Reforming PhilHealth: confrontation won’t help

RECENTLY, the president of the Private Hospitals Associations of the Philippines Inc. (PHAPI) threatened to deny patients the benefits from the Philippine Health Insurance Corp. (PhilHealth). Instead, Rustico Jimenez, the PHAPI president, said that the patients should directly get the reimbursements from PhilHealth. Dr. Jimenez alleged that PhilHealth’s reimbursements to private hospitals were delayed by as much as six months.

As mandated by the PhilHealth law, doctors and hospitals are obliged to deduct a set amount of their charges to PhilHealth-covered patients, which PhilHealth will reimburse within 60 days. According to Dr. Jimenez, as of May this year, purported backlogs in these insurance repayments to PHAPI’s hospital-members have reached P600 million. Dr. Jimenez accused PhilHealth’s leadership of “mismanagement.”

The threat, if made good, would paralyze the health system. This would bring untold suffering to PhilHealth members, many of whom are poor, now that the bulk of the incremental sin tax revenues has been earmarked to expand universal health coverage.

But the threat was meant mainly for propaganda and political purposes. For the State would have jailed Dr. Jimenez and the owners of private hospitals if they violated the law by not honoring the patients’ PhilHealth benefits.

Although the issue has died down, it does not mean it will not erupt again. Since we were part of the campaign that fought for the passage of the sin tax law, we want to underscore that we want PhilHealth to succeed. The sin tax law earmarks incremental revenues to fund PhilHeatlh coverage for the poor or indigent. We need to defend PhilHealth’s gains at the same time that we need to push for more reforms to make PhilHealth more efficient as well as more responsive to its members.

Let us recall Dr. Jimenez’s allegations. In a radio interview, he gave the example of 10 hospitals affected by a total of P70 million in reimbursement delays. PhilHealth has nevertheless shown through its media statements and advertisements that the allegations are inaccurate if not totally false.

Based on PhilHealth’s latest repayments data, we find the following:

Four out of the 10 hospitals mentioned by Dr. Jimenez actually had no significant backlog during the specified period. (These hospitals are San Juan de Dios in Pasay City, with a claimed backlog of P15 million; Western Visayas Medical Center, with a claimed backlog of P13 million, Ciudad Medical Zamboanga Hospital, with a claimed backlog of P6 million; and Virgen Milagrosa Hospital in San Carlos City).

Dr. Jimenez, speaking on behalf of the private hospitals, mentioned a government hospital, Western Visayas Medical Center. But the hospital had no significant backlog.

Dr, Jimenez also named a non-existent hospital: the De Vera Hospital in Bulacan.

One hospital, St. Camillus Hospital in Davao Oriental, requested advance payments, which the law prohibits.

One hospital, San Pablo Doctors Hospital, had several cases of denials or returns of claims approximating the alleged backlog amount (P4 million). These returned or denied claims were due to the incomplete submission of documents or data, the late filing of claims (beyond 60 days), or because the cases claimed did not warrant compensation as provided for by law.

The inaccuracies in Dr. Jimenez’s examples have dented his credibility — and sadly, through his words and behavior, he has brought disgrace to PHAPI.

Some politicians such as Senator Ralph Recto, thinking that Dr. Jimenez’s accusations would gain public sympathy, used the same accusations to lambast PhilHealth. To these politicians, a piece of advice: Investigate before you speak.

That said, we have to recognize that — and the PhilHealth leadership acknowledges this — the PhilHealth system needs an overhaul.

Take the reimbursement process, for instance. As far back as 2008, a report financed by the Asian Development Bank (ADB) and the German Technical Cooperation (GTZ), made this observation:

“Providers appreciate the reimbursement by PhilHealth but they are not satisfied because of late payments, unexplained deductions and refusals of submitted claims, cumulative policy measures and subsequent AO’s [Administrative Orders] and circulars of PhilHealth for which they don’t get much explanation and time to implement. An instituted and regular dialogue is missing that would go beyond mutual complaining about claims processing and instead focuses on improvement of services for the members and on improving business support systems and administrative procedures.”

That was in 2008. When the Aquino administration was installed, a new wave of reforms was set in motion, as demonstrated by the new PhilHealth law or the National Health Insurance Act of 2013.

PhilHealth has been able to settle the outstanding repayment claims of all partner-providers faster than the 60-day period mandated by law. Delays beyond 60 days are outliers, and they can be mainly attributed to “birthing pains.” It takes time for changes to happen, even as we urge PhilHealth to accelerate the pace of reforms.

The PhilHealth’s adoption of computerization and information technology will result in quicker verification of claims (in real time, in fact) and this means immediate reimbursements. Also, the case-based payment system that PhilHealth began implementing in January 2014 simplifies the process, leading to quicker reimbursements.

The case-based payment is a uniform rate for the provision of quality health care, whether the patient is admitted to a private or public hospital. Among other things, the system of paying a fixed amount to health-care providers reduces the abuse in claims and, correspondingly, enhances efficiency and shortens the turnaround time for reimbursements.

Before, PhilHealth had a “fee for service provider” payment mechanism, which was prone to abuse, leading to extended hospital stays and overuse of unnecessary procedures or services.

While we appeal to PhilHealth to accelerate the processing of reimbursement claims of its partner-providers, we urge the entire health sector to support PhilHealth’s transition to a case-based payment system.

PhilHealth is now in the midst of a critical reform transition, which in the longer term will allow it to respond to the concerns of its beneficiaries and partner-providers with much greater effectiveness. We need to prepare for this and also collaborate with PhilHealth if we want to reap the full benefits of these reforms — and not take a confrontational stance such as what Dr. Jimenez did.

(The authors are members of the sin tax team of Action for Economic Reforms [www.aer.ph].)

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