secretary adds that Executive Secretary Salvador Medialdea has already talked to Morales "and that the latter said he would understand if he had to be replaced."

August 18, 2020 - 11:32am

Sen. Panfilo Lacson warns PhilHealth President and CEO Ricardo Morales and Senior Vice President Renato Limsiaco Jr. that they may face charges should the alleged irregularities in the state insurer be proven.

"Malamang, maliligo kayo sa kaso kapag ibinahagi na ni SP Tito Sotto kay DOJ Secretary Menardo Guevarra ang lahat na records ng proceedinhs ng pagdinig na sinasagawa namin ngayon," Lacson says.

Lacson recalled that in the previous Senate hearing, Limsiaco admitted that PhilHealth remitted P156 million to the Bureau of Internal Revenue last August 3, claiming that he charged the amount to the Corporate Operational Budget of the agency. 

"Then, he followed up with another lie - that he didn't know that it was an obligation under the law that he had to withhold taxes," the senator says. 

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