FAST FACTS: What is PhilHealth’s Interim Reimbursement Mechanism?

Michelle Abad

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PhilHealth’s IRM, meant to disburse quick relief to medical facilities in times of disasters, is under fire for alleged corruption

The Philippine Health Insurance Corporation (PhilHealth) has been under fire following allegations of corruption, as a whistleblower said that around P15 billion may have been pocketed by executives through fraudulent schemes.

The program being disputed is PhilHealth’s Interim Reimbursement Mechanism (IRM), a program that allows the state health insurer to release funds to healthcare institutions (HCIs) in times of “fortuitous events” like natural disasters, insurgencies, and wars.

PhilHealth suspended the IRM on August 13 to “review its overall implementation and resolve issues arising from Congressional inquiries.”

What is the IRM?

The IRM is the program that handled emergency cash advances for medical facilities during this coronavirus pandemic, in line with its mandate to allow for quick funds during a disaster.

The program enables hospitals, primary care facilities, ambulatory surgical clinics, freestanding dialysis centers, and maternity care providers to continuously provide healthcare services to affected Filipinos. It supposedly cuts long queues and tedious bureaucratic processes.

According to PhilHealth, the IRM was first used for Super Typhoon Yolanda (Haiyan) in 2013. It was then used in the Marawi Siege in 2017, the Taal Volcano eruption in January 2020, and now the coronavirus pandemic.

In March, the coronavirus led President Rodrigo Duterte to put the Philippines in a state of calamity for 6 months.

How does it work?

While the program’s name calls to mind reimbursements, the IRM is actually a cash advance program.

The IRM is reserved for HCIs that apply for it. Applications are coursed through PhilHealth regional offices, area vice presidents, or directly to the office of the CEO. 

In deciding if the HCI will receive financial aid, the insurance corporation checks the track record of the facility in rendering healthcare services to PhilHealth members. PhilHealth then releases IRM funds after the CEO signs it.

IRM shares are computed based on the hospitals’ historical claim, or the average daily claim from the previous year multiplied by 90, which should approximate the amount the facilities would need for 3 months.

PhilHealth said they gave its regional offices flexibility in processing liquidations, considering the situation in hospitals during the pandemic.

HCIs can also request for additional IRM funds multiple times, provided they meet the following requirements:

  • Previously released IRM fund has been liquidated by at least 80%
  • HCI applicant has been assessed to be compliant with PhilHealth’s policies, especially with regard to using the IRM
  • HCI submits a request letter and other supporting documents justifying the need for additional funds
What are the issues?

Senators slammed “palakasan” or politicking in IRM releases, which PhilHealth denies.

The Southern Philippines Medical Center (SPMC) in Davao City received the biggest amount of compensation under the IRM program for treatment of coronavirus patients, with P326 million.

Second came the Philippine General Hospital (PGH) in Manila with P263.3 million.

According to the Department of Health, Metro Manila was the top region with the highest reported coronavirus cases. Davao region, meanwhile, came at number 6.

Senators questioned the system of “advanced reimbursements” in the IRM. PhilHealth easing liquidation requirements for HCIs during the pandemic led to just P1 billion being liquidated out of P14 billion in IRM funds released to HCIs as of June 9.

Senator Juan Miguel Zubiri pointed out that without the usual government requirements of “pre-audits” and “post-audits” before releasing lump sums, the system became prone to corruption.

On Monday, August 17, House committee on public accounts chair Mike Defensor questioned why PhilHealth was disbursing IRM funds to HCIs that were still facing fraud allegations. Citing data provided to him by PhilHealth, Defensor said the state health insurer distributed P1.49 billion of IRM funds to the 51 medical facilities.

PhilHealth has so far reported a total of 4,664 fraud cases from 2013 to the present. –

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Michelle Abad

Michelle Abad is a multimedia reporter at Rappler. She covers overseas Filipinos, the rights of women and children, and local governments.