Task Force: PhilHealth execs negligent on IRM implementation, concealed info and documents

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Metro Manila (CNN Philippines, September 15)— Key officials of the embattled Philippine Health Insurance Corporation were found to be negligent in some of their duties, including in the implementation of the agency’s controversial interim reimbursement mechanism, according to investigators.

In its 177-page report to President Rodrigo Duterte, the Justice Department-led Task Force said that members of the PhilHealth board of directors and executive committee “have not shown the due diligence required of them in the discharge of their duties.”

The draft report, sent to the chief executive on Monday but details of which were revealed on Tuesday, particularly focused on three main issues— the implementation of the IRM, the approval of budget for the purchase of information and communications technology equipment, and “questionable” policies and practices within the agency.

Negligence in IRM approval, implementation

In its statement, the DOJ-led task force said it found negligence on the part of the PhilHealth board and executive committee with regards to the implementation of the IRM, a prepayment scheme to assist hospitals affected by “fortuitous” events such as the COVID-19 pandemic.

Specifically, it pointed out that the IRM fund releases were “rushed” when the circular implementing the scheme was not yet effective.

Investigators also noted that the scheme was rolled out without sufficient standards and guidelines, which made the releases “susceptible to abuse.”

“IRM Fund releases were made despite the absence of mechanisms to monitor fund utilization and liquidation, and without taxes due thereon being withheld,” the task force’s statement read.

Withholding info, documents

The Task Force also found that some members of the executive committee— who were not named— “purposely withheld” information and documents to obtain approval on their requested budget allocations for the procurement of certain ICT equipment.

“In one instance, a request for budget worth over P730M was made which were not included in the corporation’s Information System Strategic Plan as required by law,” it said.

The Task Force added that the board also approved a proposal to procure network switches for one of PhilHealth’s offices, despite the Commission on Audit’s findings that there were similar switches left unused.

Questionable policies

The Task Force also highlighted PhilHealth’s corporate policies and practices which have "failed" to check and penalize irregularities done by agency personnel as well as healthcare institutions.

“(The Task Force) looked into the settlement of cases involving fictitious crediting of remittances, where contributions were diverted to a private account, or where payment for an HCI (health care institution) was diverted to an undisclosed account. In both these cases, the Task Force found that Philhealth did not file a criminal complaint against the perpetrators as it should,” it noted.

Probers also found that on at least six occasions, the penalty of suspension against healthcare institutions — despite being affirmed by the courts— were downgraded to payment of fines.

“The Task Force concluded that the totality of the evidence supports the reasonable conclusion that wrongful acts or omissions on the part of certain key corporate officers of PhilHealth have been committed,” it said. “It recommended that the President strongly admonish and remind the Chairman and Members of the Board of the grave consequences of their action or inaction.”

Duterte during his Monday night address first revealed that he has approved the task force’s recommendation to file complaints against top officials of PhilHealth over the alleged anomalies within the agency.

Among the executives he mentioned were former PhilHealth CEO Ricardo Morales, Senior Vice President and Chief Information Officer Jovita Aragona, Chief Operating Officer Arnel De Jesus, Senior Vice President on Fund Management Sector Renato Limsiaco, Jr., Acting Senior Manager, Information Technology and Management Department Calixto Gabuya, Jr., and Senior Vice President on Health Finance Policy Sector Israel Pargas.

Embattled Health Secretary Francisco Duque, who serves as ex-officio chairperson of the agency, was not included in the initial list.

This raised questions from lawmakers and netizens alike, but the DOJ stressed that composite teams are conducting further investigations on the case. Justice Secretary Menardo Guevarra added that "more people may be charged" in the course of the probe.

PhilHealth, for its part, said it will await the official copy of the Task Force's report and will submit to whatever instructions Duterte will issue based on the recommendations.