Cheat sheet on Task Force PhilHealth's fact-finding probe, complaints to be filed

Kristine Joy Patag - Philstar.com
Cheat sheet on Task Force PhilHealth's fact-finding probe, complaints to be filed
President Rodrigo Roa Duterte reviews a document during a meeting with the Inter-Agency Task Force on the Emerging Infectious Diseases (IATF-EID) core members at the Malago Clubhouse in Malacañang on September 14, 2020.
Presidential Photo / Ace Morandante

MANILA, Philippines — The Department of Justice-led panel that investigated the Philippine Health Insurance (PhilHealth) Corp. handed its 177-page report to the President Rodrigo Duterte on Monday.

The report detailed the investigation and findings of “Task Force PhilHealth” within the 30-day deadline given by the president.

“In its 177-page report, the task force concluded that ‘persons who are supposed to set the policies and operational guidelines for the management of PhilHealth—the Board of Directors and the Executive Committee—have not shown the due diligence require of them in the discharge of their duties,” read the statement released by DOJ on Tuesday morning.

Duterte, on Monday night, approved the panel’s recommendations which include filing of complaints against certain key officials of the state insurer.

Here is a breakdown of the Task Force’s report, based on DOJ’s statement:

Who are the officers to face complaints?

  • President and Chief Executive Officer (PCEO) Ricardo C. Morales, now resigned, for: Violation of Sections 3(e), (g) of Republic Act 3019 (Anti-Graft and Corrupt Practices Act); Malversation of Public Funds or Property and Illegal Use of Public Funds or Property under the Revised Penal Code; and  violation of Sections 251, 255 and 272 of the National Internal Revenue Code;
  • Executive Vice President and Chief Operating Officer Arnel De Jesus for violation of Section 3(e) of RA No. 3019;
  • Senior Vice President Jovita V. Aragona, Chief Information Officer and Head of the Information Management Sector, for: violation of Sections 3(a), (e), (g) of RA No. 3019; Frauds against the public treasury and similar offenses under the Revised Penal Code;
  • Senior Vice President Renato Limsiaco, Jr. for: violation of Section 3(e) of RA No. 3019; and Malversation of Public Funds or Property under the Revised Penal Code;
  • Senior Vice President Israel Francis A. Pargas of the Health Financial Policy Sector for: violation of Section 3(e) of RA No. 3019;
  • Officer in Charge Calixto Gabuya, Jr. for:  violation of Sections 3(e), (g) of RA No. 3019; and Frauds against the public treasury and similar offenses under the Revised Penal Code; and
  • Division Chief Bobby A. Crisostomo for violation of Section 3(a) of RA No. 3019.

These officers will also face administrative complaints for, among others, dishonesty, gross neglect of duty, grave misconduct, and conduct prejudicial to the best interest of service.

What are the grounds for the complaints?

Implementation of the Interim Reimbursement Mechanism

The IRM is a mechanism under the National Health Insurance Program that grants financial aid to healthcare providers affected by calamities.

“On 30 January 2020, the Board issued a Circular that, among others, made the IRM a ‘special privilege’ (or a special process that deviates from the normal procedures adopted by the corporation) to be made available every time a fortuitous event would arise,” the DOJ noted.

But the panel noted that PhilHealth’s executive committee and board rushed the fund releases under the mechanism, even when the circular was yet to take effect. There were also no sufficient standards and guidelines on its implementation and no mechanisms to monitor fund utilization and liquidation, and without taxes due thereon.

“The Task Force found negligence on the part of the Executive Committee and Board in the implementation of the IRM,” it said.

RELATED: PhilHealth suspends IRM implementation

Concealment of information on ICT procurement

The panel also found that members of PhilHealth’s executive committee “purposely withheld the presentation of important information or audit documents in order to obtain the Board’s approval on their requested budget allocations to procure certain ICT equipment.”

The task force noted that there was a request for budget over P730 million but was not included in its Information System Strategic Plan. There were also “major discrepancies or inconsistencies” in the agency’s software and hardware inventory, and certain documents for ICT expenditures was also not presented to the board.

The Board had also approved a proposal to procure network switches for the PhilHealth Regional Office at the National Capital Region, “notwithstanding the existence of a COA Audit Memorandum on the non-utilization of 24 similar switches.”

RELATED: DOJ: PhilHealth exec says current IT system cannot detect fraudulent claims

Questionable policies and weak enforcement of practices on reviewing and penalizing wrongdoing

The panel also flagged the state insurer’s policy towards “settlement of claims without accountability, and even the grant of wholesale amnesty in favor of [health care institutions] with claims that appear to be no longer enforceable against the corporation.”

It reviewed cases involving fictitious crediting of remittances where contributions were diverted to a private account or to an undisclosed account—but no criminal complaint was filed.

The task force flagged at least six instances where the suspension penalty for the HCI was changed to mere payment of fines. In at least 20 instances, the Board also withheld suspension and dispense with filing of legal action in exchange of payment and fines.

RELATED: DOJ flags 'low, slow' prosecution rate of PhilHealth legal division

Duque gets reprimand

While the task force found the PhilHealth officers “negligent in some of its decisions,” this was  “mitigated by the active concealment of vital documents and the apparent misrepresentation by those who have sought the Board’s approval.”

The task force recommended that Duterte “strongly admonish and remind the Chairman and Members of the Board of the grave consequences of their action or inaction.”

Health Secretary Francisco Duque III, who was not among the officers to face complaints as of now, is the chairman of PhilHealth’s board, by virtue of his position.

During the investigation, Duterte has expressed his support to Duque amid calls for his resignation. The calls were compounded by the investigation into PhilHealth and the government’s slow response to the COVID-19 pandemic.

Duque, in a meeting aired September 7, shared his “frustrations.”

"I have to express my frustrations, sir, I hope you dont mind. 'Yong mga pumirma, hindi sila ni-recommend for the filing of cases. Pero 'yong mga hindi pumirma, yun lang ang idinawit. Parang bakit naman ganon, height of injustice, unfairness (Those who signed were not recommended for the filing of cases. But those signed, they were charged. It seems like the height of injustice, unfairness)," the health chief told Duterte.

"'Yon sir ang di ko matanggap sa dibdib ko hindi ako nakakatulog dahil dito (That is what I cannot accept in my chest, sir, I cannot sleep because of this)," he added.

What happens next?

The complaints will be filed either with the DOJ’s prosecution, Office of the Ombudsman or with PhilHealth, for administrative complaints. Justice Undersecretary Markk Perete said this would depend on the crime committed or rank of the respondent.

The complaints will be filed as soon as supporting documents are finalized, he added. During a preliminary investigation, respondents will be given the opportunity to refute allegations against them.

Meanwhile, composite teams formed by the panel will pursue deeper probes into “specific acts of fraud or corruption committed by health providers and PhilHealth personnel alike.”

Perete refused to release a full copy of the report, citing ongoing investigations by member-agencies which include the Commission on Audit, Office of the Ombudsman, Civil Service Commission and the Presidential Anti-Corruption Commission among others.

HCI and even Duque may still face complaints, too.

Justice Secretary Menardo Guevarra explained: “Our report is about our initial findings only. Further investigations will be conducted and more people may be charged.”

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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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