A government task force investigating corruption in the Philippine Health Insurance Corp. (PhilHealth) said Thursday that the state-owned insurance agency’s information technology systems are unable to detect fraudulent claims.
Justice Undersecretary Markk Perete on Thursday said PhilHealth’s Senior Vice President Jovita Aragona admitted that parts of the agency’s validation processes are still done manually.
Aragona also said the relevant offices failed to specify their required internal control systems when the IT systems were being developed, Perete added.
PhilHealth chief Ricardo Morales earlier testified before the Senate that an improved IT system would help address corruption in the state-owned corporation. He revealed that the insurer is investigating about 20,000 fraudulent claims.
The Task Force PhilHealth, which was formed to investigate allegations of corruption in the agency, held its second hearing on Tuesday.
The task force has agreed to set up teams to thoroughly investigate the IT and legal sectors of PhilHealth, Perete said.
Perete also said Aragona called for an investigation on PhilHealth’s National Capital Region Office, which she claimed was the unit that entered into an allegedly anomalous procurement of network switches.
Corporate Secretary Jonathan Mangaoang and Acting Senior Manager of PhilHealth’s Fact-Finding Investigation and Enforcement Division (FFIED) Ernesto Barbado also testified at the task force’s hearing.
Perete said Barbado asked the task force to look into fake claims being investigated by the FFIED.
Mangaoang explained that the purpose of the controversial interim reimbursement mechanism (IRM) was to ensure that hospitals and medical facilities remained financially viable in case of emergencies and fortuitous events.
Mangaoang also said that the PhilHealth’s board of directors has approved a recommendation to grant amnesty to hospitals that belatedly filed claims for reimbursements from 2011 onwards.
Justice Secretary Menardo Guevarra formed Task Force PhilHealth in response to an order from President Rodrigo Duterte. It is composed of the Office of the Ombudsman, the Commission on Audit, the Civil Service Commission, and the Office of the President, with the National Bureau of Investigation and the Anti-Money Laundering Council for support.
Meanwhile, Senator Richard Gordon called for the removal of all of the agency’s regional directors to address widespread corruption.
Senator Grace Poe, on the other hand, said there was “gross incompetence” in the agency’s leadership.
Speaking in an interview over ABS-CBN News Channel, Gordon noted that some regional directors have been in their positions for 20 to 22 years.
“So you can see from there the upcasing of cases to increase the payment for claims. They also practice favoritism in the payments,” said Gordon.
He also said PhilHealth’s spending should also be strictly monitored. Hd said there should be a board of supervisors composed of eminent persons to monitor what is happening, and within the organization, a monitoring group in the central office.
Gordon said other senators have also recommended a computerized system for announcements on deaths that PhilHealth, as well as the Social Security System, Government Service Insurance System, and the Philippine Veterans Affairs Office can access to avoid payments of benefits to members who were already dead.
Poe, on the other hand, called for an overhaul of top management.
“We’ve seen that the board members, especially the heads, are either grossly incompetent or complicit or negligent… I think that if you’re guilty of one of those, then you don’t deserve a post, especially at this time that we have this pandemic when we rely on the leadership of PhilHealth and the Department of Health,” she said.
She also cited the need for a proper audit of PhilHealth’s transactions should be done.
Also on Thursday, B. Braun Avitum, the dialysis provider that was recently dragged into the PhilHealth mess, said it was following the agency’s guidelines on cash advances under its Interim Reimbursement Mechanism (IRM).
B. Braun Avitum , in a report on “24 Oras,” said that out of their 18 IRM applications, only five were approved. It also said that there is a memorandum of agreement for these in March.
The medical technology company added that its transactions were legitimate and that it was registered in the Security and Exchange Commission.
“B. Braun Avitum Philippines Incorporated is duly registered with the Security and Exchange Comissions. Secondly, there are no ghost dialysis machines in any of the B. Braun Avitum dialysis clinics that we operate,” Managing Director Eduardo Rodriguez said.
It said that it has no hand in the PhilHealth transactions at the Balanga Rural Bank.
“Thirdly, B. Braun Avitum does not conduct business through favors or any means other than legitimate and above board transactions at all times,” Rodriguez said.
The company has previously committed to cooperate with the government for transparency after it was repeatedly mentioned during the Senate hearings on alleged irregularities in PhilHealth’s cash advances to health care institutions.
On Wednesday, Health Secretary Francisco Duque III ordered PhilHealth to review the IRM following corruption allegations and concerns raised by legislators.
“Confusion has arisen from the circulars issued in the haste to readily provide the needed financial support to the health care institutions (HCIs) during the pandemic,” Duque said in a statement,
“Let us look into any loopholes and clarify procedures to ensure that the issues raised are responded to,” Duque said.
Duque is chairman of the PhilHealth board.
The DOH said that the IRM was used in previous calamities such as Tropical Storm Ondoy in 2009, Supertyphoon Yolanda in 2013, the Marawi siege in 2017 and the Taal Volcano eruption earlier this year.
Controversies surrounding the IRM came out after a whistleblower accused PhilHealth officials of pocketing P15 billion in funds through fraudulent schemes.
PhilHealth and several of its officials have denied the allegations.
Senator Panfilo Lacson earlier questioned the use of the fund for dialysis centers and maternity clinics.
However, Duque insisted that they are also covered.
“The effects of the pandemic, while falling heavily on COVID-19 referral facilities, have affected the entire health system. These include cancer and dialysis treatment centers, maternity clinics and other similar facilities that provide care for patients while the regular hospitals are busy addressing COVID patients. For this reason, they should also be assisted by PhilHealth,” Duque said.
Duque also asked PhilHealth to ensure that their system in identifying IRM recipients is systematic and “meritorious, in the light of allegations of palakasan (influence peddling) made before the legislative bodies.”
He said despite the suspension of the IRM, Filipinos can still avail of PhilHealth benefits, including those for COVID-19.
PhilHealth workers on Thursday appealed on Thursday for a stop to “sweeping” corruption allegations against the agency, saying these have hurt morale.
“The employees of PhilHealth are demoralized. We are hurt,” said Ma. Fe Francisco, president of the
PhilHealth Workers for Hope, Integrity, Transparency, and Empowerment.
“We are asking for the sweeping and general statements against all PhilHealth employees to stop,” she added.
