PACC: Remove ‘Corrupt’ PhilHealth Officials From ‘Head To Foot’; More Allegations Surface During Senate Probe

The Presidential Anti-Corruption Commission (PACC) is seeking the immediate removal from “head to foot” of all officials of the Philippine Health Insurance Corp. (PhilHealth) allegedly involved in corruption and their replacement with officers-in-charge to keep the cash-strapped agency running amid the coronavirus disease 2019 (COVID-19) pandemic.

PACC Commissioner Greco Belgica told the Senate inquiry into the alleged corruption in PhilHealth that of all the major cases investigated by the commission in the past few years, he found the mess in the state firm as the “worst” in terms of the “thieving” and the “callousness” of some officials.

“Even if we are at the Senate hearing now, the thieving is happening now because the system has not changed. Except when the President removes top officials,” Belgica said in Filipino as he testified before the Senate Committee of the Whole where all senators are members.

“But removing the head is not enough. Everyone, from the head to the feet involved in corruption, must be removed, charged and punished. They must all be replaced,” Belgica pointed out.

He said 36 PhilHealth officials are in the initial list of the PACC under investigation, with 13 to 15 of them close to being charged before the Office of the Ombudsman.

The inquiry continues to focus on two issues: the Interim Reimbursement Mechanism (IRM), wherein favored hospitals were allegedly advanced millions of pesos as assistance amid the pandemic, and the apparent P2.1 billion overprice in the acquisition of information and communications technology (ICT) equipment.

“We have a long list of those we’re investigating,” Belgica said. “We will be filing cases only against those who are really guilty. We will not let any of them slip away.”

“Our message to all those at PhilHealth: if you know anything about corruption and you continue to keep silent, then you’re complicit. In the Holy Book, stealing is punishable by death,” he added.

Belgica said some P2 billion to P3 billion released by PhilHealth weekly is exposed to corruption. Earlier, he estimated that about P153 billion in PhilHealth funds was lost to corruption from 2013 to 2018.

He cited PhilHealth’s ICT system and the legal setup as the main drivers of corruption.

Belgica described the ICT system as “not transparent” and “fragmented despite the billions of pesos spent” for the structure, opening many opportunities for both PhilHealth officials and hospitals to make money, such as the “upcasing” of patients’ ailments and “ghost” or fake claimants.

“It’s like you building a house and the one you asked to buy from the hardware colluded with the owner on the prices of the materials, who later collects his commission from the hardware,” Belgica said.

He explained that many public and private institutions, like the Land Bank of the Philippines and Development Bank of the Philippines, have offered to upgrade PhilHealth’s ICT system at no cost to the government.

“But they did not act on the offers because they will lose their source of incomes. They don’t need an additional P2 billion if they really want a solution,” Belgica said, referring to PhilHealth officials.

There were also multiple allegations raised on Tuesday, Aug. 11, during the second hearing of the Senate Committee of the Whole on the anomalies hounding the government corporation, triggered by the resignation of PhilHealth anti-fraud officer Thorrsson Montes Keith.

Hospital in Duterte hometown gets lion’s share of reimbursements

The IRM, through which PhilHealth extends cash advances to hospitals ahead of natural disasters and calamities, continued to draw scrutiny. Keith claimed during the first hearing on Aug. 4 that PhilHealth officials pocketed some P15 billion through fraudulent schemes partly through the IRM.

PhilHealth president and chief executive officer Ricardo Morales denied any outside influence or “palakasan” in the release of the allocations as part of the response for COVID-19.

“We don’t accept that there is influence in the release of the IRM,” PhilHealth legal counsel Roberto Labe Jr. said.

Under the IRM, the Southern Philippines Medical Center in President Duterte’s home city of Davao got the biggest amount of reimbursements in connection with COVID-19 – despite the fact that it was not the country’s primary referral hospital for the contagious disease.

Labe said the SPMC received P326 million. In contrast, the Philippine General Hospital in Manila received P263 million. The Davao Regional Medical Center in Tagum City, Davao del Norte came third with P209 million.

Rounding up the top 10 IRM recipients were the Vicente Sotto Memorial Medical Center in Cebu City (P204 million), Jose B. Lingad Memorial Regional Hospital in San Fernando City, Pampanga (P201 million), National Kidney and Transplant Institute in Quezon City (P179 million), Baguio General Hospital and Medical Center (P165 million), Northern Mindanao Medical Center in Cagayan de Oro City (P150.2 million), Quirino Memorial Medical Center in Quezon City (P150 million) and Eastern Visayas Regional Medical Center in Tacloban City (P146.2 million).

Only three of the hospitals listed above are in Metro Manila, which accounts for 75,399 COVID-19 cases – or more than half of the 136,638 recorded by the Department of Health as of Aug. 10. Davao is not among the five regions with the highest number of COVID-19 cases.

Meanwhile, the top three and top five regions of Calabarzon and Western Visayas were not represented in the list of the biggest IRM recipients.

Senate Majority Leader Juan Miguel Zubiri said the Western Visayas Medical Center in Iloilo City, the Corazon Locsin Montelibano Memorial Regional Hospital in Bacolod City and the Ospital ng Maynila have yet to receive P121.4 million, P41.7 million and P19.3 million in IRM claims, respectively.

Labe denied any anomalies. “All the releases have been provided with receipts. IRM was not pocketed by anyone as alleged,” he said.

‘Clear case of upcasing’

COVID-19 was hardly the only disease that hospitals were suspected of exploiting for personal gain.

Zubiri cited “a true story told me by one of those who are in PhilHealth as one of the investigators,” wherein some healthcare institutions “pay people P1,000 to act as patients in order to claim for more serious ailments from PhilHealth.”

He claimed that some provincial primary hospitals were caught during surprise inspections wherein it was revealed that some of the patients were not actually in the facilities.

“When asked, the hospital staff would say that they would call the patients. The patients would arrive and lie back in bed. When asked where they came from, ang sagot nila nagpakain lang sila ng baboy (they will say they only fed their pigs) and other excuses,” he said.

 Zubiri added that some institutions would prescribe Losartan to patients suffering from hypertension – only to declare their case to be a mild stroke and charge PhilHealth as much as P25,000 in a “clear case of upcasing.”

 He also bared that other institutions would give paracetamol to patients and send them home, and then charge PhilHealth for rooms and medicines.

 P9.7 million diverted to Bataan bank?

 Thorrsson Montes Keith claimed that P9,705,332 in benefit claims meant for hospitals in the Cagayan Valley region were diverted to a rural bank in Bataan between May 2 and May 22, 2019.

 He connected this issue to Legal Sector senior vice president Rodolfo del Rosario, whom board member Alejandro Cabading on Aug. 4 labeled as a member of the so-called “PhilHealth mafia.”

 The amounts were allegedly credited to Editha Conel, head of the Accreditation and Quality Assurance Section of the regional office, and fellow employee Jerome Follante through the Balanga Rural Bank.

 The exact same amount had gone missing from a bank in Cagayan Valley. Keith said Conel and Follante explained that this had been inadvertently credited.

 Keith refused to believe this, since the transfers did not take place in the course of a single transaction. “This is not merely inadvertent, as the multiple transactions connote deliberate intent to defraud the government by embezzling P9,705,332,” he asserted.

 He also contended that the rural bank initially refused to return the amount, but later relented. However, it demanded half of one percent of the amount, or P49,123, as compensation. Keith said Rogelio Pocallan Jr., a senior manager of PhilHealth’s internal legal department, told him that Conel and Follante paid the demanded amount.

 “I was again wondering why they said the transfer was a mere error, yet it is clear that PRO-2 has no authority and access to banks located in other regions – in this case, Bataan in Region 3,” Keith said, referring to PhilHealth Regional Office 2.

 When he investigated Pocallan, Keith said he found out that “he was taking orders from Attorney Rodolfo ‘Jojo’ del Rosario Jr.” Coincidentally, Keith claimed that Del Rosario “had plenty of travels” to Balanga City.

 “Because of this, I also investigated Attorney Del Rosario, and I learned it was supposed to be him who is responsible for conducting investigations on this kind of fraud, but he did nothing and sat on the case for more than a year, to this day,” Keith said.

 Keith added that the incident was not reported to the PhilHealth board of directors or in any official document by the executive committee members who were allegedly aware of it.

 He suspected that it was part of a bigger anomaly.

 “Some people whom I asked information from in PhilHealth believe that the Balanga Rural Bank case was just a decoy to cover up something bigger – corruption by Oscar Abadu and PRO-2 during his stint,” Keith said. Abadu at the time was PhilHealth vice president.

 “The only thing to do is to determine the real owner of the bank account in Balanga, Bataan, and it will open a Pandora’s Box. This case has established one of the modus operandi of the PhilHealth mafia untouchables, and I have identified some of them,” Keith added.

 Del Rosario called Keith’s allegations “ridiculous” and denied failing to take action regarding the incident. He explained that he went to Balanga City because of a “staff meeting” with the DOH.

 “Hindi rin po totoong inupuan ko ’yan kasi may ad hoc committee na diyan (It is not true that I sat on it because there is an ad hoc committee already created for it), and they already submitted their recommendation to the Office of the President on June 15, 2020,” Del Rosario said.

 Sen. Panfilo Lacson, however, questioned the lightness of the administrative liability sought against Conel and Follante for simple neglect of duty. Lacson noted that this is hardly an offense that warrants dismissal from service.

 “You were about to lose P9.7 million, ‘simple neglect of duty’? And then, 11 times nagkaroon ng transaction. ’Di puwedeng systems error (And then, there were transactions 11 times. It cannot be systems error),” Lacson pointed out.

 Three-year-old ‘senior citizen’

 Senators also questioned the possibly “over-bloated” list of senior citizen beneficiaries that include several members aged below 60. Among those listed were a certain Mora Dangdang Caramat, aged 18, and Amita Pason Taladbo, aged three.

 “Iniiba na ninyo ’yung batas. May 18 years old, may 56 years old. Papa’no natin maayos ’to na binago ninyo pati ang classification ng senior citizen (You are changing the law. There’s an 18-year-old, a 56-year-old. How can we fix this if you have changed even the classification of a senior citizen)?” Sen. Francis Tolentino asked officials of the state insurer.

 The senator also flagged the curiously high figures of 40,000 and 10,000 centenarian PhilHealth members in two regions.

 Morales vowed to create a position for corporate data officer. “Ang PhilHealth ang may pinakamalaking database, 109 million members at constant ho na nililinis (PhilHealth has the biggest database, 109 million members and constantly being cleaned up,” he said.

 Resigned out of delicadeza

 PhilHealth vice president for operations Augustus de Villa was the first to tender his irrevocable resignation following the launching of the Senate inquiry. He explained to lawmakers that he left the state corporation out of “delicadeza (propriety).”

 “Ako po ay isang taong marangal, may dignidad at integridad. Malinis po ang aking konsensiya. Naniniwala ako na hindi ako babagay na magsilbi pa sa isang ahensiya ng gobyerno na punong-puno ng alegasyon ng korapsyon at katiwalian. Ako po ay naniniwala na may katotohanan, sinadya man o hindi, at ito po ay base sa pagsusuri lalo na po noong Martes, noong unang hearing (I am an honorable man, with dignity and integrity. My conscience is clear. I believe I am not suited to serve a government agency that is so full of corruption allegations. I believe there is truth, whether intended or not, and this is based on the investigation, especially last Tuesday during the first hearing),” De Villa said.

 Like Morales, De Villa was appointed by Duterte due to his military background. Keith claimed during the previous hearing that De Villa ripped up six pages of a procurement document. De Villa confirmed that this was because the purchase of CISCO network switches had been flagged as overpriced by Etrobal Laborte, former executive assistant to the PhilHealth chief.

 During the hearing, De Villa submitted an affidavit stating the reasons for his resignation last week. He declined to give much details, but said he had to step down to renew his ties with his family, and because he could no longer stand the corruption at PhilHealth.

 He disclosed that last week, Morales called him up and said other senior vice presidents did not trust him. De Villa said he believes his opposition to unstudied proposals at the executive committee level must be the reason for their distrust.

 ‘Yayariin ko kayo’

 Duterte has vowed to send to jail corrupt officials of PhilHealth and said he has to recover the money lost to the supposed anomalies in the state insurer.

 “Huwag kayong magkakamali.. .itong PhilHealth. Sabi ko yayariin ko kayong lahat, maniwala kayo. Iyong mga inosente naman, wala kayong dapat i-ano, tahimik lang kayo at continue working (Do not commit a mistake, PhilHealth. I told you, I will run after all of you, believe me. If you are innocent, you don’t need to worry. Just continue working quietly),” the President said during a televised address aired Monday night.

 "Nakalusot kayo sa ibang maybe presidente o ano pero dito sa akin, sadsad talaga kayo (Maybe you managed to evade other presidents, but you will fall under my watch),” he added.

 Duterte warned he would get the “true” figures of PhilHealth’s finances from the Commission on Audit, one of the agencies that form part of the multi-agency task force formed to probe the issues hounding the state insurer.

 Other members of the justice department-led task force are the Office of the Ombudsman, Civil Service Commission, Office of the Executive Secretary, the PACC and Palace Undersecretary Melchor Quitain. The task force was given the power to conduct lifestyle checks and to slap preventive suspensions.

 “I will really send these sons of b****** to jail... I will recover (the funds)... if the ombudsman would summon you... you can’t say no. I think the ombudsman will be pissed off. You will just be dismissed for refusing to obey the order,” Duterte said.

 He added: “With the help of Cabinet members – I won’t brag, but these are simple people. Why? Why are they really helping me to get rid of you? If possible I would kill you. You know why? Because simply they love their country.”

 Presidential spokesman Harry Roque said Duterte would allow the task force to perform its mandate before acting on calls for him to name a new PhilHealth chief or a caretaker.

 “The President formed the task force, which has extraordinary powers, including the power to impose preventive suspension. He will allow the task force to move. He will respect the decision of the task force... He will wait for the actions of the task force,” Roque said at a press briefing yesterday.

 “(Justice) Secretary Meynard Guevarra, the chairman of the task force, said they can immediately issue an order for preventive suspension. Whether he (Duterte) would assign a new president of PhilHealth, the President has not spoken much about it,” Roque added.

 Roque assured the public that there would be no leadership vacuum if Morales, who is battling cancer, goes on leave. Morales has been advised by his doctor to take a leave of absence to undergo chemotherapy.

 “Whatever the final decision of General Morales is, there would be a system in place to ensure that the work would continue,” Roque said. “The President wishes president Morales speedy recovery. He won’t be harsh on anyone who said he is suffering from a serious illness. We wish him the best and we hope that he recovers right away.”

 Morales’ qualifications

 Morales’ qualification to head PhilHealth was also raised during the hearing, with Sen. Grace Poe asking the Governance Commission for Government-Owned and/or Controlled Corporations (GCG) whether he had been properly screened for the post.

 GCG chairman Samuel Dagpin told the panel that the body screens appointees to a GOCC board, which in turn selects its president or chief executive officer.

 Under the Universal Health Care Law, a member of the PhilHealth must represent a certain sector. In this case, Dagpin surmised that Morales – who is set to go on leave due to lymphoma – was representing the senior citizens’ sector.

 “But you know what, being one of them does not mean that you qualify. What contributions have you done for the sector you identify with?” Poe asked Morales when he agreed with Dagpin that he represented senior citizens, even as he cited his management experience in handling military insurance funds.

 ‘Big brother’

 Senate President Pro Tempore Ralph Recto said the mess in PhilHealth is also the fault of the Cabinet officials who are ex-officio members of the agency.

 Aside from Health Secretary Francisco Duque III, who chairs PhilHealth, other ex-officio members of the board are Finance Secretary Carlos Dominguez, Social Welfare Secretary Rolando Bautista, Budget Secretary Wendell Avisado and Labor Secretary Silvestre Bello III.

 “The PhilHealth budget is about P250 billion and yet we’re left with this. We’re supposed to have big brothers in the board to watch over this,” Recto said. “What have they (ex-officio members) done to make sure our finances are intact?”

 ‘Legislative immunity’

 Upon the motion of Lacson, the committee granted legislative immunity to Keith, Cabading and Laborte.

 Morales said he trusts his former aide, although he rued that Laborte did not disclose his sentiments with him. Morales could not say the same for Keith.

 Belgica proposed an overhaul of PhilHealth’s legal adjudication process, saying the present system led to the low rate of filing of cases against erring hospitals and health care institutions or HCIs.

 He said with at least five steps in resolving claim disputes, there were opportunities for corruption. A complaint will start at the regional office, which will form a fact-finding panel to investigate. The results of the probe will be turned over to another fact-finding body at the PhilHealth central office, which in turn will submit the results to a prosecution team, if applicable. The prosecution team will bring the case for arbitration, whose result could be appealable before the PhilHealth board.

 Belgica proposed that any legal claim must be handled outside PhilHealth.