PhilHealth's Filthy Secrets: "Office Nightclub," "Mafia," + More

A mafia is running PhilHealth and all positions must be abolished to save it from ruin, according to the head of the Senate's anti-graft panel. Those behind corruption in the state-run insurer should be investigated for plunder, the committee said Tuesday.

Allegations of graft amounting to billions of pesos have cast questions on the viability of PhilHealth, especially at a time when millions of Filipinos under COVID-19 quarantine see it as a financial lifeline. The insurer said pandemic benefits would continue, while President Rodrigo Duterte said those behind graft would be jailed.

Narrating what the Blue Ribbon Committee uncovered about the mafia, its chairman, Sen. Richard Gordon, said a party was held in honor of one of its members, in which a woman clad in her underwear "danced and gyrated provocatively" while the crowd cheered as if they were in a nightclub.

PhilHealth generates budget in three ways: member contributions, its share of the national budget, and its share of tobacco and liquor taxes. In this, the "greedy, avaricious, evil guys" see a "gold mine ripe and ready to mine," according to an executive summary of the report.

While the abolition of all positions in PhilHealth is underway, all regional directors must be removed in the interim, the report said. "This way, all may be replaced by fresh faces, fresh minds, and untainted personnel," Gordon added.

"The government cannot afford to lose PhilHealth, that's why we have gone investigating and investigating. This is a case of a prodigal child who keeps on erring, and who keeps hurting us; but we still accept back nonetheless, because it is our child. But this cannot go on forever, patience is never infinite," the report said.

PhilHealth said it had yet to secure a copy of the Blue Ribbon report. "The agency maintains its firm belief that after all these investigations, those innocent of any wrongdoing will be exonerated while those at fault will suffer the full force of the law," it said on Twitter.

Who Is the Mafia?

The mafia, also known as the Mindanao Group, is composed of regional directors, some of whom have been in their positions for two decades thanks to political connections, the report said.

It named at least three former PhilHealth presidents—Eduardo Banzon, Celestina Ma. Jude Dela Serna, and Roy Ferrer—who all lost their jobs due to pressure and intrigue sown by the group, the committee said.

"You may have a competent, professional and highly credentialed CEOs but if they are not backed up, they leave the management of the corporation. They leave government service tired, burnt-out, and disillusioned," the report said.

The report uncovered overpayments using by misdeclaring the severity of the disease and those involving the so-called Z Benefit for the poorest of the poor.

In Samar, the Borongan Doctors Hospital has 40 beds but its billings to PhilHealth amounted to P50.16 million in one year. In Eastern Samar, the 20-bed Oras Doctors Hospital, collected P43.42 million, the report said.

Once anomalies are detected, overpricing moves from one disease to another, and call it a "favorite disease," according to the report. The scheme moved from claims for cataract operations, to caesarian delivery, to penumonia, it said.

Among the more famous anomalies in PhilHealth, dialysis costs were charged for patients who don't exist. The report also noted this.

The report also claimed a syndicate went off with P144 million in unremitted PhilHealth contributions of 22,000 employees of BPO firm Accenture.