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
Cheat sheet on Task Force PhilHealth's fact-finding probe, complaints to be filed
Kristine Joy Patag ( - September 15, 2020 - 12:29pm

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.”

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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