PhilHealth execs misspent, stole P15 billion, says resigned anti-fraud official

The former anti-fraud officer of the Philippine Health Insurance Corporation (PhilHealth), Thorrsson Montes Keith, told senators on Tuesday, August 4, that executives of the embattled agency may have pocketed around P15 billion through fraudulent schemes.  

"Naniniwala po ako na ang perang winaldas at ninakaw ay humigit kumulang P15 billion," said Keith during the Senate hearing on the state insurer's alleged corruption. (I believe that the money they misspent and stole amounted to more or less P15 billion.)

Keith said he testified in the Senate hearing to expose what he called the "crime of the year" in PhilHealth.

The fraudulent schemes are run by "syndicates," he added.

He was referring to the implementation of the Interim Reimbursement Mechanism (IRM) and the procurement of “overpriced” information technology equipment.

"Ang akin pong natuklasan sa PhilHealth ay matatawag na krimen ng taon dahilan sa pag sindikato sa pamimigay ng cash advance – ang Interim Reimbursement Mechanism, at pag overpriced at pa ulit-ulit na pagbili ng IT equipment," said Keith.

(What I found out in PhilHealth can be called crime of the year because of the syndicated disbursement of cash advance – Interim Reimbursement Mechanism, and repeatedly purchasing overpriced IT equipment.)

IRM was PhilHealth’s cash advance program to provide hospitals with emergency fund to respond to unanticipated events like natural disasters and calamities.

Senate Minority Leader Franklin Drilon, said during the hearing: "We are in this mess because of PhilHealth’s non-compliance with rules, including a simple COA (Commission on Audit) rules."

Drilon was referring to the COA rule that no additional cash advances shall be allowed to any official or employee unless the previous cash advance is first settled or accounted for.

"Per COA rules, you must first liquidate before further advances be made," Drilon reminded PhilHealth when he learned that the state insurer released about P15 billion to the hospitals through IRM even if only P1 billion was liquidated.

"Even the name Interim Reimbursement Mechanism is a misnomer because this is not a system of reimbursement but an advance – one with very weak liquidation procedure," Drilon said.

"Naniniwala po ako na ang dahilan kung bakit hindi natatapos ang korapsiyon sa PhilHealth at naging kultura na po nito ay ang pagtatalaga ng mga sindikato o mafia ng kanilang kasamahan, kasabwat, o kapwa-sindikato sa mga matataas na posisyon na nakakatulong sa kanilang ilegal na operasyon," Keith said. 

(I believe the reason why corruption in PhilHealth won't end and has become a culture, is due to continuous appointment of mafia syndicates, which helps prolong illegal operations.)

In a text message to Rappler, Morales said he doesn't "know how/where he [Keith] got that (information)."

During the hearing, PhilHealth board member Alejandro Cabading identified 4 of his colleagues as alleged members of the so-called PhilHealth mafia. 

  • Senior Vice President (SVP) for legal sector Rodolfo del Rosario
  • SVP for Management Services Sector Dennis Mas
  • SVP for Fund Management Sector Renato Limsiaco
  • PhilHealth Board of Directors Corporate Secretary Jonathan Mangaoang

Del Rosario denied that he is part of the mafia. 

“I deny that I’m a member of any syndicate in this corporation. We have been fighting against corruption and against people who are actually committing grave abuses in this corporation,” Del Rosario said. 

Overpriced COVID-19 testing kits

During Tuesday's Senate hearing, Keith also said that Morales ordered him to "massage" the issue on supposedly overpriced COVID-19 testing kits.

Commenting earlier on Keith's statement, Morales told Rappler in a text message that the incident the resigned PhilHealth officer recalled during the Senate happened before the investigation by the Presidential Anti-Corruption Commission. Morales added, "In my view it was a simple misunderstanding."

The PhilHealth chief was in the same Senate hearing Tuesday with Keith.

In a Senate hearing in May, Senate Minority Leader Franklin Drilon grilled Morales over the state insurer's supposed "overpriced" P8,150 testing package for COVID-19. Two weeks later, PhilHealth released a new COVID-19 testing package. It was scaled down to P3,409 from P8,150.

Aside from what he described as "widespread corruption," Keith said that the other reasons for his resignation were that "his salary has not been on time and it started when I investigated officers in PhilHealth" and the "unfairness in the promotion process. "

He also strongly opposed the mandatory payment of PhilHealth contribution by overseas Filipino workers.

Morales has since denied the corruption allegations. (READ: PhilHealth defends reimbursement scheme, official in corruption allegations) – Rappler.com

Bonz Magsambol

Bonz Magsambol is a multimedia reporter for Rappler, covering health, education, and social welfare. He first joined Rappler as a social media producer in 2016.

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