PIDS study calls for tighter PhilHealth fraud controls
As the Universal Health Care (UHC) law reshapes hospital payments, a new study is calling for an overhaul of the fraud controls of the Philippine Health Insurance Corp. (PhilHealth), warning that reliance on reactive measures leaves the system vulnerable to provider abuse.
State-run think tank Philippine Institute for Development Studies (PIDS) says that shifting PhilHealth’s fraud control mechanisms from a reactive to a proactive approach is key to ensuring “affordable, acceptable, available and accessible” quality health care for Filipinos.
“PhilHealth must develop a strategic plan to broaden the definition of fraud, strengthen fraud prevention mechanisms and deter providers from gaming the system,” PIDS says in its latest discussion paper.
It adds that this plan should include a thorough assessment of existing fraud control mechanisms and strategies to address both policy and implementation gaps.
“To carry this out, PhilHealth should expand the current scope of fraud to include other potential fraudulent practices that occur within the continuum of care, as well as those that can emerge as the system transitions to a (global budget) setup.”
Further, boosting investments in human and information technology resources is seen as key to strengthening PhilHealth’s fraud detection and prevention capabilities.
“PhilHealth should hire and train additional technical personnel who will implement antifraud reforms to ensure that these innovations are fully utilized by end-users,” PIDS says.
Lastly, PIDS outlines three fraud control strategies to address provider fraud.
“Prevention strategies strengthen the health insurance system to limit opportunities for fraud; Detection strategies identify fraudulent claims to avoid undue payments; and Deterrence strategies establish penalties or sanctions to discourage fraud,” the think tank says.
Fraud practices
This call comes against the backdrop of PIDS’ findings that the health insurer’s current fraud controls do not flag all potential fraudulent activities.
In turn, this can lead to inefficient use of government resources and divert funds away from marginalized sectors.
“PhilHealth lacks an overarching fraud control strategy across prevention, detection and deterrence mechanisms, leading to a focus on reactive detection measures that take effect only after health care is provided or claims have been filed,” PIDS explains.
As it is, PIDS says this weak system underestimates the true incidence of health insurance fraud in the country.
Health-care providers typically commit fraud in ways that inflate payments, which means they can receive higher reimbursements.
This involves upcoding diagnoses or assigning a procedure code, unbundling procedures, providing unnecessary services or extending patient confinement.
Back in 2014, for instance, multiple health facilities submitted claims for unnecessary or low-quality cataract procedures totaling P3.7 billion. Other cases included reporting minor respiratory symptoms as pneumonia or COVID-19 and submitting dialysis claims for ghost patients.
With UHC, PhilHealth will shift to a global budget system, giving hospitals a fixed, front-loaded budget for patient care. This leaves the state insurer even more vulnerable to fraud.
“Undetected fraud can inflate the hospital GB at the expense of paying for necessary health care services that were actually rendered,” PIDS says.
“Thus, PhilHealth must anticipate and mitigate provider incentives to increase the number of admissions or upcode patient clinical complexity to receive a higher global budget,” it adds.
