Press Release
August 18, 2019

Drilon: COA special audit may shed light on Philhealth controversy

Senate Minority Leader Franklin Drilon reiterated Sunday his call for the Commission on Audit (COA) to conduct a special audit on Philippine Health Insurance Corp.

In an interview over DzBB, Drilon again raised serious concerns on the agency's ability to cover medical expenses of Filipinos in the next 10 years amid allegations of corruption, overpayment and non-payment of hospital claims and poor collection efficiency.

"It involves billion pesos of public money. The government provides subsidy to Philhealth to cover for the medical expenses of the poor and informal sector, which amounts to P257 billion next year and P319 billion by 2024 due to the implementation of the Universal Health Care Act," Drilon said.

"Nakakatakot ito dahil nakasalalay rito yung benefits ng mga Pilipino. Malaking pera ang nakasalalay rito. We should not stop until we get to the bottom of this issue, so we can come up with solutions and legislation to prevent corruption, increase the agency's collection efficiency and improve claims processing and benefit development," Drilon said.

"The government made massive strides in expanding access to a comprehensive set of health care services and medical coverage for Filipinos, but we will not be able to effectively implement it if we fail to address the root cause of irregularities in Philhealth and provide a system that could prevent corruption and enhance the agency's performance," Drilon said.

"I therefore urge COA to conduct a special audit immediately. An annual audit is not enough given that a lot issues were raised, including overpayment, underpayment and nonpayment of claims," Drilon said.

"May overpayment na nga, may corruption pa. Kaya hindi nababayaran yung claims ng hospital. Itong mga regional public hospitals natin, kung sila po ang nilalapitan ng taumbayan, mayroon silang operating expenses at humihingi sila ng reimbursement sa Philhealth, kung hindi nababayaran ang hospitals, baka hindi na sila tumanggap ng pasyente," Drilon said.

For the past five years, the agency registered P26 billion net operating loss and has outstanding P48 billion in unpaid claims, to date, he stressed.

Philhealth president and chief executive officer Ricardo Morales said the agency is considering tapping an international consultancy firm to conduct a thorough audit of its funds.

But Drilon said that the Constitution mandates the COA as the government's auditing body. He said the agency may be able to outsource a private firm to audit their funds but COA must have the final say.

"One of the solutions we must look at is to strengthen the auditing department of Philhealth. Auditing should be done on a daily basis, if possible, so that we can prevent irregularities to take place, causing billions pesos of taxpayers' money," Drilon said.

Drilon also hit the agencies poor collection efficiency, saying it will affect the agency's actuarial life.

"We should look at the agency's collection efficiency, because there are claims that it's only at 50% and, yet, the claims are overwhelming," Drilon said.

For every P100 collection, Philhealth only collects P50, he added.

"Isa pa sa nakikita nating problema sa Philhealth ay ang madalas pagpalit ng liderato. Makikita natin na unusual na apat ang pangulo sa loob ng tatlong taon. Something is wrong with the system. Paano mo naman mapatakbo ang isang organisasyon na bawat taon ay nagpapalit ng pangulo," Drilon said.

For the past three years, Philhealth has had for presidents, he noted.

"We must conduct a special audit, review the system and strengthen the agency's auditing department," he concluded.

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