COA seeks DOH action on P1-B PhilHealth claims
The Commission on Audit (COA) has called on the Department of Health (DOH) to address more than P1 billion in claims from the Philippine Health Insurance Corp. (PhilHealth) that have affected the financial stability of hospitals, including the rightful compensation of health-care workers.
In its annual audit report on the DOH for 2024, the COA said 12 DOH-retained hospitals encountered difficulties in ensuring the accuracy and collectability of denied and return-to-hospital (RTH) claims from PhilHealth amounting to P786.6 million and P298.7 million, respectively, due to “persistent non-compliance” with the processing guidelines set by the state health insurer.
Of the 13 hospitals, five are from Metro Manila, namely the Las Piñas General Hospital and Satellite Trauma Center, National Children’s Hospital, National Center for Mental Health, Rizal Medical Center (RizalMed), and San Lorenzo Ruiz General Hospital.
The other hospitals outside the National Capital Region are Ilocos Sur Medical Center, Mariano Marcos Memorial Hospital and Medical Center (MMMHMC), Cagayan Valley Medical Center, Cebu South Medical Center, Labuan General Hospital, Mayor Hilarion A. Ramiro Sr. Medical Center, and Cotabato Sanitarium and General Hospital.
Of these hospitals, RizalMed had the highest denied PhilHealth claims amounting to P345 million, followed by the MMMHMC with P225 million.
For RTH claims, the Las Piñas General Hospital had the highest among hospitals at P102.2 million, followed by RizalMed with P72.89 million.
Causes of denial
Auditors observed that a combination of interrelated factors led to the denied and RTH claims, including inadequate proper monitoring and reconciliation efforts between PhilHealth and the hospitals, especially those concerning older claims.
There was also an absence of essential supporting documentation due to reliance on manual filing systems prior to the implementation of electronic claims, as well as the “widespread non-compliance” with the PhilHealth guidelines such as violations of the Single Period Confinement Policy.
The other causes are delayed filing of claims beyond the prescribed statutory period; frequent submission of incomplete, improperly filled out or inconsistent documentation; internal processing lapses such as illegible doctors’ handwriting; delayed submission of patient charts and insufficient personnel training; understaffing in hospital billing departments; lack of adequate technological resources such as computers and reliable internet connectivity, and system-related issues such as malfunctioning internal systems, “coupled with the absence of a clear strategy to resolve unreconciled balances.”
“The persistent deficiencies have far-reaching implications, affecting both the financial stability and operational efficiency of hospitals,” the auditors said.
Considering the “large volume” of denied claims among hospitals, this represents a “substantial loss” of income funds that would have been vital to support hospital operations, including maintenance and operating expenses, upgrading of facilities and improving health-care services, they said.
“Furthermore, this also deprives health-care workers of their rightful compensation for these claims,” they added.
Risk to hospitals
As for the unresolved RTH claims, these present a risk of “escalating into further income losses if compliance requirements are not addressed promptly.”
“The accumulation of uncollected or disputed receivables places considerable strain on hospital cash flow, intensifying financial pressures and jeopardizing the continuity of essential services,” the auditors warned.
The financial instability resulting from the unresolved claims would also hinder the hospitals’ ability to meet critical operational demands, from hospital staffing to procurement of medical supplies, they pointed out.
State auditors explained that since denied claims cannot be recovered from PhilHealth member-patients, hospitals would then have to carry the financial burden, which could compromise their efficiency, drain their resources and create certain administrative bottlenecks “that further disrupt service delivery.”
Recommendation
Auditors recommended that the health secretary constitute a committee to review all denied and RTH claims against PhilHealth, a panel that should be composed of area heads of the Universal Health Care-Health Services Cluster (UHC-HSC) and directors of the Center for Health Development.
It will be tasked to review all denied and RTH claims and have to recommend to the health secretary the courses of actions required to resolve the identified issues and deficiencies.
Formal engagements with PhilHealth must also be conducted to ascertain the current status of the hospital’s outstanding receivables and to explore whatever actionable measures can be done to expedite the processing and collection of all claims.
