FIFTEENTH CONGRESS OF THl;: 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B.No. 1396 
Introduce,d by Senator Loren Legarda 
EXPLANATORY NOTE 
Ii) 
Health facilities have emerged and developed in a variety of forms and 
structures. As a result, a number of such types of facilities no longer qualify under 
the current regulatory mandate of the Department of Health (DOH) through the 
Bureau of Health Facilities and Services (BHFS). In other words, the mandate that 
subjects such types of facilities under the regulatory control of the Department is 
now outdated. 
The new world order has opened up countries to a new level of competition. 
Trade borders are slowly disappearing alongside global development. This 
phenomenon has led industries, such as in the field of health facilities maintenance 
and health service provision, to grow, expand and evolve. 
Consequently, the 
regulation of this field should aiso be enhanced to respond to such changes as it 
greatly affects the welfare of the people. Health regulations should be transformed 
in order to: 
a. Maintain its relevance; and, 
b. Expand its scope of authority and include the whole industry as well. 
. 
For years, the regulation of health facilities focused on the specific activities 
and objects that need to be regulated. This proposed measure introduces a paradigm 
shift from the traditional way of regulation by regulating the industry as opposed to 
mere regulation of individual and specific health facilities. As such, there shall be 
fewer opportunities for circumvention and the health cost becomes controlled. In 
addition, with this measure, the quality of health facilities and services shall 
improve as well as the competitiveness, efficiency and productivity of the industry. 
Through this bill, critical infrastructure and technical upgrading is provided 
to enable the DOH to cope with the challenges of globalization. Thus, aside from 
competitiveness, the high quality of health facilities and services are ensured. The 
creation of a Health Facilities Regulation Fund, which would be a new and 
innovative way of creating and disbursing resources in pursuit of a revitalized 
regulatory mandate, will facilitate access, productivity and efficiency. The creation 
and management of a system of benchmarking system would definitely improve 
quality and efficiency in health regulation and ensure accessibility with respect to 
necessary health facilities especially to the poor. 
The bill also addresses another pressing issue in the field of health care, 
which is the increaSing cost of health services. The increasing cost of health care, 
particularly hospital care, is a reality recognized by both the government and other 
stakeholders in the health sector. Because of the dichotomous health system and the 


way the health system is organized in terms of health financing and health delivery, 
there is a lack of government control on the costs of health services being provided 
by the private health sector. This leads to escalating costs of health services, which 
erodes value of social health insurance in providing financial risk protection to the 
population. By regulating the costs of health services in health facilities especially 
through a strengthened Bureau of Health Facilities and Services, these services will 
be made more accessible financially to the population, especially those who belong 
to the lowest income group. 
In essence, this bill would bring about improved mandate and available 
financial resources towards efficient and effective health regulation. 
Support for the passage and approval of this bill is thus earnestly sought. 
~~? 
Senator 
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FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
·SENATE 
S.B.No. 1396 
. ' 
Introduced by Senator Loren Legarda 
. , . 
AN ACT ENHANCING THE REGULATION OF HEALTH FACILITIES AND 
APPROPRIATING FUNDS THEREOF. 
Be it enacted by the Senate and House of House of Representatives of the Philippines 
in Congress assembled: 
SECTION 1. Title. - This Act shall be known as "The Health Facilities 
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Regulation Act of 2010". 
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SEC 2. Declaration of Policy. - Article XIII, Section 11 of the 1987 Philippine 
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Constitution stipulates, among ot~ers that: "The State shall adopt an integrated and 
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comprehensive approach to health development which shall endeavor to make 
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essential goods, health and other social services available to all the people at 
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affordable cost." Towards this end, it is the policy of the State to ensure the quality, 
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safety, accessibility and affordability of health services and health facilities for each 
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and every Filipino especially the poor. To attain these goals, the Department of 
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Health, through the Bureau of Health Facilities and Services, must be provided the 
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mandate and capability to regulate health facilities as they develop in time. Thus, to 
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actualize this endeavor, the State shall enhance its regulatory capacity, capability, 
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efficiency and coherence in order to regulate not only the health facilities but the 
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industries that provide them as well. 
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SEC 3. Objectives - This Act shall adhere to the following objectives: 
(a) 
To enhance the administrative and technical capacity of government in 
health regulation; 
(b) 
To strengthen the government regulatory control powers in implementing 
health regulations; 
(c) 
To expand government's regulatory coverage over health facilities, and 
include the industries that provide them; and, 
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mean: 
(d) 
To provide coherence in the government's regulatory processes. 
SEC 4. Definition of Terms. - As used in this Act, the following terms shall 
(a) 
BFAD refers to the Bureau of Food and Drug; 
(b) 
BHDT refers to the Bureau of Health Devices and Technology; 
(c) 
BHFS refers to the Bureau of Health Facilities and Services; 
(d) BOQ refers to the Bureau of Quarantine; 
(e) . BUREAU refers to the Bureau of Health Facilities and Services; 
(f) 
CHD refers to Center for Health Development of the Department of 
Health in different regions of the country tasked to implement 
regulatory functions therein; 
(g) 
COA refers to the Commission on Audit; 
(h) DOH refers to the D~partment of Health; 
(i) 
DFA refers to the Department of Foreign Affairs; 
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PHIC refers to the Philippine Health Insurance Corporation; 
(k) 
POEA refers to the Philippine Overseas Employment Administration; 
and 
(I) 
HEALTH FACILITIES refer to institutions that provide diagnostic, 
therapeutic, rehabilitative and other health care services. 
SEC 5. Health Facilities Regulation Structure. - The DOH, through the 
BHFS, has the primary role of regulating health facilities to ensure safety, quality, 
access and affordability thereof: Provided, that the CHDs shall be primarily tasked to 
enforce regulatory activities in their respective regions. 
SEC 6. Powers and Functions. - The DOH, through the BHFS shall have the 
following general powers and functions: 
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(a) 
Prescribe measures to rationalize the establishment of health facilities all 
over the country in accordance with national health goals; 
(b) 
Prescribe 
measures 
to 
regulate 
the 
establishment, 
operation, 
maintenance, and use of health facilities; 
(c) 
Formulate, enforce and periodically review rules and regulations on the 
regulation of health facilities duly approved by the Secretary of Health; 
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(d) Prescribe regulatory standards for health facilities and promulgate the 
necessary policy instruments and arrangements with other pertinent 
government agencies for the enforcement thereof; 
(e) 
Grant permits for the construction, renovation and expansion of health 
facilities; 
(f) 
Register, license, accredit or certify health facilities and suspend and 
revoke the license, accreditation or certification of the same in 
accordance with the provisions of this Act and its implementing rules 
and regulations; 
(g) 
Provide exemptions from registration, licensure, accreditation or 
certification with proper notice to the public; 
(h) 
Undertake inspections of health facilities to ensure compliance with this 
Act and its implementing rules and regulations; 
(i) 
Levy, assess and coll~ct appropriate fees pursuant to its functions; 
0) 
Publish an annual listing of all registered, licensed', accredited or 
certified health facilities; 
(k) 
Develop 
public-private 
partnerships towards quality assurance 
endeavors such as, but not limited to: 
(i) 
Voluntary accniditation processes and mechanisms; and, 
(ii) 
Adverse event reporting and monitoring; 
(1) 
Require all regulated health facilities to submit to the BHFS and CHDs 
any adverse event that caused or contributed to death, serious illness or 
serious injury to a patient; 
(m) Require all regulated health facilities to report notifiable diseases to the 
appropriate DOH office in accordance with national policies 
(n) 
Regulate and enforce standards on the management of health facility 
wastes; 
(0) 
Coordinate the regulation of health facilities with other government 
agencies involved directly or indirectly with health regulation; 
(p) Call on the assistance of any instrumentality of the government for the 
implementation of the provisions of this Act; and 
(q) 
Exercise such other powers and responsibilities that shall ultimately 
contribute to the better health status of the Filipino people as determined 
by the Secretary. 
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SEC 7. Validity of the Registration, License, Accreditation or Certification. -
The validity of the registration, license, accreditation or certification for health 
facilities and shall depend on the validity period to be prescribed by the BHFS. 
SEC. 8. Regulation of the Price of Health Care Services. - The President of the 
Philippines, upon recommendation of the Secretary of the Health, shall have the 
power to impose the maximum price over diagnostic, therapeutic, rehabilitative and 
other health care services rendered in health facilities. 
The power to impose maximum prices over health care servjces shall be 
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exercised within such period of time as the situation may warrant as determined by 
the President of the Philippines. No court, except the Supreme Court of the 
Philippines, shall issue any temporary restraining order or preliminary injunction or 
preliminary mandatory injunction that will prevent the immediate execution of the 
exercise of this power of the President of the Philippines. 
The DOH, together with the PHIC, in consultation with stakeholders, shall 
formulate the implementing rules and regulations for the provisions in Section 8 of 
this Act, within 120 days after the enactment of the same. 
SEC. 9. Regulation Capability Strengthening. - The DOH, through the BHFS, 
shall endeavor to strengthen its regulatory capabilities as well as those of the CHDs 
through process and systems reforms congruent with national health reforms such 
as, but not limited to, the establishment of a harmonized regulation system together 
with other DOH regulatory offices, namely, BFAD, BHDT and BOQ: Provided, that 
the CHDs shall enforce DOH regulatory mandates in the their respective regions. 
SEC. 10. Information Technology. - The DOH, through the BHFS, shall 
establish an information technology linkage with other health regulatory agencies 
within a year subsequent to the enactment of this Act. A web page dedicated to the 
compilation and maintenance of DOH regulation database shall be developed and 
maintained. 
SEC. 11. Quality Seal. - The DOH, through the BHFS, shall, in coordination 
with other DOH regulatory offices, implement a quality seals system for health 
facilities through the following activities: 
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(a) 
Adoption of quality standards that would enable international 
competitiveness whenever applicable; 
(b) 
Critical capacity building of the BHFS and CHDs; 
(c) 
Enhancement of all necessary regulatory infrastructure; and, 
(d) 
Development of necessary requirements, such as but not limited to, 
sets of criteria, incentive packages, and advocacy scheme. 
SEC 12. 
Cost Restructuring. - The DOH, through the BHFS, is hereby 
mandated to restructure its fee schedule to a level commensurate to the cost of 
regulatory administration; Provided, that no increase in fees shall be implemented 
without proper consultation with' necessary stakeholders. 
SEC 13. Health Facilities Regulation Fund. - A Health Facilities Regulation 
Fund is hereby established to institute an efficient, sustainable and cost-effective 
regulatory system for health, facilities through incentives in the form of 
disbursements to BHFS and CHDs based on performance and compliance to 
Sections 9, 10, 11 and 12 of this Act and based on the implementing rules and 
regulations to be formulated by the DOH and subject to COA rules and regulations; 
Provided, that the same fund shall also be used to upgrade the critical capacity and 
regulatory infrastructure of BHFS and CHDs; Provided further, that no amount 
thereof shall be used for payment of salaries and other allowances. 
The fund shall be held in trust and derived from all receipts from registration, 
licensing, accreditation and certification fees, sale of publications and services, 
assessment, fines, penalties and other fees imposed by the BHFS and the CHDs. This 
fund may be augmented by grants, donations, endowments from various domestic 
or foreign sources, as allowed under the Adminish'ative Code of 1987. 
SEC. 14. Benchmarks. -
A system of benchmarks setting shall be 
institutionalized to provide yearly accomplishment targets for the stipulations under 
Section 8, 9 and 10 of this Act, which shall be one of the bases for performance 
evaluation and disbursement of the Health Facilities Regulation Fund to the BHFS 
and the CHDs. 
SEC 15. Prohibited Acts. - The following are considered prohibited acts for 
purposes of this Act: 
(a) 
Operation and maintenance of a health facility without a license; 
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(b) 
Non-compliance with the standards and requirements on construction, 
operation and maintenance; 
(c) 
Refusal to allow required inspections as determined by the BHFS and 
CHDs and; 
(d) Misrepresentation and/ or falsifications in the submission of licensing/ 
renewal requirements; 
SEC 16. Administrative Proceedings and Sanctions. -
Upon verified 
information of the conduct of prohibited act/ s, the DOH, through the BHFS, shall 
conduct an administrative hearing with proper notices to determine the conduct of 
prohibited actions and the persons liable. 
In cases where there is finding of prohibited actions and determination of the 
persons liable, the DOH, through the BHFS and CHDs, are authorized to impose 
any or all of the following sanctions: 
( a) 
SuspenSion of license; 
(b) 
Revocation of license; 
(c) 
Closure of the health facility; 
(d) Administrative fine as prescribed by the DOH, which shaH be adjusted 
yearly based on the Consumer Price Index; 
(e) 
Filing of criminal charges against persons liable and; 
(f) 
Permanent disquali£i~ation from owning and operating health facilities. 
Review of all administrative decisions is lodged with the Secretary of Health 
subject to the rules and regulations of the Administrative Code of 1987. 
SEC 17. Penalties. - The commission of prohibited acts as described in this 
Act shall be punishable by imprisonment of not less than six months but not more 
than five years and/or a fine of not less than Five Hundred Thousand Pesos 
(PSOO,OOO.OO) but not more than One Million Pesos (Pl,OOO,OOO.OO). The fine shall be 
adjusted yearly based on the Consumer Price Index. 
SEC 18. Appropriations. - The current DOH appropriations under the 
General Appropriations Act (GAA) shall be used to carry out the initial 
implementation of this Act. Thereafter, subsequent appropriations for purposes of 
this Act shall be increasingly derived from the Health Regulation Fund, with 
augmentation from the GAA if the former is determined by the DOH to be 
insufficient. 
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SEC 19. Implementing Rules. - The Department of Health shall promulgate 
the implementing rules and guidelines of this Act one hundred twenty (120) days 
after the passage of the Act. 
SEC 20. Separability Clause. - If any part, section or provision of this Act is 
declared invalid or unconstitutio,nal, other parts or provisions hereof not affected 
thereby shall remain in full force and effect. 
SEC 21. Repealing Clause. - Republic Act No. 4226 and Republic Act No. 
4688 are hereby repealed. All other laws, decrees, executive orders, circulars, 
regulations and memoranda, or parts thereot, inconsistent with this Act are hereby 
repealed or amended accordingly. 
SEC 22. Effectivity. - This act shall take effect fifteen (15) days after 
publication in two (2) newspapers of general circulation. 
Approved, 
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