PhilHealth exec quits amid Senate graft probe

A TOP Philippine Health Insurance Corp. (PhilHealth) official quit his job on Thursday, even as he vowed to cooperate with lawmakers’ corruption probe of the state-run insurance agency.

Vice-President for Operations Augustus de Villa did not say in his resignation letter why he quit. “Be assured that I will make myself available for the ongoing investigations in aid of legislation in both Houses of Congress,” he added.

Mr. De Villa, a retired military officer, said he had briefed PhilHealth President and Chief Executive Officer Ricardo Morales earlier in the day about his resignation.

Former PhilHealth anti-fraud legal officer Thorsson Keith this week told senators at a hearing the agency’s top officials had pocketed P15 billion through fraudulent programs.

He said the sum came from overpriced equipment the agency had bought, as well as from a program that gave financial aid to health facilities amid a coronavirus pandemic. Mr. Keith called PhilHealth executive committee officers in-house mafia members.

PhilHealth on Thursday denied the allegations. “His malicious claims not substantiated by evidence were obviously made to malign officers that rejected his ambitions for higher offices which he is not qualified for,” it said in a statement.

Mr. Keith told senators he had submitted to Mr. De Villa documents showing that the agency was planning to spend P4.81 million for 15 network switches, even if the market price was less than a million pesos.

Mr. De Villa supposedly tore the papers out of frustration, but he corrected Mr. Keith and told senators he had kept the documents.

Senate President Vicente C. Sotto III noted that despite PhilHealth’s denial, the chamber would wait for the pieces of evidence.

“They can deny all they want, let’s wait for the evidence,” he said in a mobile phone message.

He also said Mr. De Villa must have a “very good reason for resigning in the midst of the controversy.”

Senator Panfilo M. Lacson said the committee had gathered enough evidence to prove PhilHealth had bought overpriced items and favored some beneficiaries.

“Let the documents speak for themselves,” he told the ABS-CBN News Channel. “We have the documents to prove that there was gross overpricing and favoritism in the disbursement of interim reimbursement mechanism funds,” he added.

The mechanism allowed the agency to grant advance payments to health institutions by up to three months during the pandemic, even if only P1 billion had been liquidated.

He also said Mr. Keith was expected to provide at the next hearing a breakdown of the P15 billion allegedly lost to corruption.

The Senate has issued a subpoena for the documents in Mr. De Villa’s possession. It will hold another hearing on Aug. 11.

“Resigned or not, General De Villa is under a legal order to present it to the committee at the next hearing,” Mr. Lacson said.

“I can only hope that he will be part of an advocacy group within PhilHealth and contribute in exposing shenanigans based on his personal knowledge,” he added.

At Tuesday’s Senate hearing, former PhilHealth board member Alejandro L. Cabading said he had repeatedly flagged questionable budgetary items for the IT department, including a P2.1-billion budget proposal without details.

Mr. Morales said the P2.1 billion was meant to improve the agency’s problem with insurance fraud, adding that it had lost P10.2 billion to fraud out of P136 billion in total benefit payments last year.

Meanwhile, President Rodrigo R. Duterte’s anti-corruption commission said its cases against 36 PhilHealth officials linked to fraud were airtight.

The officials could face criminal and administrative complaints at the Office of the Ombudsman, Presidential Anti-Corruption Commissioner Greco Belgica told the ABS-CBN News Channel.

The PACC had submitted a partial report to the Office of the President and was organizing an investigation team per region, he said.

“Mafia is really an abused word,” Mr. Belgica said. “There’s no one big mafia in PhilHealth but rather many groups in the regions.”

He said most PhilHealth transactions happen at the regional level, noting that corruption persists even after Mr. Duterte fired the entire board in August last year.

Mr. Belgica also said PhilHealth’s national office had whitewashed complaints against regional officials.

The state insurance agency had lost at least P154 billion due to overpayments, he said, citing a Commission on Audit report in 2013. It loses part of the P2 billion in monthly payment claims to corruption, he added.

Nerissa R. Santiago, a PhilHealth senior vice-president, had told senators the agency might collapse by 2022 if the COVID-19 pandemic continues and it fails to get more subsidies from the government.

She said PhilHealth would no longer have any reserve funds by 2021, as contributions declined and benefit payouts rose amid the health crisis.

PhilHealth is expected to suffer a net operating loss of P90 billion this year and P147 billion in 2021, she said.
But Senator Ralph G. Recto rejected Ms. Santiago’s claims, noting that contributions are mandatory. He said taxes imposed on various products such as sugar-sweetened beverages and alcohol are earmarked for PhilHealth. — Charmaine A. Tadalan