Corruption allegations rock Philippine health insurance corporation amid COVID-19

A COVID-19 swab testing at a gymnasium in Navotas City, Metro Manila, Philippines. Photo by: Eloisa Lopez / Reuters

MANILA — The Philippines, hit hard by the coronavirus pandemic, is also in the middle of an alleged corruption scandal. The Philippine Health Insurance Corporation — PhilHealth — which has been helping finance COVID-19 testing and treatment in the country, has been rocked with allegations of fund mismanagement and overpricing.

Last week, the Philippine senate, which serves as the upper house of the country’s legislative body, approved a report recommending the filing of charges of corruption against several senior officials of the corporation. These included Ricardo Morales, who recently resigned as CEO, and the country’s Secretary of Health Francisco Duque III who sits as ex-officio chairman of the board.

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The recommendations follow a series of hearings in August in which lawmakers found irregularities in the implementation of the corporation’s interim reimbursement mechanism, which provides payment to hospitals affected by a disaster, such as a typhoon, to ensure their continued operations and provision of health care services.

Data from Senate report.

In March, the corporation initiated the implementation of the mechanism in response to the COVID-19 pandemic. However, lawmakers found the mechanism started operations even before standard operating procedures were approved, making its operations “illegal,” and didn’t have clear guidelines as to which health care institutions were eligible to receive funding.

Lawmakers found it questionable that some institutions that are non-COVID-19 health facilities, or reported few COVID-19 cases, received large amounts of funding and received payments within just a few days compared to others. They also questioned why some hospitals that didn’t have PhilHealth accreditation and have pending cases of alleged anomalous monetary claims also received funding under the mechanism.

The report also recommended charges be filed against officials involved in the alleged overpricing of proposed procurement of several pieces of IT equipment.

Data from Senate report.

PhilHealth plays a vital role in the Philippines’ health agenda, and is funded by direct and indirect paying members. Indirect paying members are those whose contributions are paid for or shouldered by government or private entities.

It is tasked with the implementation of the country’s Universal Health Care Law, signed in 2019, which automatically enrols all Filipinos under the National Health Insurance Program, administered by PhilHealth.

“It is most important that we restore the trust of the people in an institution that is a vital pillar for universal healthcare. This is crucial for the health of all Filipinos.”

— Risa Hontiveros, Philippine senator

But the corruption allegations — not the first in the corporation’s history — raise questions about the law’s implementation and the impact of these allegations and probes on the COVID-19 response in the country. While the number of confirmed cases has been declining in recent days, the country still constitutes the majority of cases in Southeast Asia at 261,216, as of Sept. 13. COVID-19 deaths in the country are at 4,371.

Senator Risa Hontiveros, a known health and women’s rights advocate and co-author of the UHC law, told Devex over email that while the interim reimbursement mechanism has been suspended, lawmakers have urged PhilHealth to address issues they raised in the report, such as withholding taxes, getting hospitals to immediately liquidate, and establishing clear guidelines for the mechanism.

The corporation has not withheld taxes in its fund releases despite having the mandate, and didn’t appear to have a clear liquidation process for the interim reimbursement mechanism, according to the committee’s report.

“Currently, PhilHealth will be left with no choice but to revert to its usual process of reimbursing hospitals based on claims submitted. This also may take a longer time, but I hope that with the aid of IT developments, PhilHealth can provide hospitals better turnaround time for the claims,” Hontiveros said.

The lawmaker and other health advocates in the country see digitization as a solution to speed up the corporation’s processes, particularly on reimbursements, but also in reducing fraudulent activities that have plagued the corporation. Digitization, they believe, will aid in data transparency and allow for easier tracking of the corporation’s funding.

Ensuring data transparency will be critical in the rollout of the UHC law, which PhilHealth initially said would be fully implemented by mid-2021. The COVID-19 pandemic could affect that timeline however.

Before the pandemic, PhilHealth had already said it is faced with a challenge in fully implementing the law — ensuring the eligibility of all Filipinos to benefit from health insurance — while ensuring the program’s sustainability. The projected Philippine population in 2019 was over 108 million.

In addition, with the corporation’s reputation “severely damaged,” Hontiveros said there is hesitation among many in congress to provide the corporation a bigger subsidy, which is sorely needed for senior citizens and others who rely on government funding for their coverage.

The lawmaker and other health advocates argue that the pandemic only underscores the importance of having UHC in place.

“Issues on Philhealth [are] deep rooted. This may affect the budget allocation for social health insurance, especially now that we are in the budget season and is being used to question gains on sin taxes. Nevertheless, the need to finance social health insurance and other [government] intervention [especially] in the time of pandemic cannot be discounted,” Atty Paula Tanquieng of the AGAP Coalition told Devex over email. AGAP is a multisectoral organization advocating for health reforms in the country.

Hontiveros said the Philippines Department of Health should start implementing provisions on primary health care in the UHC law to rationalize hospital utilization.

“While we weed out the corruption our healthcare systems have been infected with, we have to begin implementing the law anyway, with integrity, because lives are on the line every day. The crisis is now,” she said.

Apart from a transparent health system, Tanquieng also said there is a need to revamp the corporation’s governance systems and ensure perpetrators are punished to deter others from committing fraudulent activities.

Hontiveros hopes that investigations continue and that “appropriate charges are filed to punish the guilty and clear the names of the innocent.”

“It is most important that we restore the trust of the people in an institution that is a vital pillar for universal healthcare. This is crucial for the health of all Filipinos,” she said.

A task force ordered by President Rodrigo Duterte to investigate irregularities in PhilHealth is expected to submit its report on Monday.

About the author

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.