COA: PhilHealth's P89.9-B unutilized funds could have been used to expand benefits | ABS-CBN
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COA: PhilHealth's P89.9-B unutilized funds could have been used to expand benefits
COA: PhilHealth's P89.9-B unutilized funds could have been used to expand benefits
PhilHealth file photo by Maria Tan, ABS-CBN News
PhilHealth file photo by Maria Tan, ABS-CBN NewsMANILA — The Commission on Audit said the P89.9 billion unutilized funds of the Philippine Health Insurance Corporation (PhilHealth) could have been used to provide members adequate and additional benefit coverage.
MANILA — The Commission on Audit said the P89.9 billion unutilized funds of the Philippine Health Insurance Corporation (PhilHealth) could have been used to provide members adequate and additional benefit coverage.
In its annual audit report, the COA said the utilization of such funds will contribute to PhilHealth fulfilling the objective of the Republic Act No. 11223 or the Universal Health Care Act, which is to ensure Filipinos equitable access to quality and affordable healthcare.
In its annual audit report, the COA said the utilization of such funds will contribute to PhilHealth fulfilling the objective of the Republic Act No. 11223 or the Universal Health Care Act, which is to ensure Filipinos equitable access to quality and affordable healthcare.
"The Audit Team opined that the unutilized portion of the subsidies from NG [national government] could have been used by PhilHealth to significantly expand its benefit programs provided specifically for indirect contributors such as Senior Citizens (SCs), Persons with Disability (PWDs), marginalized members of the society included in NHTS [National Household Targeting System for Poverty Reduction], and others," the report read.
"The Audit Team opined that the unutilized portion of the subsidies from NG [national government] could have been used by PhilHealth to significantly expand its benefit programs provided specifically for indirect contributors such as Senior Citizens (SCs), Persons with Disability (PWDs), marginalized members of the society included in NHTS [National Household Targeting System for Poverty Reduction], and others," the report read.
The Department of Finance in February issued Circular No. 003-2024, directing government-owned and controlled corporations (GOCC) like the state-run health insurer to remit idle, unused, and excess funds to the Bureau of Treasury.
The Department of Finance in February issued Circular No. 003-2024, directing government-owned and controlled corporations (GOCC) like the state-run health insurer to remit idle, unused, and excess funds to the Bureau of Treasury.
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The P89.9 billion unused subsidies of PhilHealth will be used to fund unprogrammed appropriations in the 2024 budget.
The P89.9 billion unused subsidies of PhilHealth will be used to fund unprogrammed appropriations in the 2024 budget.
Finance Secretary Ralph Recto earlier defended the move, which he said is a mandate under Republic Act No. 11975 or the General Appropriations Act (GAA).
Finance Secretary Ralph Recto earlier defended the move, which he said is a mandate under Republic Act No. 11975 or the General Appropriations Act (GAA).
Several groups filed petitions before the Supreme Court seeking to block the transfer and instead use the funds to expand the benefits of PhilHealth members.
Several groups filed petitions before the Supreme Court seeking to block the transfer and instead use the funds to expand the benefits of PhilHealth members.
PhilHealth said it has transferred P30 billion, while another P30 billion was set to be remitted in October and the remaining P29.9 billion in November.
PhilHealth said it has transferred P30 billion, while another P30 billion was set to be remitted in October and the remaining P29.9 billion in November.
In October, the SC issued a temporary restraining order "to enjoin the further transfer of PhilHealth funds to the National Treasury."
In October, the SC issued a temporary restraining order "to enjoin the further transfer of PhilHealth funds to the National Treasury."
Earlier this week, the high court delayed the oral arguments on the controversial transfer from January 14, 2025, to February 4, 2025.
Earlier this week, the high court delayed the oral arguments on the controversial transfer from January 14, 2025, to February 4, 2025.
No specific reason was given for the rescheduling of the oral arguments.
No specific reason was given for the rescheduling of the oral arguments.
State auditors said the management of the PhilHealth Reserve Fund "did not comply with the Universal Healthcare Act" due to the following factors:
State auditors said the management of the PhilHealth Reserve Fund "did not comply with the Universal Healthcare Act" due to the following factors:
- Investment of funds without considering actuarially estimated two-year projected program expenditures
- Investment of funds without considering actuarially estimated two-year projected program expenditures
- Delayed and minimal expansion of benefit programs and partial utilization of subsidies from the National Government (NG) resulting in the planned return of P89.9 billion unutilized funds to the Bureau of Treasury (BTr), thus depriving the members of adequate and additional benefit coverage
- Delayed and minimal expansion of benefit programs and partial utilization of subsidies from the National Government (NG) resulting in the planned return of P89.9 billion unutilized funds to the Bureau of Treasury (BTr), thus depriving the members of adequate and additional benefit coverage
COA also recommended to PhilHealth to prioritize projected program expenditures for the next two years before investing the unused portion of the reserve fund.
COA also recommended to PhilHealth to prioritize projected program expenditures for the next two years before investing the unused portion of the reserve fund.
It also told the state-run health insurer to revise or amend issuances to ensure the investment of an unused portion of the reserve fund happens only after the prioritization and expansion of benefit programs or a decrease in premium contributions.
It also told the state-run health insurer to revise or amend issuances to ensure the investment of an unused portion of the reserve fund happens only after the prioritization and expansion of benefit programs or a decrease in premium contributions.
COA likewise suggested that PhilHealth prioritize and speed up the expansion of benefit programs by "effectively and efficiently utilizing" the unused portion of the Reserve Fund and subsidies received from the government.
COA likewise suggested that PhilHealth prioritize and speed up the expansion of benefit programs by "effectively and efficiently utilizing" the unused portion of the Reserve Fund and subsidies received from the government.
EXPANSION ON MEMBERS' CONTRIBUTIONS?
The audit team conducted verification if PhilHealth was actively expanding benefit programs or decreasing the amount of members' contributions.
The audit team conducted verification if PhilHealth was actively expanding benefit programs or decreasing the amount of members' contributions.
"Confirmation with Management revealed that the decreasing the amount of members' contributions was not considered due to the progressive premium collection scheme provided in Section 10 of the UHC Act, hence, limiting Management's ability to reduce the premium contributions from members," it said.
"Confirmation with Management revealed that the decreasing the amount of members' contributions was not considered due to the progressive premium collection scheme provided in Section 10 of the UHC Act, hence, limiting Management's ability to reduce the premium contributions from members," it said.
Despite this, COA said PhilHealth is "still required to expand members' benefits" to fully use any unused portion of the Reserve Fund.
Despite this, COA said PhilHealth is "still required to expand members' benefits" to fully use any unused portion of the Reserve Fund.
It cited the UHC Act which states that "for every increase in the rate contribution of direct contributors and premium subsidy of indirect contributors, PhilHealth shall provide for a corresponding increase in benefits, subject to financial sustainability."
It cited the UHC Act which states that "for every increase in the rate contribution of direct contributors and premium subsidy of indirect contributors, PhilHealth shall provide for a corresponding increase in benefits, subject to financial sustainability."
COA found most issued circulars were regarding increases in benefit packages associated with COVID-19 programs and revisions of old and existing packages. The only new package implemented in 2023 was the Outpatient Benefits Package for Mental Health.
COA found most issued circulars were regarding increases in benefit packages associated with COVID-19 programs and revisions of old and existing packages. The only new package implemented in 2023 was the Outpatient Benefits Package for Mental Health.
"The data showed nil amount in benefit claims paid during CY 2023, considering that there is a rising epidemic of mental health crises in the country according to the Philippine Mental Health Association, Inc," the audit team found upon checking implementation and information dissemination with certain PhilHealth regional offices.
"The data showed nil amount in benefit claims paid during CY 2023, considering that there is a rising epidemic of mental health crises in the country according to the Philippine Mental Health Association, Inc," the audit team found upon checking implementation and information dissemination with certain PhilHealth regional offices.
PhilHealth said the effectivity date of the package could have affected the nil amount of payment of benefit claims for 2023.
PhilHealth said the effectivity date of the package could have affected the nil amount of payment of benefit claims for 2023.
"Payments could still be in process since PhilHealth allows a 120-day period for the Healthcare Facilities to file the benefit claim and a 60-day TAT for PhilHealth to process the same claim. Further, another factor as mentioned by Management is that there are still no contracted facilities to accommodate such benefit packages," PhilHealth added.
"Payments could still be in process since PhilHealth allows a 120-day period for the Healthcare Facilities to file the benefit claim and a 60-day TAT for PhilHealth to process the same claim. Further, another factor as mentioned by Management is that there are still no contracted facilities to accommodate such benefit packages," PhilHealth added.
COA said the cash flow analysis showed that PhilHealth was not prioritizing the expansion of its benefits programs to achieve its mandate.
COA said the cash flow analysis showed that PhilHealth was not prioritizing the expansion of its benefits programs to achieve its mandate.
Payment of benefit claims amounted to P127.036 billion, less than half of the cash paid for investing activities at P274.241 billion in 2023.
Payment of benefit claims amounted to P127.036 billion, less than half of the cash paid for investing activities at P274.241 billion in 2023.
"Considering the increase in members' contributions since 2019, an increase in payment of benefit claims is expected in compliance with Section 10 of the UHC Act. However, as seen in Table 60, there was a noted decrease in payment of benefit claims, with PhilHealth spending P118.90 billion for benefit claims payment for CY 2023, which is less than the P130.560 billion paid in CY 2022," the COA said.
"Considering the increase in members' contributions since 2019, an increase in payment of benefit claims is expected in compliance with Section 10 of the UHC Act. However, as seen in Table 60, there was a noted decrease in payment of benefit claims, with PhilHealth spending P118.90 billion for benefit claims payment for CY 2023, which is less than the P130.560 billion paid in CY 2022," the COA said.
In response, PhilHealth said the "delayed and minimal expansion of the benefit programs" can be attributed to the meager utilization of some of the benefit packages of PhilHealth such as Konsulta.
In response, PhilHealth said the "delayed and minimal expansion of the benefit programs" can be attributed to the meager utilization of some of the benefit packages of PhilHealth such as Konsulta.
"Despite the increasing numbers of accredited Konsulta providers, the volume of members' availments remains minimal. Management also added that there were enhancements in benefit packages still in the pipeline, with implementation deferred in the ensuing year," it explained.
"Despite the increasing numbers of accredited Konsulta providers, the volume of members' availments remains minimal. Management also added that there were enhancements in benefit packages still in the pipeline, with implementation deferred in the ensuing year," it explained.
PhilHealth also attributed the decrease in payment of benefit claims to the cybersecurity incident on September 22, 2023.
PhilHealth also attributed the decrease in payment of benefit claims to the cybersecurity incident on September 22, 2023.
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