Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

Introduced by HONORABLE JUAN EDGARDO “SONNY” M. ANGARA

EXPLANATORY NOTE

The National Health Insurance Act or PHILHEALTH Act envisioned the establishment of
a system that would provide all citizens, especially the poor, financial access to health services
through a National Health Insurance Program (NHIP). | believe PhilHealth has indeed
revolutionized our health insurance in ways never before imagined. If before, the poor stayed at
home when they are ill because healthcare is unaffordable and inaccessible, this time, their
PhilHealth membership has made it possible for them to enter a hospital (some for the first time)
to be properly attended to by doctors and nurses.

While this has resulted in marked gains in the delivery of basic health care services in
the country, there still remain major challenges facing the country's health sector. This
government has yet to increase its health budget. This dismal level of financing in the health
sector simply shows the insufficient efforts to make substantial improvements in the health of
the population, especially our poor.

So problems persist.

For instance, World Bank reports that infant and mortality rates for babies below 5 years
old are 2.3 — 2.7 times higher for households in the poorest groups in the country. Among pre-
school age children, the national estimates for the prevalence of malnutrition reveal that 31 out
of every 100 children (30.6%) are underweight. Among school-age children, 33 out of every 100
children (32.9%) are underweight for their age. Full vaccination rate has likewise decreased. A
national government survey indicates that 3 out of 10 children age 12-23 months have not
received the recommended vaccinations.

These statistics highlight the difference in living standards and access to health care.
Poor families would usually forego health care and put more of their resources on food
consumption.


This measure aims to do its share in addressing this lamentable experience. It proposes
to increase and expand the scope and coverage of our NHIP to cover one of the most uninsured
population to benefit from public health insurance programs — the children. Let us make our
children not only dependents but beneficiaries as well. The Children's Health Insurance
Program (CHIP), as proposed, is designed for low-income families who cannot afford to insure
the health needs of their children. To date, the estimated number of children in the Philippines is
at 33,134,812 wherein 14,093,102 are considered poor. With the implementation of a Children’s
Health Insurance Program (CHIP) under the NHIP, eligible low-income children shall be entitled
to a full range of health services including regular checkups, immunizations, prescription drugs,
lab tests, X-rays, hospital and clinic visits, durable medical equipments, hospital visits, dental
and eye care.

These innovations will do wonders to our young population and will be consistent with
the Millenium Development Goals (MDGs) of galvanizing unprecedented and concerted efforts
to meet the needs of the underprivileged sector. Let us take pride in our achievements while we
continue to explore ways in making PhilHealth even more responsive to changing times and the
needs of our people especially the uninsured children of our poor.

Approval of this measure, therefore, is urgently and earnestly sought.

vl < x ee gd tl
“JUAN EDGARDO “SONNY” M. ANGARA
Representative
Lone District, Province of Aurora


FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

H.B.No.C 50

Introduced by Honorable JUAN EDGARDO “SONNY” M. ANGARA

AN ACT
GRANTING ADDITIONAL POWERS TO THE PHILIPPINE HEALTH INSURANCE
CORPORATION (PHILHEALTH), AMENDING FOR THE PURPOSE REPUBLIC ACT
NO, 7875, OTHERWISE KNOWN AS THE “NATIONAL HEALTH INSURANCE ACT
OF 1995,” AS AMENDED, AND FOR OTHER PURPOSES

Be jit enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:
SECTION 1. Section 4 of Republic Act No. 7875, as amended, is hereby further
amended by adding a definition of the informal sector, to be denominated as paragraph (r) and
succeeding paragraphs to be re-denominated accordingly.

"SEC. 4. Definition of Terms. - For the purpose of this Act, the following
terms shall be defined as follows:
xXx
“R) INFORMAL SECTOR - THE INFORMAL SECTOR REFERS
TO THAT SECTOR CONSISTING OF UNITS ENGAGED IN THE
PRODUCTION OF GOODS AND SERVICES WITH THE PRIMARY
OBJECTIVE OF GENERATING EMPLOYMENT AND INCOMES TO
THE PERSON CONCERNED, IN ORDER TO EARN A LIVING,
PARTICULARLY UNINCORPORATED HOUSEHOLD ENTERPRISES
THAT ARE MARKET AND NON-MARKET PRODUCERS OF GOODS
AS WELL AS MARKET PRODUCERS OF SERVICES. TO THIS
SECTOR BELONG, AMONG OTHERS, STREET HAWKERS, MARKET
VENDORS, PEDICAB AND TRICYCLE DRIVERS, SMALL
CONSTRUCTION WORKERS AND HOME-BASED INDUSTRIES AND
SERVICES.

Bae
SEC. 2. Section 16 of the same Act is hereby amended to read as follows:
“SEC. 16. Powers and Functions. - The Corporation shall have the

following powers and functions:
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“c) TO SUPERVISE THE PROVISION OF HEALTH BENEFITS

AND to set standards, rules, and regulations necessary to ensure quality
of care, appropriate utilization of services, fund viability, member
satisfaction, and overall accomplishment of Program objectives;

“d) to formulate and implement guidelines on contributions and

benefits; portability of benefits, cost containment and quality assurance;
[and] health care provider arrangements, payment methods, and referral
systems; AND PROVISION OF AN INCENTIVE SYSTEM FOR HEALTH
CARE PROVIDERS SUBJECT TO TERMS AND CONDITIONS AS MAY
BE DETERMINED BY THE BOARD;

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“m) [to supervise the provision of health benefits with the power]to

VISIT, ENTER AND inspect FACILITIES OF HEALTH CARE
PROVIDERS AND EMPLOYERS AND TO SECURE COPIES OF THEIR
medical, [and] financial AND OTHER RECORDS PERTINENT TO THE
CLAIMS, ACCREDITATION, PREMIUM CONTRIBUTION records, AND
THAT of THEIR PATIENTS OR EMPLOYEES, WHERE APPLICABLE,
[health care providers and patients] who are [participants in]
BENEFICIARIES or members of the Program;[, and the power to enter
and inspect accredited health care institutions, subject to the rules and
regulations to be promulgated by the Corporation:]

SEC. 3.
as follows:

sURORr

Section 18 of the same Act, as amended, is hereby further amended to read

“SEC. 18. The Board of Directors. -

“a) Composition — The Corporation shall be governed by a Board

of Directors hereinafter referred to as the Board, composed of the

following members:

“The Secretary of Health;
“The Secretary of Labor and Employment or his representative;
“The Secretary of the Interior and Local Government or his

representative;

"The Secretary of Social Welfare and Development or his

representative;

“The President AND CHIEF EXECUTIVE OFFICER (CEO) of the

Corporation;

“A representative of the [labor] FORMAL sector,
“A representative of employers;

“The SSS Administrator or his representative;
“The GSIS General Manager or his representative;


“The Vice Chairperson for the basic sector of the National Anti-
Poverty Commission or his representative;

“A representative of Filipino overseas workers;

A representative of the [self-employed] INFORMAL sector; and

“A representative of health care providers [to be endorsed by the
national associations of health care institutions and medical health
professionals].

“SECTORAL REPRESENTATIVES SHALL BE ENDORSED BY
THEIR RESPECTIVE DULY RECOGNIZED NATIONAL
ASSOCIATIONS.

“The Secretary of Health shall be the ex officio Chairperson while
the President AND CHIEF EXECUTIVE OFFICER (CEO) of the
Corporation shall be the Vice Chairperson of the Board.

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SEC. 4. Section 19, subsection a) of the same Act, is hereby amended to read as

follows:

“SEC. 19. The President of the Corporation. —

“a) Appointment and Tenure - The President of the Philippines
shall appoint for a non-renewable term of six (6) years the President of the
Corporation, hereinafter referred to as the President, upon the recommendation
of the Board. The President MAY BE REMOVED FOR CAUSE, UPON
RECOMMENDATION OF THE BOARD [shall not be removed from office except
in accordance with existing laws].

SEK ie
SEC. 5. Section 31 of the same Act is hereby amended to read as follows:

“SEC. 31. Authority to Grant Accreditation. - The Corporation shall have
the authority to grant to health care providers accreditation which confers the
privilege of participating in the Program: PROVIDED, HOWEVER, THAT IN NO
CASE SHALL THE CORPORATION GRANT THE RENEWAL OF
ACCREDITATION OR RE-ACCREDITATION, TO ANY HEALTH CARE
PROVIDER FOUND GUILTY AS CHARGED FOR ANY VIOLATIONS OF THIS
ACT, SUBJECT TO THE TERMS AND CONDITIONS ISSUED BY THE
BOARD.”

SEC.6, Section 41, subsections a) and b) of the same Act, is hereby amended to
read as follows:


“SEC. 41. Grievance and Appeal Procedures. — A member, his
dependent, or a health care provider may file a complaint for grievance based on
any of the above grounds, in accordance with the following procedures:

*a) A complaint for grievance must be filed with the [Office]
CORPORATION which shall rule on the complaint within [ninety (90)]
‘SIXTY (60) calendar days from receipt thereof.

“b) Appeals from [Office] THE CORPORATION’S decisions must
be filed with the Board within [thirty (30)] FIFTEEN (15) CALENDAR days
from receipt of THE notice of DECISION [dismissal or disallowance by
the Office]

be a
SEC.7. Section 44 of the same Act is hereby amended to read as follows:

“Article X. OFFENSES AND PENALTIES

['SEC. 44, Penal Provisions. ~ Any violation of the provisions of this
Act, after due notice and hearing, shall suffer the following penalties:

“A fine of not less than Ten thousand pesos (P10,000) nor more than Fifty
thousand pesos (P50,000) in case the violation is committed by the hospital
management or provider. In addition, its accreditation shall be suspended or
revoked from three (3) months to the whole term of accreditation: Provided,

however, That recidivists may not anymore be accredited as a participant of the
Program;

“A fine of not less than Five hundred pesos (P500) nor more than Five
thousand pesos (P5,000) and imprisonment of not less than six (6) months nor
‘more than one (1) year in case the violation is committed by the member.

“Where the violations consist of failure or refusal to deduct contributions
from the employee’s compensation or to remit the same to the Corporation, the
penalty shall be a fine of not less than Five hundred pesos (P500) but not more
than One thousand pesos (P1,000) multiplied by the total number of employees
employed by the firm and imprisonment of not less than six (6) months but not
more than one (1) year: Provided, further, That in the case of self-employed
members, failure to remit one’s own contribution shall be penalized with a fine of
not less than Five hundred pesos (P500) but not more than One thousand pesos
(P1,000)]

“SEC, 44, PENAL PROVISIONS.

|. OFFENSES OF INSTITUTIONAL HEALTH CARE PROVIDERS
“A) THE FOLLOWING VIOLATIONS OF ACCREDITED

INSTITUTIONAL HEALTH CARE PROVIDERS, AFTER DUE NOTICE

AND HEARING, SHALL BE PENALIZED WITH SUSPENSION OF

4


ACCREDITATION OF NOT LESS THAN THREE (3) MONTHS BUT
NOT MORE THAN SIX (6) MONTHS OR REVOCATION OF
ACCREDITATION, AT THE DISCRETION OF THE CORPORATION
AND/OR A FINE OF NOT LESS THAN FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MORE THAN ONE HUNDRED THOUSAND
PESOS (P100,000.00):

“4) FILING OF MULTIPLE CLAIMS — ANY HEALTH CARE
PROVIDER WHO, FOR THE PURPOSE OF CLAIMING PAYMENT
FROM THE NHIP, FILES TWO (2) OR MORE CLAIMS FOR A
PATIENT FOR THE SAME CONFINEMENT OR ILLNESS, OR
MAKES IT APPEAR THAT THE PATIENT HAD BEEN CONFINED
FOR TWO (2) OR MORE TIMES AND/OR FOR TWO (2) OR
MORE DIFFERENT ILLNESSES;

“2) UNJUSTIFIED ADMISSION BEYOND ACCREDITED
BED CAPACITY — ANY HEALTH CARE INSTITUTION WHICH,
FOR THE PURPOSE OF CLAIMING PAYMENT FROM THE NHIP,
FILES A CLAIM FOR PATIENTS CONFINED IN EXCESS OF THE
ACCREDITED BED CAPACITY AT ANY GIVEN TIME WITHOUT
JUSTIFICATION IN THE FORM AND MANNER PRESCRIBED BY
THE CORPORATION;

3) CLAIMS FOR UNAUTHORIZED SERVICES AND
PROCEDURES PERFORMED BEYOND ACCREDITATION
CAPABILITY OF THE HEALTH CARE INSTITUTION — ANY
HEALTH CARE INSTITUTION WHICH PERFORMS HEALTH
CARE SERVICES AND PROCEDURES BEYOND ITS
AUTHORIZED CAPABILITY, EXCEPT WHEN SUCH SERVICES
WERE DONE IN AN EMERGENCY SITUATION TO SAVE LIVES
AND WHEN REFERRAL TO A HIGHER CATEGORY PROVIDER
IS PHYSICALLY IMPOSSIBLE;

4) BREACH OF WARRANTIES OF ACCREDITATION -
ANY INSTITUTIONAL HEALTH CARE PROVIDER WHO
COMMITS ANY BREACH OF WARRANTIES OF
ACCREDITATION; AND

“6) OTHER VIOLATIONS - ANY OTHER WILLFUL OR
NEGLIGENT ACT OR OMISSION OF THE INSTITUTIONAL
HEALTH CARE PROVIDER IN VIOLATION OF THIS ACT WHICH
TENDS TO UNDERMINE OR DEFEAT THE OBJECTIVES OF
THE NHIP SHALL BE CONSIDERED AS BREACH OF
WARRANTIES.

“B) THE FOLLOWING OFFENSES OF INSTITUTIONAL
HEALTH CARE PROVIDERS, AFTER DUE NOTICE AND HEARING,
SHALL BE PENALIZED WITH SUSPENSION OF ACCREDITATION OF

5


NOT LESS THAN SIX (6) MONTHS AND ONE (1) DAY BUT NOT
MORE THAN NINE (9) MONTHS OR REVOCATION OF
ACCREDITATION AT THE DISCRETION OF THE CORPORATION
AND/OR A FINE OF NOT LESS THAN FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MORE THAN ONE HUNDRED THOUSAND
PESOS (P100,000.00):

1) MISREPRESENTATION BY FURNISHING FALSE OR
INCORRECT INFORMATION ~ ANY HEALTH CARE PROVIDER
SHALL BE LIABLE FOR FRAUDULENT PRACTICE WHEN FOR
THE PURPOSE OF PARTICIPATION IN THE NHIP OR CLAIMING
PAYMENT THEREFROM, IT FURNISHES FALSE OR
INCORRECT INFORMATION CONCERNING ANY MATTER
REQUIRED BY THIS ACT;

“2) ABUSES AND UNETHICAL PRACTICES - ANY
HEALTH CARE INSTITUTION SHALL BE LIABLE FOR THE
FOLLOWING ABUSES AND UNETHICAL PRACTICES:

“i) CHARGING OR COLLECTING FROM A

MEMBER AN AMOUNT IN EXCESS OF THE BENEFITS

INCLUDING THOSE COVERED BY CAPITATION OR

GLOBAL BUDGETS FOR  PHILHEALTH-COVERED

SERVICES AND SUPPLIES WHICH PROHIBITS

CHARGING OF OUT-OF-POCKET PAYMENT INCLUDING

OUTSIDE PURCHASES OF MEDICINES, SUPPLIES AND

HEALTH CARE SERVICES THAT ARE INCLUDED IN THE

BENEFIT;

“ii) ENROLLMENT AND/OR RECRUITMENT OF A

PERSON FOR MEMBERSHIP IN THE NHIP FOR THE SOLE

PURPOSE OF CLAIMING BENEFITS OR PAYMENT OF

PREMIUM OF A MEMBER BEFORE PROVIDING HEALTH

CARE SERVICES TO HIM/HER, EXCEPT WHEN THE

PATIENT OR MEMBER IS ITS EMPLOYEE OR THE

OWNER’S RELATIVE WITHIN. THE FOURTH CIVIL

DEGREE OF CONSANGUINITY OR AFFINITY; AND

‘iii) ALL SUCH OTHER ANALOGOUS ABUSES

AND UNETHICAL PRACTICES AS MAY BE DETERMINED

BY THE CORPORATION.

"3) OTHER FRAUDULENT ACTS — ANY INSTITUTIONAL
HEALTH CARE PROVIDER SHALL ALSO BE LIABLE FOR THE
FOLLOWING FRAUDULENT ACTS:

‘i) MAKING IT APPEAR THAT THE PATIENT

SUFFERED FROM COMPENSABLE ILLNESS OR

UNDERWENT A COMPENSABLE PROCEDURE;

6


“ii) FAILURE OR REFUSAL TO GIVE THE
BENEFITS DUE TO QUALIFIED MEMBERS/DEPENDENTS;
ii) CHARGING QUALIFIED PATIENTS FOR
MEDICINES AND/OR SERVICES WHICH ARE LEGALLY
CHARGEABLE TO AND COVERED BY THE NHIP;
*iv) FAILURE OR REFUSAL TO REFUND TO THE
MEMBER THE PAYMENT RECEIVED FROM THE NHIP
WHEN THE HOSPITAL CHARGES AND PROFESSIONAL
FEES ARE FULLY PAID IN ADVANCE BY THE MEMBER
WITHIN THE PERIOD OF THIRTY (30) DAYS FROM THE
DATE OF RECEIPT OF REFUND CHECK FROM THE
CORPORATION: PROVIDED, HOWEVER, THAT IF THE
MEMBER FAILED TO GET HIS/HER REFUND DESPITE
DUE NOTICE, THE HEALTH CARE INSTITUTION SHALL
RETURN SUCH UNCLAIMED REFUND TO THE
CORPORATION WITHIN THE PRESCRIBED PERIOD AS
MAY BE DETERMINED BY THE BOARD;
“v) FAILURE OR REFUSAL TO ACCOMPLISH
AND SUBMIT THE REQUIRED FORMS IN CONNECTION
WITH LETTER IV OF THIS SECTION;
“vi) FAILURE OR REFUSAL TO PROVIDE THE
MEMBERS WITH THE REQUIRED FORMS FOR DIRECT
FILING OF CLAIMS, BILLING STATEMENTS, OFFICIAL
RECEIPTS AND OTHER DOCUMENTS REQUIRED FOR
FILING OF CLAIMS; OR
‘vii) DELIBERATE FAILURE OR REFUSAL TO
COMPLY WITH THE REQUIREMENTS UNDER THIS ACT.
“C) THE FOLLOWING OFFENSES OF INSTITUTIONAL
HEALTH CARE PROVIDERS, AFTER DUE NOTICE AND HEARING,
SHALL BE PENALIZED WITH SUSPENSION OF ACCREDITATION OF
NOT LESS THAN NINE (9) MONTHS AND ONE (1) DAY BUT NOT
MORE THAN TWELVE (12) MONTHS OR REVOCATION OF
ACCREDITATION AT THE DISCRETION OF THE CORPORATION
AND/OR A FINE OF NOT LESS THAN FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MORE THAN ONE HUNDRED THOUSAND
PESOS (P100,000.00):
“4) PADDING OF CLAIMS — ANY INSTITUTIONAL HEALTH
CARE PROVIDER WHO, FOR THE PURPOSE OF CLAIMING
PAYMENT FROM THE NHIP, FILES A CLAIM FOR BENEFITS
WHICH ARE IN EXCESS OF THE BENEFITS ACTUALLY
PROVIDED BY ADDING DRUGS, MEDICINES, SUPPLIES,
PROCEDURES AND SERVICES;

7


“2) CLAIMS FOR SERVICES NOT RENDERED AND/OR
CONFINEMENTS OF NON-ADMITTED PATIENTS - ANY
INSTITUTIONAL HEALTH CARE PROVIDER WHO, FOR THE
PURPOSE OF CLAIMING BENEFIT REIMBURSEMENT FROM
THE NHIP BY:

“i) MAKING IT APPEAR THAT THE PATIENT IS
ACTUALLY CONFINED AND/OR PROVIDED IN THE
PHILHEALTH-COVERED SERVICES IN THE HEALTH
CARE INSTITUTION/FACILITY; OR

“ii) USING SUCH OTHER MACHINATIONS THAT
WOULD RESULT IN CLAIMS FOR SERVICES NOT
RENDEREDIGIVEN.

"3) EXTENDING THE PERIOD OF CONFINEMENT ~ THIS
1S COMMITTED BY ANY HEALTH CARE PROVIDER WHO, FOR
THE PURPOSE OF CLAIMING PAYMENT FROM THE NHIP,
FILES A CLAIM WITH EXTENDED PERIOD OF CONFINEMENT
BY:

“i) INCREASING THE PERIOD OF ACTUAL
CONFINEMENT OF ANY PATIENT;

“ii) CONTINUOUSLY CHARTING ENTRIES IN THE
DOCTORS’ ORDER, NURSES’ NOTES AND
OBSERVATION DESPITE ACTUAL DISCHARGE OR
ABSENCE OF THE PATIENTS; OR

“iii) USING SUCH OTHER MACHINATIONS THAT
‘WOULD RESULT IN THE UNNECESSARY EXTENSION OF
CONFINEMENT.

“4) POST-DATING OF CLAIMS - ANY INSTITUTIONAL
HEALTH CARE PROVIDER WHO, FOR PURPOSES OF
CLAIMING PAYMENT FROM THE NHIP, FILES A CLAIM FOR
PAYMENT OF SERVICES RENDERED NOT WITHIN SIXTY (60)
CALENDAR DAYS FROM THE DATE OF DISCHARGE OF THE
PATIENT OR SUCH OTHER PRESCRIPTIVE PERIODS AS THE
CORPORATION MAY ISSUE BUT MAKES IT APPEAR SO BY
CHANGING, ERASING OR ADDING TO THE PERIOD OF
CONFINEMENT OR IN ANY MANNER ALTERING DATES SO AS
TO CONFORM WITH THE ADOPTED PRESCRIPTIVE PERIOD;

“5) FABRICATION OR POSSESSION OF FABRICATED
FORMS AND SUPPORTING DOCUMENTS - ANY
INSTITUTIONAL HEALTH CARE PROVIDER WHO IS FOUND
PREPARING CLAIMS WITH MISREPRESENTATION OR FALSE
ENTRIES OR TO BE IN POSSESSION OF CLAIM FORMS AND
OTHER DOCUMENTS WITH FALSE ENTRIES;

8


“D) PERIOD TO FILE CLAIMS - ALL CLAIMS FOR
REIMBURSEMENT SHALL BE FILED WITHIN A PERIOD OF SIXTY
(60) CALENDAR DAYS FROM THE DATE OF DISCHARGE OF THE
PATIENT; OTHERWISE, THE CLAIM SHALL BE DENIED: PROVIDED,
HOWEVER, THAT SUCH PERIOD MAY BE EXTENDED FOR SUCH
CAUSES AS MAY BE DETERMINED BY THE CORPORATION.

“E) CRIMINAL LIABILITY - IN ADDITION, A CRIMINAL
COMPLAINT SHALL BE FILED AGAINST THE CHIEF EXECUTIVE
OFFICER (CEO)ICHIEF OPERATING OFFICER (COO) OR ITS
EQUIVALENT OFFICERS, MEDICAL DIRECTOR OR ITS EQUIVALENT
OFFICER AND OTHER OFFICERS OF THE ERRING INSTITUTIONAL
HEALTH CARE PROVIDER BEFORE THE APPROPRIATE OFFICE OF
THE PROSECUTOR FOR VIOLATIONS OF THIS ACT AND/OR THE
REVISED PENAL CODE.

ll. OFFENSES OF HEALTH CARE PROFESSIONALS

“A) A HEALTH CARE PROFESSIONAL, AFTER DUE NOTICE
AND HEARING, SHALL BE PENALIZED WITH
SUSPENSION/REVOCATION OF ACCREDITATION OF NOT LESS
THAN THREE (3) MONTHS TO THE WHOLE TERM OF
ACCREDITATION OR A FINE OF NOT LESS THAN FIFTY THOUSAND
PESOS (P50,000.00) BUT NOT MORE THAN ONE HUNDRED
THOUSAND PESOS (P100,000.00) OR BOTH SUCH FINE AND
SUSPENSION OR REVOCATION, AT THE DISCRETION OF THE
CORPORATION:

“1) MISREPRESENTATION BY FALSE OR INCORRECT

INFORMATION. ~ ANY HEALTH CARE PROFESSIONAL SHALL

BE LIABLE FOR FRAUDULENT PRACTICE WHEN, FOR

PURPOSES OF PARTICIPATION IN THE NHIP OR CLAIMING

PAYMENT FROM THE CORPORATION, FURNISHES FALSE OR

INCORRECT INFORMATION CONCERNING ANY MATTER

REQUIRED BY THIS ACT;

“2) BREACH OF WARRANTIES OF ACCREDITATION -

ANY HEALTH CARE PROFESSIONAL FOUND TO HAVE

COMMITTED ANY BREACH OF WARRANTIES OF

ACCREDITATION;

“3) ABUSES AND UNETHICAL PRACTICES - ANY

HEALTH CARE PROFESSIONAL SHALL BE LIABLE FOR THE

FOLLOWING ABUSES AND UNETHICAL PRACTICES:

“i) PERFORMANCE OF PROCEDURES BEYOND
THOSE ALLOWED BY THE HEALTH PROFESSIONAL’S

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QUALIFICATIONS AND TRAINING EXCEPT WHEN UNDER
THE DIRECT SUPERVISION OF A QUALIFIED HEALTH
CARE PROFESSIONAL;

“ii) CHARGING OR COLLECTING FROM A
MEMBER AN AMOUNT IN EXCESS OF THE BENEFITS
INCLUDING THOSE COVERED BY CAPITATION OR
GLOBAL BUDGETS FOR  PHILHEALTH-COVERED
SERVICES AND SUPPLIES WHICH PROHIBITS
CHARGING OUT-OF-POCKET PAYMENTS INCLUDING
OUTSIDE PURCHASES OF MEDICINES, SUPPLIES AND
HEALTH CARE SERVICES THAT ARE INCLUDED IN THE
BENEFIT;

“iii) ENROLLMENT AND/OR RECRUITMENT OF A
PERSON FOR MEMBERSHIP IN THE NHIP. WITH THE
SOLE PURPOSE OF CLAIMING BENEFITS AND/OR
PAYMENT OF PREMIUM OF A MEMBER BEFORE
PROVIDING HEALTH CARE SERVICES TO HIM/HER,
EXCEPT WHEN THE PATIENT OR MEMBER IS HIS/HER
EMPLOYEE OR RELATIVE WITHIN THE FOURTH CIVIL
DEGREE OF CONSANGUINITY OR AFFINITY; AND

‘iv) ALL SUCH OTHER ANALOGOUS ABUSES
AND UNETHICAL PRACTICES AS MAY BE DETERMINED
BY THE CORPORATION.

“4) OTHER FRAUDULENT ACTS - ANY HEALTH CARE
PROFESSIONAL SHALL ALSO BE LIABLE FOR THE
FOLLOWING FRAUDULENT ACTS:

“i) MAKING IT APPEAR THAT THE PATIENT
SUFFERED FROM COMPENSABLE ILLNESS OR
UNDERWENT A COMPENSABLE PROCEDURE;

“ji) FAILURE OR REFUSAL TO GIVE THE
BENEFITS DUE TO QUALIFIED MEMBERS/
DEPENDENTS;

“jii) CHARGING QUALIFIED PATIENTS FOR
MEDICINES AND/OR SERVICES WHICH ARE LEGALLY
CHARGEABLE TO AND COVERED BY THE NHIP;

“jy) FAILURE OR REFUSAL TO REFUND TO THE
MEMBER THE PAYMENT RECEIVED FROM THE NHIP
WHEN THE HOSPITAL CHARGES AND PROFESSIONAL
FEES ARE FULLY PAID IN ADVANCE BY THE MEMBER
WITHIN THE PERIOD OF THIRTY (30) DAYS FROM THE
DATE OF RECEIPT OF REFUND CHECK FROM THE
CORPORATION;

10


“v) FAILURE OR REFUSAL TO ACCOMPLISH
AND SUBMIT THE REQUIRED FORMS IN CONNECTION
WITH LETTER (iv) OF THIS SECTION;

“vi) FAILURE OR REFUSAL TO PROVIDE THE
MEMBERS WITH THE REQUIRED FORMS FOR DIRECT
FILING OF CLAIMS: BILLING STATEMENTS, OFFICIAL
RECEIPTS AND OTHER DOCUMENTS REQUIRED FOR
FILING OF CLAIMS; OR

‘vii) DELIBERATE FAILURE OR REFUSAL TO
COMPLY WITH THE REQUIREMENTS UNDER THIS ACT.

"5) OTHER VIOLATIONS — ANY OTHER WILLFUL OR

NEGLIGENT ACT OR OMISSION OF A HEALTH CARE

PROFESSIONAL IN VIOLATION OF THIS ACT WHICH TENDS

TO UNDERMINE OR DEFEAT THE OBJECTIVES OF THE NHIP

SHALL BE CONSIDERED AS BREACH OF WARRANTIES.

“B) CRIMINAL LIABILITY — IN ADDITION, A CRIMINAL
COMPLAINT SHALL BE FILED AGAINST ERRING HEALTH CARE
PROFESSIONALS BEFORE THE APPROPRIATE OFFICE OF THE
PROSECUTOR FOR VIOLATIONS OF THIS ACT AND/OR THE
REVISED PENAL CODE.

“Ill, OFFENSES OF MEMBERS:

“A) FRAUDULENT ACTS - ANY MEMBER WHO, FOR
PURPOSES OF CLAIMING NHIP BENEFITS OR ENTITLEMENT
THERETO, SHALL COMMIT ANY OF THE OFFENSES PROVIDED
FOR BY THIS ACT, INDEPENDENTLY OR IN CONNIVANCE WITH
THE HEALTH CARE PROVIDER, SHALL SUFFER SUSPENSION
FROM AVAILMENT OF NHIP BENEFITS FOR NOT LESS THAN
THREE (3) MONTHS BUT NOT MORE THAN SIX (6) MONTHS
ANDIOR A FINE OF FIVE THOUSAND PESOS (P5,000.00).

“B) CRIMINAL LIABILITY - IN ADDITION, A CRIMINAL
COMPLAINT SHALL BE FILED AGAINST THE MEMBER BEFORE
THE OFFICE OF THE PROSECUTOR FOR THE ABOVEMENTIONED
VIOLATIONS WHICH CARRY A PENALTY OF IMPRISONMENT OF
NOT LESS THAN SIX (6) MONTHS BUT NOT MORE THAN ONE (1)
YEAR.

“IV. OFFENSES OF EMPLOYERS

“A) FAILURE/REFUSAL TO REGISTER/DEDUCT/REMIT THE
CONTRIBUTIONS — ANY EMPLOYER WHICH FAILS OR REFUSES TO

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REGISTER ITS EMPLOYEES OR TO DEDUCT CONTRIBUTIONS
FROM THE EMPLOYEE’S COMPENSATION —AND/OR TO REMIT
THE SAME TO THE CORPORATION SHALL BE PENALIZED WITH
IMPRISONMENT OF NOT LESS THAN SIX (6) YEARS AND ONE (1)
DAY TO TWELVE (12) YEARS AND A FINE OF NOT LESS THAN FIVE
THOUSAND PESOS (P5,000.00) MULTIPLIED BY THE TOTAL
NUMBER OF EMPLOYEES OF THE FIRM.

“Any employer or any officer authorized to collect contributions
under this Act who, after collecting or deducting the monthly contributions
from his employees’ compensation, fails to remit the said contributions to
the Corporation within thirty (30) days from the date they become due
shall be presumed to have misappropriated such contributions and shall
suffer the penalties provided for in Article 315 of the Revised Penal Code.

“B) DEDUCTIONS OF EMPLOYER'S SHARE, DIRECTLY OR
INDIRECTLY, FROM THE COMPENSATION OF ITS EMPLOYEES —
‘Any employer who shall deduct directly or indirectly from the
compensation of the covered employees or otherwise recover from them
THEIR [hisJown contribution on behalf of such employees shall be
punished by IMPRISONMENT FOR NOT LESS THAN SIX (6) YEARS
AND ONE (1) DAY TO TWELVE (12) YEARS AND a fine [not
exceeding] OF FIVE [One] thousand pesos [(P1,000)] (PS,000.00)
multiplied by the total number of employees employed by the firm[, or

imprisonment not exceeding one (1) year, or both fine and imprisonment,
at the discretion of the Court]

“If the act or omission penalized by this Act be committed by an
association, partnership, corporation or any other institution, its managing
directors or partners or president or general manager, or other persons
responsible for the commission of the said act shall be liable for the
penalties provided for in this Act and other laws for the offense.

“C) MISAPPROPRIATION OF FUNDS BY EMPLOYEES OF THE
CORPORATION - Any employee of the Corporation who receives or
keeps funds or property belonging, payable or deliverable to the
Corporation, and who shall appropriate the same, or shall take or
misappropriate or shall consent, or through abandonment or negligence
shall permit any other person to take such property or funds wholly or
partially, shall likewise be liable for misappropriation of funds or property
and shall suffer imprisonment of not less than six (6) years and ONE (1)
DAY BUT not more than twelve (12) years and a fine of not less than Ten
thousand pesos (P10,000.00) nor more than Twenty thousand pesos
(P20,000.00). Any shortage of the funds or loss of the property upon
audit shall be deemed prima facie evidence of the offense.

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“D) CRIMINAL ACTION ARISING FROM A VIOLATION OF THE
PROVISIONS OF THIS ACT MAY BE COMMENCED BY THE
CORPORATION OR EMPLOYEE CONCERNED, WHERE
APPLICABLE, EITHER UNDER THIS ACT OR IN THE REVISED
PENAL CODE: PROVIDED, THAT SUCH CRIMINAL ACTION MAY BE
FILED BY THE CORPORATION IN THE CITY OR MUNICIPALITY
WHERE THE CORPORATION'S OFFICE IS LOCATED IF THE
VIOLATION WAS COMMITTED WITHIN ITS TERRITORIAL
JURISDICTION OR IN METRO MANILA, AT THE OPTION OF THE
CORPORATION.

“V, CIRCUMSTANCES WHICH AFFECT ADMINISTRATIVE
LIABILITY

“A) MITIGATING AND AGGRAVATING CIRCUMSTANCES —-
THE FOLLOWING CIRCUMSTANCES SHALL AFFECT THE GRAVITY
OF THE VIOLATION AND THE LIABILITY OF THE ERRING HEALTH
CARE PROVIDER, MEMBER AND EMPLOYER:

“4) MITIGATING CIRCUMSTANCES - THE FOLLOWING
CIRCUMSTANCES SHALL MITIGATE THE LIABILITY OF THE
RESPONDENT:

“i) VOLUNTARY ADMISSION OF GUILT;

“ii) GOOD TRACK RECORD;

“iii) FIRST OFFENSE; AND

‘iv) SUCH OTHER VALID CIRCUMSTANCES AS

MAY BE DETERMINED BY THE CORPORATION.

“2) AGGRAVATING CIRCUMSTANCES - THE
FOLLOWING CIRCUMSTANCES SHALL AGGRAVATE THE
LIABILITY OF THE RESPONDENT:

*i) PREVIOUS CONVICTION OF AN OFFENSE, AS

PROVIDED FOR IN THIS ACT;

) CONNIVANCE AND/OR CONSPIRACY WITH AN
OFFICER OR EMPLOYEE OF THE CORPORATION TO
FACILITATE OR COVER-UP COMMISSION OF THE
VIOLATION;

“iii) GROSS NEGLIGENCE; AND
“iv) SUCH OTHER VALID CIRCUMSTANCES AS

MAY BE DETERMINED BY THE CORPORATION.

“B) APPLICATION OF CIRCUMSTANCES IN THE IMPOSITION
OF PENALTIES:



“1) THE PRESENCE OF MITIGATING CIRCUMSTANCE
WITHOUT ANY AGGRAVATING CIRCUMSTANCE SHALL LIMIT
THE IMPOSABLE PENALTY TO ITS MINIMUM;

“2) WHEN THERE IS NEITHER MITIGATING NOR
AGGRAVATING CIRCUMSTANCE, THE IMPOSABLE PENALTY
SHALL BE BETWEEN THE MINIMUM AND THE MAXIMUM OF
THE APPLICABLE PENALTY FOR THE OFFENSE COMMITTED,
AT THE DISCRETION OF THE CORPORATION. THE SAME
SHALL APPLY WHEN BOTH MITIGATING AND AGGRAVATING
CIRCUMSTANCE ARE PRESENT; AND

“3) THE PRESENCE OF ANY AGGRAVATING
CIRCUMSTANCE WITHOUT THE MITIGATING CIRCUMSTANCE
SHALL INCREASE THE PENALTY OF THE OFFENSE TO ITS
MAXIMUM.

“VI. COMMON PROVISIONS

“ALL THE OFFENSES MENTIONED HEREIN, REGARDLESS OF
CLASSIFICATION BUT SUBJECT TO THE PROVISIONS OF SECTION
44 OF THIS ACT, SHALL BE PENALIZED IN THE FOLLOWING
MANNER:

“A) FIRST OFFENSE ~- SUSPENSION OF ACCREDITATION
FOR NOT LESS THAN THREE (3) MONTHS BUT NOT MORE THAN
SIX (6) MONTHS AND/OR A FINE OF NOT LESS THAN FIFTY
THOUSAND PESOS (P50,000.00) BUT NOT MORE THAN ONE
HUNDRED THOUSAND PESOS (P100,000.00);

“B) SECOND OFFENSE - SUSPENSION OF ACCREDITATION
FOR NOT LESS THAN SIX (6) MONTHS AND ONE (1) DAY BUT NOT
MORE THAN NINE (9) MONTHS AND/OR A FINE OF NOT LESS THAN
FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MORE THAN ONE
HUNDRED THOUSAND PESOS (P100,000.00);

“C) THIRD OFFENSE - PERMANENT REVOCATION OF
ACCREDITATION AND A FINE OF NOT LESS THAN FIFTY
THOUSAND PESOS (P50,000.00) BUT NOT MORE THAN ONE
HUNDRED THOUSAND PESOS (P100,000.00).

“ALL PENALTIES FOR OFFENSES COMMITTED BY HEALTH
CARE PROVIDERS AND MEMBERS SHALL CARRY WITH THEM
DENIAL OF PAYMENT OF CLAIMS IN QUESTION AND/OR REFUND
TO THE CORPORATION, IF ALREADY PAID.

“IF THE PENALTY OF SUSPENSION IMPOSED AGAINST A
HEALTH CARE PROVIDER EXCEEDS THE VALIDITY OF THE
CURRENT ACCREDITATION, THE RENEWAL OR THE RE-

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ACCREDITATION OF THE LATTER SHALL NOT BE ACTED UPON
UNTIL THE FULL TERM OF THE SUSPENSION IMPOSED HAD BEEN
SERVED OR LIFTED, FOR THIS PURPOSE, THE PERIOD COVERING
THE EXPIRATION OF ACCREDITATION AND THE START OF THE
EFFECTIVITY OF THE RENEWAL OR RE-ACCREDITATION SHALL
BE CONSIDERED AS PART OR CONTINUATION OF THE
SUSPENSION. THE SUSPENSION SHALL BE CARRIED OUT BY THE
TEMPORARY CESSATION OF THE BENEFITS OR PRIVILEGES
UNDER THE NHIP.

“SHOULD THE AGGREGATE PERIOD OF SUSPENSION TO BE
IMPOSED UPON THE PROVIDER ON ACCOUNT OF TWO (2) OR
MORE VIOLATIONS EXCEED TWENTY-FOUR (24) MONTHS, THE
MAXIMUM IMPOSABLE PENALTY SHALL BE EXACTED.

“IN ALL CASES WHEREIN A DECISION RENDERED AGAINST A
HEALTH CARE PROVIDER, THE DEPARTMENT OF HEALTH (DOH),
INCLUDING ITS REGIONAL OFFICES, THE PROFESSIONAL
REGULATION COMMISSION (PRC), THE PHILIPPINE MEDICAL
ASSOCIATION (PMA), THE PRIVATE HOSPITALS ASSOCIATION OF
THE PHILIPPINES (PHAP) AND OTHER CONCERNED AGENCIES
SHALL BE FURNISHED WITH A COPY OF THE SAME FOR
INFORMATION AND APPROPRIATE ACTION.

“A NOTICE OF SUSPENSION FOR THE INFORMATION OF THE
PUBLIC SHALL BE POSTED IN CONSPICUOUS PLACES IN THE
INSTITUTION CONCERNED INDICATING THE PERIOD OF
SUSPENSION IN SUCH FORM AND MANNER TO BE PRESCRIBED
BY THE CORPORATION.

“A HEALTH CARE PROVIDER WHO AT THE TIME OF TRIAL
FOR AN OFFENSE ENUMERATED HEREIN SHALL HAVE BEEN
PREVIOUSLY CONVICTED BY FINAL JUDGMENT FOR ANY
OFFENSE UNDER THIS ACT MAY NO LONGER BE ACCREDITED AS
PARTICIPANT OF THE NHIP.

“Vil, PROSECUTION OF OFFENSES

"OFFENSES AS HEREIN DEFINED, SHALL BE PROSECUTED IN
REGULAR COURTS OF JUSTICE OF COMPETENT JURISDICTION
WITHOUT PREJUDICE TO ADMINISTRATIVE ACTION THAT MAY BE
INSTITUTED BY THE CORPORATION UNDER EXISTING LAWS.

“vill. FILING OF OTHER LEGAL ACTIONS BEFORE THE PROPER
COURTS


“THE FILING OF AN ADMINISTRATIVE ACTION AGAINST ANY
HEALTH CARE PROVIDER, INSTITUTIONAL OR PROFESSIONAL,
EMPLOYER, OR MEMBER UNDER THIS ACT IS WITHOUT
PREJUDICE TO THE FILING OF FURTHER LEGAL ACTIONS IN THE
PROPER COURTS.

“IX. EXECUTION OF PENALTY

“WHEN AN INSTITUTIONAL HEALTH CARE PROVIDER
CEASES OPERATION OR AN INDEPENDENT HEALTH CARE
PROFESSIONAL STOPS HIS/HER PRACTICE BEFORE SERVING
THE SUSPENSION, EXECUTION OF THE PENALTY SHALL BE
DEFERRED, TO BE IMPLEMENTED WHEN THE SAME OWNER OR
MEDICAL DIRECTOR OPENS OR OPERATES A NEW INSTITUTION
IRRESPECTIVE OF THE NAME OR LOCATION, OR WHEN THE
HEALTH CARE PROVIDER PRACTICES AGAIN: PROVIDED, THAT
THE DISPOSITIVE PART OF THE RESOLUTION REQUIRING
PAYMENT OF FINES, REIMBURSEMENT OF PAID CLAIM OR DENIAL
OF PAYMENT SHALL BE IMMEDIATELY EXECUTORY.

“A SPOUSE OR RELATIVE WITHIN THE FOURTH DEGREE OF
CONSANGUINITY OR AFFINITY OF THE OWNER, CHIEF
OPERATING OFFICER OR ITS COUNTERPART OFFICER, MEDICAL
DIRECTOR OR ITS COUNTERPART OFFICER AND OTHER
OFFICERS SHALL BE PRESUMED TO BE THE ALTER EGO OF
SUCH OWNER OR MEDICAL DIRECTOR FOR THE ABOVE
PURPOSES.

“DESPITE THE CESSATION OF OPERATION OR PRACTICE OF
A HEALTH CARE PROVIDER WHILE THE COMPLAINT IS BEING
HEARD, THE PROCEEDING SHALL CONTINUE UNTIL RENDITION
OF JUDGMENT FOR PURPOSES OF DETERMINING FUTURE
RELATIONSHIPS BETWEEN THE CORPORATION AND THE ERRING
HEALTH CARE PROVIDER.

“X. APPLICABILITY OF THESE PROVISIONS

“COMPLAINTS ALREADY FILED WITH AND UNDER
DELIBERATION BY APPROPRIATE BODIES OF THE CORPORATION
PRIOR TO THE EFFECTIVITY OF THIS ACT SHALL BE GOVERNED
IN ACCORDANCE WITH THE PREVIOUS ACTS AND THEIR
IMPLEMENTING RULES AND REGULATIONS.

"XI. IMPOSITION OF INTERESTS AND SURCHARGES.

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“THE CORPORATION MAY IMPOSE INTERESTS AND
SURCHARGES OF THREE PERCENT (3%) PER MONTH OR AT ANY
RATE AS MAY BE FIXED BY THE CORPORATION IN CASE OF ANY
DELAY IN REMITTANCE OF CONTRIBUTIONS WHICH ARE DUE
WITHIN THE PRESCRIBED PERIOD. NOTWITHSTANDING THE
PROVISIONS OF ANY LAW TO THE CONTRARY, THE
CORPORATION MAY ALSO COMPROMISE, WAIVE OR RELEASE, IN
WHOLE OR IN PART, SUCH INTERESTS OR SURCHARGES UNDER
SUCH VALID TERMS AND CONDITIONS IT MAY PRESCRIBE.

“XI. LEGAL ASSISTANCE AND BENEFITS

“ANY OFFICER, EMPLOYEE, OR AUTHORIZED
REPRESENTATIVE OF THE CORPORATION WHO MAY BE SUED BY
ANY HEALTH CARE PROVIDER/MEMBER/STAKEHOLDER OR ANY
OTHER PERSON/ENTITY, IN CONNECTION WITH THE
PERFORMANCE OF THEIR DUTIES AND OBLIGATIONS UNDER THE
NHIP MAY BE ENTITLED TO SUFFICIENT LEGAL ASSISTANCE TO
BE PROVIDED BY A COMPETENT COUNSEL AND ATTORNEY’S
FEES UNDER SUCH TERMS AND CONDITIONS AS MAY BE
PRESCRIBED BY THE BOARD.

“XII, OTHER VIOLATIONS

“All other violations [involving funds]of the PROVISIONS OF THIS
ACT OR OF THE RULES AND REGULATIONS PROMULGATED BY
THE Corporation shall be PUNISHED BY IMPRISONMENT OF NOT
LESS THAN SIX (6) YEARS AND ONE (1) DAY TO TWELVE (12)
YEARS OR A FINE OF NOT LESS THAN FIVE THOUSAND PESOS
(P5,000.00) NOR MORE THAN TWENTY THOUSAND PESOS
(P20,000.00), OR BOTH, AT THE DISCRETION OF THE COURT
[governed by the applicable provisions of the Revised Penal Code or
other laws, taking into consideration the rules on collection, remittances,
and investment of funds as may be promulgated by the Corporation].”

SEC. 8, Implementing Rules and Regulations. Within one (1) year from the
approval of this Act, the Corporation shall promulgate a new implementing rules and
regulations which shall be published in at least two (2) newspapers of general
circulation


SEC. 9. Separability Clause. If any part or provision of this Act shall be held
unconstitutional or invalid, other provisions which are not affected thereby shall continue

to be in full force and effect.

SEC. 10. Repealing Clause. All laws, issuances or parts thereof inconsistent
with this Act are hereby repealed or modified accordingly.

SEC. 11. Effectivity. This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,

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