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Task force flags negligence, concealment of documents by PhilHealth execs

Executives of the Philippine Health Insurance Corp. (PhilHealth) were negligent in their duties in connection with the state insurer's interim reimbursement program, certain procurements, and accountability mechanisms, investigators revealed on Tuesday.

The Department of Justice-led task force ordered by President Rodrigo Duterte to investigate alleged corruption in PhilHealth has bared the key findings behind its recommendation to file criminal and administrative complaints against resigned PhilHealth chief Ricardo Morales and several other officials.

Task Force PhilHealth found irregularities in the three areas it focused its investigation on: the approval and implementation of the Interim Reimbursement Mechanism (IRM), the approval of budgets for the purchase of ICT equipment, and corporate policies that fail to hold accountable erring PhilHealth personnel and health care institutions (HCI) and professionals.

The task force concluded that “persons who are supposed to set the policies and operational guidelines for the management of PhilHealth – the Board of Directors and the Executive Committee – have not shown the due diligence required of them in the discharge of their duties," the DOJ said in a statement.


For one, the task force found that IRM fund releases were "rushed" even before its implementing circular took effect and without monitoring mechanisms and tax withholding. It also said the IRM was implemented without "sufficient standards and guidelines," making it prone to abuse.

The IRM grants financial assistance to health care providers as a "special privilege" when "fortuitous events" would arise. It was set up in 2009 and reintroduced in 2014 and 2017 to help HCIs whose facilities were damaged by calamities, the DOJ said.

ICT equipment

In addition, the DOJ said the task force found that PhilHealth executives "purposely withheld" important information or audit documents to get board approval on budget requests to buy certain ICT equipment.

In one case, the DOJ said there was a P730-million budget request that was not included in PhilHealth's Information Strategic Plan, as required by law.

It added that an internal audit report that bared "major discrepancies or inconsistencies in the inventory of the corporation’s hardware and software" was likewise not presented to the board.

The board also approved a proposal to buy network switches for PhilHealth's National Capital Region office despite the Commission on Audit's finding that 24 similar switches were still unused, the DOJ said.

Policies for wrongdoing

Finally, the task force flagged what it said was PhilHealth's policy of settling claims "without accountability," DOJ said.

It said PhilHealth has also granted "wholesale amnesty" to HCIs' with claims that were no longer enforceable against the state insurer.

The DOJ also said the task force found anomalies in the settlement of cases, saying that it spotted "fictitious crediting of remittances" where contributions were diverted to either private or undisclosed accounts.

In these cases, PhilHealth did not file a criminal complaint against those involved as it should have, the department said.

And in at least six occasions, PhilHealth did not implement suspensions against HCIs that were already upheld by the Court of Appeals or the Supreme Court and instead changed the penalty to the payment of fines, the DOJ said,

The state insurer also withheld suspension and did not pursue legal action in exchange for the payment of fines by the HCIs in at least 20 instances, the DOJ said.


Issues on the IRM and on the procurement of ICT equipment, among others, also came up in previous hearings by lawmakers, in which senators and House representatives publicly questioned PhilHealth officials over alleged anomalies.

The task force recommended graft charges against Morales, Executive Vice President and Chief Operating Officer Arnel De Jesus, Senior Vice Presidents Jovita Aragona, Renato Limsiaco, Jr., and Israel Francis Pargas; Officer-in-Charge Calixto Gabuya, Jr., and Division Chief Bobby Crisostomo.

The task force also recommended administrative charges against them for dishonesty, gross neglect of duty, grave misconduct, and conduct prejudicial to the best interest of the service.

Duterte has approved these recommendations.

The DOJ declined to release a copy of the full report, saying it contains information on still ongoing investigations.

Justice Undersecretary Markk Perete said the task force merely conducted a fact-finding investigation, and that prosecutors will still have to "independently and objectively" evaluate the evidence when complaints are filed.

PhilHealth side

In a series of tweets, PhilHealth said it has yet to receive a copy of the report that task force submitted to the President.

Still, it vowed to "fully submit to the good judgment of and to whatever instructions that the President will issue based on the findings and recommendations contained therein."

It also reiterated its "unwavering commitment to truth and justice" and pinned its hope on the report to "guide the proper authorities in pursuing those who had been culpable of wrongdoing and exonerate those that are innocent."

"The whole of PhilHealth will continue to cooperate with the subsequent investigations to be conducted by the Task Force’s composite teams as well as by the other authorized agencies for the sake of truth and transparency," PhilHealth said. KBK, GMA News