Nasaan ang Kaluluwa ng mga Gumagawa Nito? Senate Hearing on Corruption at PhilHealth

August 4, 2020 - Sen. Lacson’s Opening Statement at the Senate Committee of the Whole Hearing on Corruption at PhilHealth: SP Sotto and I filed SRN 475, later co-authored by almost all the members of this present Senate, after a number of PhilHealth officials, both incumbent or recently resigned, sought our intervention to help them “drain the swamp,” as American politicians would love to say when they see the need to root out corruption.

And for good reason. PhilHealth is a murky, stinking swamp that many of its good and well-meaning people from the officials to their rank-and-file employees want drained, not just of some corrupt but well-entrenched officials who do not seem to run out of malevolent schemes to enrich themselves, but of a deeply rooted, mafia-like syndicate that controls the resources of the corporation, and habitually manipulate its financial records, that even the COA seems helpless in the conduct of their regular audit.

If we look closely enough, the story only revolves around the same cast of characters – a circle of high-ranking officials who manage to hog their seats despite the change of leadership and detailed anomalies that we already unearthed in the past.

Allow me to remind you, distinguished colleagues:

* Atty. Rodolfo “Jojo” del Rosarionow Senior Vice President of Legal Sector, had been involved in a myriad of issues: as the signatory in the obvious “conflict of interest” in the building lease contract between the Duque-owned Educational and Medical Development Corporation (EMDC) and PhilHealth for the latter’s office building in Region 1; likewise as the OIC of the IT Management Department when the multi-million PhilHealth premium contributions of Accenture, Inc. were allegedly plundered in 2012; and the two successive Zero Performance Ratings of the Governance Commission for GOCCs (GCG) in the Legal Sector.

* Dr. Israel “Ish” Fargas, the SVP for Health Finance Policy Sector; and Corporate Secretary Jonathan Mangaoang, who stirred the allegations of PhilHealth Board’s grave abuse of discretion by reversing the Court of Appeals’ final and executory judgment of Perpetual Succour Hospital’s three-month suspension and P10,000 fine.

Dr. Fargas also turned a blind eye to the notorious and untenable policy called All Case Rate or ACR Payment Scheme of PhilHealth which cost PhilHealth massive losses to overpayment and fraud.

* Mr. Dennis Mas, SVP for Management Services Sector, was charged by the Ombudsman for his involvement in the POEA fake receipt scam. Mr. Mas also deliberately failed to disclose the undesirable record of the five recently promoted PhilHealth personnel despite their involvement in big-time scams.

Just for the last five years, Mr. President – 2014 to 2018 – as the 2019 report is not yet available on the COA website, I would like to share with you, my distinguished colleagues, the following:

* As of December 31, 2018 – Disallowances: P6.64 Billion

* As of December 31, 2017 – Disallowances: P6.12 Billion

* As of December 31, 2016 – Disallowances: P5.08 Billion

* As of December 31, 2015 – Disallowances: P5.02 Billion

* As of December 31, 2014 – Disallowances: P3.98 Billion

Notice PhilHealth’s recurring pattern of violations of auditing rules in terms of suspensions, disallowances and charges. Today, even in the middle of a global pandemic, PhilHealth continues to face a train of anomalies, this time involving three major issues we are tackling today:

  1. PhilHealth’s overpriced ICT equipment;
  2. Manipulation of PhilHealth’s financial statements; and
  3. The highly irregular implementation of advanced payments to health care institutions through the Interim Reimbursement Mechanism policy, among other corrupt practices.

We dare ask: Why would maternity care package providers and freestanding dialysis centers which do not even cater to COVID-19 patients receive COVID-19 advance payments from PhilHealth? You can see P226M released to freestanding dialysis centers and P4.7M released to maternity care package providers.

To cite an example, five branches of a private freestanding dialysis center, Braun Avitum Dialysis Center Manila, recently received a total of P45,176,518 in a span of only a few days. Meanwhile, Ospital ng Maynila, a public hospital despite multiple appeals has yet to receive its PhilHealth fund reimbursement of a mere P19M.

Suffice it to say Mr. President, this is the reason why we are gathered here yet again to conduct this inquiry not only in aid of legislation, but more importantly in aid of the more than 104M members and dependents of PhilHealth, as well as all the taxpayers of this country.

A renowned American author, Henry David Thoreau, once wrote: There are a thousand hacking at the branches of evil to one who is striking at the root. That is why we are grateful to have people like former PhilHealth Board Member Alejandro Cabading, former HEA to the PhilHealth president Col. Etrobal Laborte; and former anti-fraud officer Atty. Thorrsson Keith, who are with us today, albeit virtually.

We vow to help them hack the branches, and most compellingly, strike the root of the evil that besets PhilHealth.

Thank you, Mr. President.

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POINTS FROM THE HEARING:

Sen. Lacson grilled PhilHealth officials on various issues including:

* Overpriced ICT equipment, anomalies in procurement

* Irregular implementation of the Interim Reimbursement Mechanism

* A circular allowing the “deferment of IRM liquidation activities”

* Doctoring of PhilHealth financial records and attempt to collect from OFWs

Overpriced ICT Equipment, Anomalies in Procurement:

Sen. Lacson questioned the PhilHealth’s bid to procure network switches with a contract price of P4.814 million, while the market price for the items is only P939,360 – a loss of P3.878 million for the government.

Before this, PhilHealth procured 24 network switches for P74.3 million, or a whopping P3.09 million per unit. The switches were found out to be unutilized, still inside their boxes, as stated by COA. “This is not the first time IT equipment procurement is fraught with anomaly.”


Sen. Lacson also questioned why PhilHealth still tried to procure 15 network switches when it still had unutilized units, still inside their boxes. “Hindi nyo nga nagamit, bakit bibili ng 15 units? Kasi malaki ang overprice?

“Ang tanong ko, very simple. Kung hindi nyo nagamit bakit kayo bibili ng iba pa? Bakit pa kayo magpo-procure?

Nasaan ang kaluluwa ng mga gumagawa nito? We cannot understand who would have the heart or conscience to procure such items.”


Sen. Lacson also said that while the Senate is willing to give PhilHealth the budget for subsidies in Bayanihan 2, the extent of overpricing in the agency is too much.

We are willing to give you the budget but show us ang procurement ninyo maayos… We were discussing with our colleagues how will we give you billions in subsidy sa Bayanihan 2, (pero) ang overprice nyo, grabe.”


Irregular Implementation of IRM

Sen. Lacson noted the release of P226M to freestanding dialysis centers and P4.7M to maternity care package providers. Five branches of a private freestanding dialysis center received P45,176,518 in just a few days.


In contrast, Ospital ng Maynila, a public hospital despite multiple appeals has yet to receive its PhilHealth fund reimbursement of a mere P19M. Despite PhilHealth officials’ claims OSMA had been paid in June, Sen. Lacson noted the OSMA made a follow-up to its request as recently as July 9.

Kaya nauubusan ang pera ng PhilHealth kung saan-saan nyo ginagastos. Sa favorite hospitals and HCIs. Ang iba ang tagal nila nag-a-apply nagre-request ng release ng pondo.”

Board member Susan Mercado noted that among the first to receive IRM funding from PhilHealth were hospitals in Region 8, where SVP for fund management Renato Limsiaco Jr. hails from. Mercado also affirmed Sen. Lacson’s point that the IRM funds were meant for COVID response. “Maraming doctors na namamatay in the line of duty sa mga hospitals na hindi agad napondohan habang nagpaulan ng pera sa unang nag pass your papers,” she said.

Meanwhile, Sen. Lacson questioned PhilHealth’s Circular 2020-032 dated June 16, 2020 to all area VPs, for the “deferment of IRM liquidation activities.”

Pinapayagan ninyong huwag mag-liquidate. Is this true? Ito ang nakasulat eh,” he said.

Doctoring of Financial Records, Attempts to Collect from OFWs

Sen. Lacson questioned PhilHealth’s yearly “adjustments” in its financial statements. “Year in, year out, meron kayong adjustment na ginagawa. Bino-bloat nyo ang income… nag-a-adjust kayo just to make it appear sound ang fiscal status ninyo.”

He also asked PhilHealth that if its financial situation were stable, why would it attempt to impose a fee from OFWs. “Kung lagi kayong in the blue, bakit naniningil pa kayo sa OFW? Bakit nakaisip pa kayo nag-attempt pa kayo kung di pinigilan ni Pangulong Duterte, how much were you projecting to collect from departing OFWs, something like P12B?”

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