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PhilHealth Lost Over P153 Billion Since 2013 Due to Fraud

  • The Philippine Health Insurance Corp. (PhilHealth) has lost more than P153 billion ($3.1 billion) since 2013 due to fraud.
  • The insurance fraud is made possible because of a lack of transparency and prior validation of members and health care providers (HCP) claims.
  • Another top PhilHealth official, Senior Vice President for Operations and retired Brig. Gen. Augustus de Villa, resigned earlier Thursday amid the agency’s corruption allegations.
  • Visit The Financial Today’s homepage for more stories.

Manila • The Philippine Health Insurance Corp. (PhilHealth) has lost more than P153 billion ($3.1 billion) since 2013, or “roughly 30% of the total claims payment of P512.6 billion” made by the state-run health insurer during the same period due to fraud.

This was according to Presidential Anti-Corruption Commission (PACC) official Greco Belgica, who also said Thursday: “Hindi lang naman ngayon nangyari ito eh. Taon-taon may imbestigasyon sa PhilHealth… Ang nakakapagtaka ay mag-iisang dekada na, wala pa ring nagbabago.”

(It didn’t just happen now. Every year there is an investigation into PhilHealth. Surprisingly it has been almost a decade, nothing has changed.)

Belgica explained in a statement that the P153 billion was “computed conservatively at 20% as set by COA in AOM No. 2-014-003.”

“The overpayment for total claims paid for the same period is at P102.5B, while the estimated losses to fraud is computed at 10% is P51.2B,” he added.

Belgica said the insurance fraud is made possible because of a lack of transparency and prior validation of members and health care providers (HCP) claims. He noted that PhilHealth merely conducts random post-audit, which makes it impossible to audit every claim. So, he said, they were evaluating only claims that are “apparently suspicious.”

“’Yung mga types of frauds kung saan nangyayari ang nakawan can be found in but not limited to: creations of ghost memberships, irregulations (sic) in the conduct of the proceedings, fast-tracking of claims, procurement of IT projects—ito ang fraud committed by employees; Upcasing, non-admitted patients, recruitment, over-bed capacity, multiple claims—ito naman ang fraud committed by HCPs,” he added.

(The types of frauds where theft happens can be found in but not limited to: creations of ghost memberships, irregulations (sic) in the conduct of the proceedings, fast-tracking of claims, procurement of IT projects—this is fraud committed by employees; Upcasing, non-admitted patients, recruitment, over-bed capacity, multiple claims—this is fraud committed by HCPs.)

Last July 23, sources revealed that there was a shouting match between PhilHealth officials over widespread corruption within the health insurance company, with at least one official subsequently resigning—eventually identified as anti-fraud officer Thorrsson Montes Keith.

Keith said in a Senate hearing last Tuesday that due to schemes perpetrated by PhilHealth officials themselves, a syndicate within PhilHealth managed to fatten their pockets with P15 billion.

Apart from this, it was also reported that PhilHealth procured many products at a massively overpriced rate, such as software and gadgets—for example, an Adobe Master Collection Set priced at less than P200,000 was purchased for P21 million.

“My primary job as antifraud legal officer of PhilHealth is to spy on corrupt personnel … What I have discovered in PhilHealth may be called ‘crime of the year,’” Keith had noted. “I believe, based on my investigation, that the (public) money that had been wasted or stolen was more or less P15 billion.”

Another top PhilHealth official, Senior Vice President for Operations and retired Brig. Gen. Augustus de Villa, resigned earlier Thursday amid the agency’s corruption allegations.

According to Belgica, PhilHealth officials can easily siphon funds and claims as there is no validating process for the state-run health insurance firm and little or no auditing is being performed.

“Ang ospital magpapadala sa Philhealth ng billing. Tapos isusumite nila yan through e-claims. Pero ang problema, ang Philhealth, wala namang validating mechanism at wala namang audit na ginagawa, o pagche-check kung yung pinadadala sa kanila na kanilang babayaran ay tama.” he pointed out.

(The hospital will send a billing to PhilHealth. Then, they will submit it through e-claims. But the problem is, PhilHealth has no validating mechanism and there’s no auditing being performed, or checking if the billing sent to the firm for them to pay is correct.)

“PhilHealth has spent billions of pesos on its IT System, however, it has remained fragmented, allowing fraudulent schemes to prosper. Also, the lack of constant monitoring of the user accounts and their corresponding authorized access to the system lead to unauthorized access thereof, thereby giving opportunities for PhilHealth employees to circumvent PhilHealth charter and rules and regulations. As a consequence thereof, there is incessant and perpetual overpayment and payment to ghost patients and members by PhilHealth,” he added.

A Philippine Daily Inquirer investigative article in June 2019 found that “ghost” patients—dead patients but identified as alive in PhilHealth ‘s database—were receiving dialysis treatments shouldered by the agency, which are then pocketed by health facility and PhilHealth officials.

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[Inquirer.net]

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