PhilHealth claims all costs under case rates system in 2019 were incorrectly paid

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The Philippine Health Insurance Corporation (PhilHealth) revealed that 100 percent of hospital costs in 2019 covered by its contested case rate system have either been underpaid or overpaid. (FILE PHOTO)

Metro Manila (CNN Philippines, August 12) — The Philippine Health Insurance Corporation (PhilHealth) revealed that 100 percent of hospital costs in 2019 covered by its contested case rate system have either been underpaid or overpaid.

PhilHealth's case rate system means the payment for claims or costs for treating particular diseases, such as pneumonia, is fixed. In other words, if the illness is pneumonia, regardless of how much the patient accumulates in expenses for treatment, PhilHealth will only pay a fixed rate for it.

Israel Pargas, PhilHealth's senior vice president for the health financial policy sector, explained that overpayment means PhilHealth paid more than the actual cost based on the fixed rate, while underpayment means the agency paid less.

"For the overpayment in 2019, we have around 22%. For the underpayment... it is around 78 percent," said the PhilHealth vice president during a House Good Government and Public Accountability hearing on alleged corruption in the state-owned health insurer.

The overpaid amount is equivalent to P3 billion while the underpaid is P120 billion, Pargas later elaborated.

Marikina 2nd District Rep. Stella Quimbo said this means zero cases were computed correctly and the hospital either lost or gained profit from the system.

Pargas assured there is still a no-billing policy which means even if the claim is underpaid, the patient would not have to shoulder the remaining costs of the treatment.

However, Quimbo, who is also a health economist, countered, saying the burden will lie on the hospital to make up for the loss from the underpaid claims.

She also said that private hospitals do not have the no-billing policy, allowing them to ask patients to pay the balance. She argued that if the patient cannot pay, this becomes an "incentive" for hospitals to resort to fraudulent means to compensate for the losses.

"Kung 78% of the time lugi siya hindi ba maghahanap siya ng paraan para habulin 'yung kita?" she said. "And kapag ang hina ng control sa fraud ng PhilHealth, dito tayo nagkakaroon ng problema."

[Translation: If 78 percent of the time they incurred loss, won't they find ways to reach the profit? And if PhilHealth's control on fraud is weak, this is where we have a problem.]

The insurer's case rate packages have been a hot topic in previous Congress hearings as lawmakers pointed out that it could be the "root of corruption" due to "upcasing" or upgrading diagnoses of illnesses for patients to receive benefits.

BH Party-list Rep. Bernadette Herrera-Dy cited an instance where her cousin was allegedly asked to declare that he or she had COVID-19 despite not yet having a test result.

Pargas said claims usually undergo pre-payment review and medical post-audit, but he also acknowledged that there is still upcasing in facilities.

"I think it is still happening that's why there are still cases being heard and investigated right now by the corporation, 'yung tinatawag na [what we call] upcasing," said the agency's official.

Indisposed officials

Pargas answered most of the questions during the House hearing as PhilHealth's three top officials - Ricardo Morales, president and CEO; Arnel De Jesus, executive vice president and COO; and Rodolfo Del Rosario, senior vice president for the legal sector - were unavailable, citing health issues.

Morales and De Jesus stepped out during the probe while De Jesus was in the hospital, Pargas said.

Committee Chairman Mike Defensor said the committee will write show cause letters to the officials to ask for an explanation for their disappearance during the hearing.

Morales and De Jesus had earlier notified the Senate of their ailments, which allowed them to attend the sessions virtually.