COA: PhilHealth illegally released P291-M worth of hazard pay to employees

State insurer Philippine Health Insurance Corporation (PhilHealth) granted P291-million worth of hazard pay to its employees illegally, the Commission on Audit (COA) said.

In its 2019 annual audit report on PhilHealth, state auditors said that the amount —P236 million for regular employees and P55 million for casual employees—were distributed from 2016 to 2019 even if it is in violation of Republic Act 7305 or the Magna Carta for Public Health Workers (PHW), among other rules and regulations.

COA said that while the passage of the Universal Health Care law classified PhilHealth employees as health workers, their entitlement to benefits and allowances—including hazard pay enumerated under the magna carta—is not absolute since it is still subject to the law's pertinent provisions and regulations.

State auditors specifically cited Section 21 of the Magna Carta for PHW which states that all public health workers are eligible to receive hazard pay when the nature of their work exposes them to high risk/low risk hazards for at least 50% of their working hours as determined and approved by the Secretary of Health or his authorized representatives.

The law lists the hazards as:

• difficult locations;
• strife-torn or embattled areas;
• distressed and isolated stations;
• prison camps;
• mental hospitals;
• radiation exposed clinics;
• laboratories and disease-infested areas;
• areas declared under a state of calamity or emergency for the duration when there is exposure to danger, contagious disease, radiation, volcanic activity or eruption, occupational risks; and
• perils to life as determined by the Secretary of Health or the head of the unit with the approval of the Secretary of Health

“It is clear that only public health workers working in establishments specifically mentioned in Section 21 are entitled to receive hazard pay benefits.  As can be gleaned from the preceding provisions/requirements, PhilHealth employees, although considered as PHWs as contemplated under the UHC Law, should not be automatically entitled to receive hazard pay under RA No. 7305, as they fail to meet the primary condition on exposure to specific kinds of hazard,” COA said.

“Also, PhilHealth failed to show that the existence of exposure to such hazards was determined by the Secretary of Health or by the head of agency with the former's approval,” COA added.

State auditors also said that PhilHealth “appears to be non-compliant” with the implementing rules and regulations of the Magna Carta for PHWs which requires the submission of the list of positions in its plantilla with corresponding job description justifying such positions that are exposed to high or low risk hazard and review of such list by the DOH technical committee.

In response to COA’s findings, PhilHealth argued that its officers and employees are entitled to hazard pay since they are classified as PHWs under the Universal Health Care law and are exposed to occupational risks, perils to life, and physical hardships from its high-ranking officials to the lowly clerks.

Likewise, COA said PhilHealth presumed that since its corporate operating budget was approved by the PhilHealth board chaired by the Secretary of Health, the  review and approval on the determination of the risk of exposure on the nature of work of PHWs are no longer required.

COA, however, rejected PhilHealth’s justification.

“Since PhilHealth is not compliant with the relevant rules and regulations, payments of hazard pay from 2016 to 2019 in an aggregate amount of P291.932 million were deemed irregular and disallowable in audit,” COA said.

Likewise, COA said that PhilHealth was not compliant on the additional guidelines on the grant hazard pay under the 2016 Joint Circular issued by the Budget and Health department which lists the following as hazardous areas:

• patient wards, intensive care units, operating rooms, outpatient departments, and other medical departments where public health workers are in contact with patients with contagious and communicable diseases and handle hospital paraphernalia used by patients such as linen, food, utensils, bed pan, etc.;
• radiation-exposed areas such as laboratories and service workshops;
• chemical and medical laboratories;
• prison camps and institutions for mental health;
• drug abuse drop-in centers or rehabilitation centers;
• work areas where rescue operations/evacuations are carried out due to calamities and health emergencies;
• highly disease-infected and vector-infested areas;
• work areas involving handling and/or spraying of insecticides, molluscicides, pesticides and other hazardous chemicals;
• health-related establishments located in embattled or strife-torn areas as may be declared and certified by the Department of National Defense authorities concerned; among others

Moreover, state auditors admonished PhilHealth for repeatedly granting such hazard pay to its employees even if such payment has been the subject of disallowance from 2011 to 2015 for lack of legal basis.

“Despite the disallowance, PhilHealth has been continuously granting hazard pay since 2016,” COA pointed out.

COA made the following recommendations to PhilHealth:

• strictly adhere with the IRR of RA No. 7305 or the Magna Carta of PHWs and DBM-DOH JC No. 1, s. 2016, in the grant of hazard pay; and
• identify and determine the specific positions that are eligible to receive hazard pay with descriptions as to actual exposure to occupational risk/perils to life and submit the required list of personnel duly reviewed and approved by the Secretary of Health to the audit team for verification.

—LDF, GMA News