Commission on Audit

COA orders PH Heart Center to settle suppliers’ claims worth P20 million

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COA orders PH Heart Center to settle suppliers’ claims worth P20 million

HEART CENTER. The entrance of the Philippine Heart Center.

Philippine Heart Center Facebook page

State auditors say two suppliers are entitled to payments for delivering various medical supplies to the state-run hospital even without a formal consignment agreement

MANILA, Philippines – The Commission on Audit (COA) told the Philippine Heart Center (PHC) it should pay two suppliers a combined amount of more than P20 million for the services they rendered.

Separate decisions from the COA en banc said that even without a formal contract, Lifelink, Inc. and RG Meditron, Inc. are entitled to payments for delivering various medical supplies to PHC on a consignment basis.

Under the consignment scheme between Lifelink and PHC from 2017 to 2020, the private company sent items to the state-run hospital, which in turn sold the goods at a 10% markup. The arrangement was for PHC to remit the proceeds of the sale to Lifelink, minus the 10% margin.

In its petition, Lifelink said PHC did not remit the proceeds of the sale to Lifelink, even though the government facility sold products worth P10.27 million, based on sales invoices, delivery receipts, utilization reports, justifications and affidavit of merit signed by doctors.

Meditron, meanwhile, delivered vascular products and pacemakers to the hospital for standby use, from 2017 to 2021.

After a patient uses an item, the hospital notifies the supplier, which subsequently issues a sales invoice that is countersigned by the PHC. Meditron then issues a billing notice to PHC, requesting that the payment be released.

The company, however, said PHC did not settle its claims worth P9.936 million despite written demands.

In separate decisions, state auditors ruled that the state-run hospital is obligated to pay its suppliers.

The challenge in both cases is calculating the amount that the hospital owes the suppliers. This is because the money was co-mingled with the PHC’s General Fund, and not specified in a separate account book.

The COA, however, insisted that these roadblocks do not invalidate the consignors’ claim.

“Although the deliveries were not supported with a valid and existing [consignment agreement], this Commission finds that Meditron should be compensated for the delivered items utilized and paid for by PHC patients,” the first ruling read.

“To avoid unjust enrichment, Lifelink should be compensated based on the principle of quantum meruit,” the second resolution added.

The said principle – which means “as much as he deserves” – is applied in the absence of an express agreement on fees, according to the Supreme Court. This allows a person or an entity to recover a reasonable value of the thing he delivered or the service he rendered. –

1 comment

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  1. ET

    I appreciate COA’s action in ruling that the state-run hospital (Philippine Heart Center) is obligated to pay its suppliers. Why were there no “valid and existing [consignment agreement] contracts” between the PHC and its suppliers? Why did it take so long to settle this? Is there an official at the PHC who benefited from this?

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