THIRTEENTH CONGRESS OF THE REPUBLIC 
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OF THE PHILIPPINES 
First Regular Session 
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S E N A T E  
s. No. 
Introduced by Senator S. R. Osmefia 111 
EXPLANATORY NOTE 
Article 2, Section I 5  of the Philippine Constitution states that “The State 
shall protect and promote the right to health of the people and instill health 
consciousness among them.” Furthermore, in Article 13 Section 2, it goes on to 
state that “The State shall adopt an integrated and comprehensive approach to 
health development which shall endeavor to make essential goods, health, and 
other social services available to all the people at affordable cost. There shall be 
priority for the needs of the underprivileged, sick, elderly, disabled, women and 
children. The State shall endeavor to provide free medical care to paupers.” 
In 1976, the Philippines had a total of 1,036 hospitals of which 366 were 
government and 670 privately run with a total bed capacity of 17.6 individuals for 
every 10,000 population. By 2001, this number had increased to 1,708 with 640 
being government and 1,068 from the private sector with a total bed capacity of 
only 10.2 people for every 10,000, an alarming decline of approximately 42% 
despite an increase in the number of hospitals. Furthermore, reported diseases 
ranging from cholera to rabies (e.9. cholera, typhoid, HlV, Dengue, Pneumonia, 
etc.) have increased from 2.8 million cases in 1988 to 3.4 million cases in 1998. 
It is in ‘the light of such deteriorating conditions as well as the 
governments’ duty to provide adequate health care for its people that this bill has 
been crafted. The statistics just mentioned imply a rapidly growing health care 
crisis that must immediately be addressed via the provision of greater medical 
services. 
Hence, it is with this in mind that the approval of this bill is earnestly 
sought. 
h-. 
SERGIO OSMENA I l l  
Senator 
/rlg 


THIRTEE~TH 
CONGRESS OF THE REPUBLIC 
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in time in 
OF THE PHILIPPINES 
First Regular Session 
government hospitals shall be afforded free hospitalization in any 
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a) 
S E N A T  
ndigent patient - refers to any Filipino citizen afflicted with any serious 
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Introduced by Senator s. R. Osrneiia 111 
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AN ACT 
ESTABLISHING 
A 
MEDICAL 
SERVICE 
CONTRACTING 
PARTICI~ATING HOSPITALS IN ORDER TO ACCOMMODATE 
INDIGE~T PATIENTS WHO 
CANNOT 
BE 
ADMITTED 
IN 
PROGRAM UNDER WHICH THE GOVERNMENT WILL SUBSIDIZE 
GOVERNMENT HOSPITALS 
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Be /t enacted by the Senate and the House of Representatives of the 
Philippine$ in Congress assembled: 
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TlON 1. Title, - This Act shall be known as the “Medical Service 
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Contractit& Act of 2004.” 
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SE TlON 2. 
Objective. - A Medical Service Contracting Program is 
hereby eslablished in order that indigent patients who cannot be accommodated 
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llness and/or injury needing immediate confinement and treatment in a 
bospital and whose income is below the subsistence level as 
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etermined by the National Economic and Development Authority and 
who are not covered by the existing PhilHealth Care Program of 
or its equivalent. If the amount of the hospital expenses is 
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k) Tertiary hospital - refers to a hospital which is fully departmentalized 
and equipped with the service capabilities needed to support certified 
medical specialists and other licensed physicians rendering services in 
the field of medicine, pediatrics, obstetrics and gynecology, surgery, 
their sub-specialties, and ancillary services 
SECTION 4. Duty of Government Hospital - It shall be the duty of the 
Administrator of every government hospital to refer an indigent patient 
immediately to the nearest participating private hospital whenever he or she 
cannot be accommodated in said hospital. However, in cases of emergency, the 
provisions on Republic Act 8644 shall apply. 
SECTION 5. 
Hospital Admissions and Expenses. - All participating 
private hospitals shall admit indigent patients referred to them by any 
government hospital. All necessary expenses for the treatment of the indigent 
patient shall be advanced by the participating hospital concerned, which shall, 
however, be reimbursed with reasonable or legal interest, by the Department, in 
accordance with government hospital rates, within four (4) weeks after 
notification of the discharge of the indigent patient. Failure by the Department to 
reimburse a participating hospital for a period of six (6) months shall be a 
sufficient cause for a participating hospital to withdraw from this Program. 
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However, if funds are available, the Department may agree to advance to the 
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participating private hospital such amount necessary to cover the services to be 
rendered to the indigent patient: Provided, however, that the participating private 
hospital shall submit quarterly accounting of the expenses previously incurred in 
the treatment of the patient. 
SECTION 6. Phases of Implementation. - This Program shall consist of 
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two phases: 
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The Program shall initially be implemented in the provinces 
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where there is lack of government hospitals and where secondary private 
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hospitals are found. 
The criteria for selecting these provinces shall be 
Phase I. 


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determined by the Secretary in accordance with the population-hospital bed ratio, 
morbidity status and socioeconomic condition. 
Phase II. 
Within three (3) years from the start of the Program, all 
provinces shall be covered by the program. 
SECTION 7. Funding. - The President is hereby authorized to realign or 
transfer any item of appropriation within the Department and/or utilize any 
savings therein to carry out the provisions of this Act. 
Whatever additional 
amount as may be needed for the implementation of this Act shall be included 
and given priority in the appropriation of the Department in the General 
Appropriations Act for the ensuing fiscal years. Provided, that the Philippine 
Charity Sweepstakes Office shall allocate the income of two (2) lotteries or 
sweepstakes draws for the Program. 
SECTION 8. Administration. - The Secretary shall administer the proper 
execution and implementation of this Program, draw such list of participating 
hospitals, submit to the Office of the President such necessary budgetary 
expenses, appoin such necessary personnel and create such committees to 
assist him in the proper implementation of this Act. 
During the first phase of this program, the Secretary shall submit an 
annual progress report to the Congress on the implementation and administration 
of this Program. 
SECTION 9. Sanctions. - The Secretary shall have the power to impose 
administrative sanctions such as warning, reprimand, withdrawal of accreditation 
or censure on any individual or participating private hospital that violates any 
provision of this Act. The appropriate court, in cases of repeated and willful 
violation, shall have the power to impose fine and suspension or cancellation of 
permit to operate of the erring private hospital. 
In cases of fraudulent or collusive claims the Secretary shall endorse said 
claims to the Department of Justice for appropriate investigation, prosecution and 
action. 


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SECTION I O .  Rules and Regulations. - The Secretary shall promulgate 
such rules and regulations as may be necessary to implement the provisions of 
this Act. 
SECTION 11. Repealing Clause. - All laws or parts thereof that are 
inconsistent with any provision of this Act shall be deemed repealed, amended, 
or modified accordingly. 
SECTION 12. Effectivity. - This Act shall take effect fifteen (15) days after 
publication in the Official Gazette or in any newspaper of general circulation. 
Approved,