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PhilHealth declares: No overpayment in payments; scores one-sided story June 10, 2019

The Philippine Health Insurance Corporation (PhilHealth) clarified that the alleged 'overpayments' made in its claims amounting to P154 billion in the past six years are "efficiency gains," a feature in the case rates payment system that the agency is implementing.

It also allows PhilHealth to effectively impose the No Balance Billing (NBB) policy for sponsored program members admitted in ward or ward-type accommodations in government health care institutions. The state agency is currently paying its health care providers using case rates, a fixed amount that covers both hospital and professional charges.

Surge in pneumonia cases

The report has alleged that PhilHealth's increasing payments for pneumonia from 2010 to 2018 have reached "epidemic proportions" when there was no outbreak of pneumonia declared by the Department of Health.

PhilHealth pointed out that data reports of DOH are figures based on public health units/ facilities, while PhilHealth's claims statistics are based on actual payments of claims made to its health care providers. So both figures cannot be compared.

In the particular case of pneumonia, figures are based on those that have actually sought treatment for the ailment in both private and government hospitals nationwide.

No review of ACR, upcasing

Contrary to the report, the case rates have been revised, following a study that saw the need to adjust the rates accordingly. For instance in 2017, PhilHealth came out with new costings for pneumonia. It also adjusted the rates for its hemodialysis payments from P4,000 to P2,600 per session to properly compensate dialysis centers. PhilHealth has also expanded coverage from 45 to 90 sessions in a year.

"Our partners are even clamoring to increase our case rates because they find them paltry and measly. What should concern us is the tendency of a few unscrupulous providers to defraud the government, particularly in the case of upcasing, ghost patients and fabrication of claims," Dr. Roy B. Ferrer, PhilHealth Acting President and CEO pointed out.

"The heart of the issue now lies in these cases of fraud," he added, reiterating that PhilHealth's intensified drive against fraud and abuse in and outside of PhilHealth is gaining momentum, and so these pernicious practices that sap PhilHealth's fund will soon be a thing of the past. The funds stolen by these violators could have been otherwise utilized to expand the benefits or increase its payments to really needy patients. The problem the reporter might be alluding to is the practice of some health providers to pad their claims and therefore collect higher reimbursements. "This practice is called ‘upcasing'. In the case of pneumonia, a facility can ‘upcase' a simple cough or cold by inventing a false claim for pneumonia. So they collect higher reimbursable amounts from P15,000 to P32,000," the PhilHealth chief said, adding this is "criminal!"

Dr. Ferrer noted that the newspaper reporter's sources quoted a 2014 Audit Observation Memorandum of the Commission on Audit (COA) for Northern Mindanao, which reported that PhilHealth overpaid by 20 percent in all cases it processed. It could have been better if the reporter updated his figures, which should be a good policy in reporting.

"As fully explained by one of our senior officers in the same report, the case rates are so designed such that facilities can "win some and lose some." If these facilities are efficient in patient management, they would be able to save on costs and gain from the reimbursements process to offset those losses when they fail to contain costs in other patients.

"This is also applicable to public hospitals which bear the rest of the costs under the No Balance Billing policy," Ferrer further explained. "In cases where they gain, these should not be considered overpayments, because the bundled payments are provided for by law".

Campaign versus fraud

The article also claimed that of the P154 billion, PhilHealth lost some P51.2 billion due to fraud between 2013 and 2018, even using an estimate of 10 percent being a global standard in measuring extent of fraud in health insurance payments.

"The article is only half of the story. It must be remembered that there is no health insurance system in the entire world that is fraud-free," explained Dr. Ferrer, "and the ‘ten percent' standard is applied when no efforts are exerted by the insurer to correct leakages. That may be true with some insurers, but I dare that this is not the case with PhilHealth," Ferrer emphasized.

Fraud control measures and reforms were instituted to curb fraud. Investigations were intensified, and the regions conducted spot checking of health care providers. Benefit payment reforms to deter fraud were also set up. These cover pre-authorization of cataract operations and Z Benefit claims, implementation of PhilHealth dialysis database, validation of multiple claims and validation of deceased patients, and implementation of Claim Form 4.

There is more. It includes medical pre-payment review and the establishment of MIDAS or the Machine Learning Identification, Detection and Analysis System to detect over utilization, and system enhancements to detect common patterns of fraud.

Processing fraudulent cases

Dr. Ferrer disclosed that 1,251 counts of Pneumonia cases from 162 providers are being preliminary investigated at the Prosecution Department of PhilHealth. To emphasize that all these cases have not escaped close monitoring, PhilHealth, within the first quarter of 2019, has already decided on 34 cases against 14 facilities and professionals. PhilHealth is also currently hearing 4,419 cases more made up of recently received cases, carry-over cases and reopened cases for further proceedings. "We are leaving no stone unturned," Ferrer declared.

As of April this year, PhilHealth also reported that it has already completed 1,432 investigations and is currently investigating close to 9,000 more reports of fraudulent activities. It was noted that the highest number of cases are coming from regions 4A,10, and 11.

Without any basis, the article doubted the ability of PhilHealth to manage the P257 billion of UHC funds. "This is baseless skepticism," said the PhilHealth Chief. He, however, explained that the entire amount of P257 billion includes those allocated for DOH for its service delivery, governance and regulation functions – so the fund is not entirely for PhilHealth alone. PhilHealth's competence in handling funds entrusted to it is proven by its profitability: PhilHealth's net income of P11.6 billion at the end of 2018 has demonstrated fully well the Agency's good financial management. Unfortunately, there are people of "little faith."

On a positive note, Dr. Ferrer cited the "new vigilance and the newfound militancy of our people to watch over the fund of PhilHealth." This is a welcome development, the PhilHealth Chief emphasized. If there is genuine public expressing concerns over misuse of insurance claims, and not invented ones to promote someone's political ambition, this alertness augurs well for a citizenry that shares a protective response to possible misuse and abuse of the funds.

"This is a blessing in disguise," Dr. Ferrer said. "We can now move forward with our resolute anti-fraud campaign with an awakened citizenry squarely behind us," he declared. The PhilHealth chief said he is "issuing a stern warning to those who choose to be our adversary and to be enemies of the state: Their deception, stealing and lying will be exposed. The truth will prevail."

In a sense, he said, "we thank the two whistleblowers who exposed the scam, if these exposes were well-meaning. We expect to see more of citizen's vigilance against those who commit fraud, from inside the walls of PhilHealth and from the outside. In either case, they will be caught lying, deceiving and stealing."

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PhilHealth declares: No overpayment in payments; scores one-sided story