May Maliligo sa Kaso! Senate Hearing on Corruption at PhilHealth

Ping Says

August 18, 2020 - Sen. Lacson’s Opening Statement at the Senate Committee of the Whole Hearing on Corruption at PhilHealth:

Sa nakaraang dalawang araw na pagdinig ng komite ng buong Senado na ating isinagawa sa kasalukuyan, buong singkad na maghapon nang parehong araw ng Martes, pinaligiran po tayo ng mga sinungaling at mga manloloko. Sabi nga ng nanay ng kasama nating Senator Grace Poe – “Ang sinungaling ay kapatid ng magnanakaw!”

Let me prove what I just said, Mr. President and distinguished colleagues.

Only last week, I asked Fund Management Sector Senior Vice President Renato Limsiaco, Jr., why despite PhilHealth being a withholding tax agent of the BIR, he failed to deduct and withhold from the funds advanced to the private hospitals and other health care institutions the taxes due them under the National Internal Revenue Code.

At first, Mr. Limsiaco said, and I quote – “I’m sorry to say, ang IRM natin, advances” – attempting to pass off that advance payments are not subject to withholding tax. When I countered that advance payments are subject to withholding tax, he admitted that PhilHealth had in fact remitted P156 million to the BIR last August 3, and then claimed that he charged the amount to the Corporate Operational Budget of PhilHealth. Then, he followed up with another lie – that he didn’t know that it was an obligation under the law that he had to withhold taxes. This was on August 11, Tuesday.

Well, I am going to show you a memorandum signed by PCEO Morales dated August 7, four days before Mr Limsiaco patently lied before this committee, when he testified under oath he was not aware of PhilHealth’s obligation as a withholding tax agent. Base sa nasabing Memorandum ni PCEO Morales, nakapag-remita na ng 2% expanded withholding tax (EWT) ang PhilHealth sa BIR Pasig RDO 043 noong ika-3 ng Agosto. At galing daw ang buwis na ito sa na-release na pondo ng IRM sa HCIs hanggang July 31, 2020 na ang kabuuang halaga ay P156,738,887.

Lumilitaw na bukod sa kulang-kulang na P15B na IRM releases, pinag-abono pa nila ang PhilHealth mula sa benefit claims ng kanilang Corporate Operating Budget (COB) na kanilang ipinangbayad ng buwis na dapat ay pinapataw na bago pa lamang i-release ang pondo ng IRM sa mga health care institutions. Double whammy ang tawag dito.

At ito pa, Mr. President. Sa nasabing memorandum inatasan din ang RVPs na mag-isyu ng BIR Form 2307 o “Certificate of Creditable Tax Withheld At Source” sa mga HCIs kahit sa totoo lang ay hindi pa ito nababayaran ng mga ospital at subject pa rin sa liquidation.

As a reminder, ang BIR Form 2307 ay iniisyu bilang katibayan na nakapagbayad na ng expanded withholding taxes ang isang ospital para sa kanilang IRM advance payment na tinanggap. Kung susundan natin ang argumento ni SVP Limsiaco na wala pang buwis na nakokolekta sa mga ospital, hindi ba bukod sa pagsisinungaling, inuutsan pa nila ni Gen Morales ang mga RVPs na mag-commit ng krimeng Falsification of Public Documents?

In our foregoing inquiry about PhilHealth’s IRM, it may be a truism that when there is smoke, there is fire.

One of the contentions of the policy is that the determination of IRM funds for HCIs, its consequent approval, and fund releases, are very centralized. It follows that the preference and prioritization of which hospitals to receive the IRM funds remain as the discretion of the Central Office.

Not surprisingly, we have observed the same pattern of preferential treatment or favoritism to certain HCIs in some regions. Of particular concerns are the implementation of IRMs in Regions 6 and 8, probably another smoking gun that will be revealed later in today’s hearing.

Ang isa pang harap-harapang pagsisinungaling at panloloko during the Senate hearing last week, IT chief Jovita Aragona and Mr. Calixto Gabuya kept insisting that the grossly overpriced network switch that they purchased amounting to P348,000 each was the Cisco 2960XR 24 Port. Enough with the smoke and mirrors, Chief Aragona and Mr. Gabuya! No amount of technicalities will conceal the fact that you repeatedly lied to mislead not just this Committee, but the Filipino public. Malinaw pa sa sikat ng araw – it was Cisco 9200 24 Port and not the Cisco 2960XR 24 Port. Even Micro Genesis Software Inc., the winning bidder, virtually admitted in their press release that Ms. Aragona and Mr. Gabuya, even corporate legal counsel Atty. Labe, lied and tried to fool us, Mr. President.

Marami pang mga palusot ang narinig ng committee na ito at ng sambayanan sa mala-gintong presyo ng mga IT equipment na nabili na at plano pang bilihin ng PhilHealth. In the course of this inquiry, it seems that we had opened a can of worms when we stumbled upon the case of B. Braun Avitum Dialysis Center, Inc.

It started with the release of IRM funds amounting to P45.17M to the firm’s five branches in record speed. Nguni’t hindi diyan natatapos ang alamat ng B Braun Avitum. Narinig natin noong nakaraang linggo ang misteryosong kaso ng P9.7 million na pambayad sa claims ng B. Braun branch sa Region II na sa hindi maipaliwanag na kadahilanan ay naideposito sa Balanga Rural Bank sa Bataan na nasa Region III.

And just last weekend, we got hold of a document showing the inconsistencies in the claims of six branches of – guess what, Mr. President – B. Braun Avitum again. The data set was culled from PhilHealth’s own tracking system called MIDAS, or Machine Learning Identification, Detection and Analysis System, which suggested that the deviation in their regression models tells us the possible presence of ghost dialysis patients, if not ghost dialysis machines.

For the period 2015 to 2018 alone, Mr. President, umabot na sa P811M ang nasingil ng B. Braun Avitum mula sa PhilHealth. But that is just half of the story. In 2018 ang isang QC branch ng B Braun Avitum ay umabot hanggang 133.78% ang sessions to capacity ratio ng kanilang 15 dialysis machines, samantalang 90% lang dapat ang threshold capacity or 72 sessions per month ayon sa PhilHealth. Ang ibig sabihin nito, may imposibleng dialysis sessions na umaabot sa 4,378.

Now I dare ask – is this another case of ‘WellMed dialysis scam’ in the making?

Balik po tayo sa usaping IRM Mr. President. Kasalukuyang binibilang namin kung ilan lahat ang pribadong HCIs tulad ng B Braun Avitum na walang kinalaman sa fortuitous event na siya lamang awtorisadong gastusan under the PhilHealth law as amended sa ilalim ng IRM mechanism. Uulitin ko lang po. Mula’t sapul na pinairal ang IRM noon pang taong 2013, para lamang sa “displaced communities and communities in environmentally endangerd areas” ang saklaw nito sa ilalim ng umiiral na batas.

You may ask, Mr. President, why are we accounting for the number of these cases? Ang sagot, para malaman natin kung ano ang bilang ng mga kasong mairerekomendang maisampa laban sa mga kinauukulan.

Mr. Chairman and President of the Senate, I thought I should read a provision and its subsequent amendment under RA 10951. Article 217, Chapter 4, Book 2 of Act 3815 or the RPC provides:

“MALVERSATION OF PUBLIC FUNDS OR PROPERTY. Art. 217. Malversation of public funds or property; Presumption of malversation — Any public officer who, by reason of the duties of his office, is accountable for public funds or property, shall appropriate the same or shall take or misappropriate or shall consent, through abandonment or negligence, shall permit any other person to take such public funds, or property, wholly or partially, or shall otherwise be guilty of the misappropriation or malversation of such funds or property, shall suffer” – I will now quote from the latest amendment of Art 217 of the Penal Code, which is Sec 40, RA 10951 – It says, “If the amount exceeds P8.8 million, the penalty shall be reclusion perpetua.”

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special disqualification and a fine equal to the amount of the funds malversed or equal to the total value of the property embezzled.”

Mr. Limsiaco, and probably PCEO Morales, I am sorry to say, being accountable officers of PhilHealth – bukod pa sa usapin ng pag-misappropriate ng kaban ng PhilHealth para bayaran ang withholding tax na maliwanag pa sa sikat ng araw ay kasong Malversation of Public Funds or Property under Article 217, Chapter 4, Book II of Act 3815, at iba pang kaso ng violations of the National Internal Revenue Code and Anti-Graft and Corrupt Practices Act or RA 3019; kapag isinama pati ang mga binayaran ninyo na private dialysis centers, maternity care providers at infirmaries na walang kinalaman sa COVID-19 na siyang sakop ng IRM, malamang maliligo kayo ng kaso kapag ibinahagi na ni SP Tito Sotto Kay DOJ Secretary Menardo Guevarra ang lahat na records ng proceedings ng pagdinig na sinasagawa namin ngayon. Batid na po natin na ang Task Force na pinangungunahan ni Sec. Guevarra ay inatasan ng Pangulo na mag-imbestiga ng mga katiwalian sa PhilHealth upang sampahan ng kaukulang kaso ang mga sangkot sa karumal-dumal na gawaing pinaguusapan natin ngayon at sampu ng ating mga kababayan ngayong panahon pa man din ng pandemya na hindi man lang ninyo pinatawad.

Kaya huwag ninyo asahan na papatawarin kayo ng sambayanang Pilipino. Thank you Mr. President.

*****

HIGHLIGHTS FROM THE HEARING:

Sen. Lacson questioned DOH Secretary Francisco Duque III and PhilHealth officials on various issues, including:

* Coverage of PhilHealth Circular 2020-0007 allegedly covering even non-COVID cases

* Special treatment to B. Braun Avitum Dialysis Center Inc.

* Why PhilHealth paid P9 million for its MIDAS system, which was developed by an employee using company time

* Regional Offices having no say in listing IRM beneficiary HCIs

* Near-detention for IT officials Jovy Aragona and Calixto Gabuya Jr.

IRM Circular for COVID-19 Cases: Illegal Releases for 3 Months?

At the hearing, Sen. Lacson got Sec. Duque to admit that PhilHealth Circular 2020-0007, which provides IRM funds for HCIs handling COVID cases, does NOT include dialysis facilities, including B. Braun Avitum Dialysis Center.

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Sen. Lacson: “Regular benefit claim ang sabi nyo na di tatama sa Circular na pinalabas sa fortuitous event. Sabihin natin sa COVID, ang dialysis, hindi natin inaalis na tulungan din pero sa ibang programa, di sa (Circular 2020-)0007.” Sec. Duque replied, “Tama kayo. We will rectify this.”

Also, Sen. Lacson cited a provision in Circular 2020-0007 indicating it will take effect upon publication in a newspaper of general circulation and three certified true copies are furnished the Office of National Administrative Register (ONAR) of the UP Law Center. Data from ONAR showed it was filed June 11. “So IRM Circular 2020-0007, hindi ito effective until June 11,” Sen. Lacson said.

“Ang tanong, ilan na na-disburse nyo advance payment between March 21 or 1 day after March 20 when it was signed by Gen Morales; and June 10, a day before it took effect? Marami na di ba?” he said. As of June 9, Philhealth had already released P14.038 billion.

Sen. Lacson asked SVP Rodolfo del Rosario Jr.: “What do you make of that? Lahat na releases, wala pa effectivity ng circular, lahat yan illegal? Is that a correct statement?” Del Rosario replied: “It did not satisfy the requirement of the circular.”

***

What’s So Special About B. Braun Avitum Dialysis Center Inc.?

Sen. Lacson asked what is so special about B. Braun Avitum Dialysis Center Inc., that it got P811 million from PhilHealth from 2015 to 2018; and P45 million in IRM for COVID-19 funds. “Yet nobody from PhilHealth, not one of them, seems to know, sino may-ari ng Avitum. Even SEC does not know. It has no record. You are releasing hundreds of millions of pesos to a firm you don’t even know.”

Sen. Lacson also questioned Fund Management Sector Senior Vice President Renato Limsiaco, Jr. why he sent a memo dated June 28, 2019, to the Land Bank’s treasury department “prioritizing” the payment through check in favor of B. Braun, before issuing a demand letter to Balanga Rural Bank. “Pinababayaran mo muna B Braun tapos saka lang mag-issue ng demand letter. What’s so special about B Braun?

Wala man lang personal follow-up ito, puro letter? Ibang ospital kumahog maningil sa inyo, di pa mabayaran; B Braun you never met them?” “Ang release ng pera, from Central Office diretso sa Balanga, di dumaan sa PRO 2.”

Sen. Lacson also scored Limsiaco for claiming to know something about B. Braun only now, whereas he claimed to know nothing about it before. “Malapit na kayo humarap sa DOJ. Maliligo kayo ng kaso rito. For every count of illegal disbursement, malversation and more than P8.8M, harap nyo reclusion perpetua.”

***

MIDAS Program:

Sen. Lacson questioned why PhilHealth still paid P9 million for its anti-fraud program MIDAS (Machine Learning Identification, Detection and Analysis System), which was developed by a company employee using company time. PhilHealth RVP in Davao City Dennis Adre said the developer based in Davao was designated to develop a local utility program. In 2018, then president Roy Ferrer “reassigned him to the central office.”

“Ang ginamit na pag-develop, PhilHealth time. Empleyado siya ng PhilHealth. At ginamit kung meron man, pondo ng PhilHealth… Tama ba yan? Legal ba yan? Matuwid ba yan?” Sen. Lacson remarked.

When Adre replied it is not legal since “it was developed in Davao and is the intellectual property of PhilHealth,” Sen. Lacson asked: “Bakit babayaran ng PhilHealth?”

***

Regional Offices Having No Say on IRM Beneficiaries:

Region 8 RVP Michael Jibson Hernandez said he was instructed by AVP Walter Bacareza to start engaging with hospitals regarding the IRM. He noted that even without the appropriate circular, Bacareza “told me start accepting the documents.” “Siyempre insistent, gusto ni AVP Bacareza gusto niya Region 8 unang maka-release ng IRM.”

Ang list was pre-identified na binigay sa amin. Nakasaad sa circular, accredited or not, as long as may license to operate,” he added. When asked what role they had in preparing the list, Hernandez said, “ang role lang namin dito, tanggapin ang hospital na nagsa-submit, may letter of intent at MOA. Yan lang role namin. Wala kaming discretion sino piliin namin mag-avail o hindi. Basta willing mag-avail ng IRM, we’ll accept and endorse to central office.”

For Region 6, RVP Valerie Hollero said she wrote to Dr. Pargas about the effectivity of the circular but did not immediately get an answer. She said they submitted the first batch of recommendees, but “wala kaming makuhang listahan sa central office sino pwede at magkano pwede sa kanila.” She added: “Walang na-download sa Region 6 na list. Kaya nagbabalik-balik ang papel namin dahil kami nagcompute based sa circular.”

***

Near-Detention for Aragona, Gabuya:

Sen. Lacson gave Limsiaco, Aragona, Gabuya and even Labe to redeem themselves when he told them to admit they did not tell the truth even when under oath.

Mr. President I move to cite in contempt of this committee Ms. Aragona and Mr. Gabuya for continuously evading and lying before this committee,” Sen. Lacson said when Aragona and Gabuya initially insisted they did not lie.

After the two admitted they “did not tell the truth,” Sen. Lacson said: “I am withdrawing my motion in the spirit of COVID 19.”

*****

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