Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
FIRST REGULAR SESSION

HOUSE BILL NO. _i 02

Introduced by Honorable Janette L. Garin, M.D.

EXPLANATORY NOTE

On February 14, 1995, Republic Act No. 7875, otherwise known as “National
Health Insurance Act of 1995,” was approved and signed into law.

The said law enables the Constitutional policy of which declares 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. Priority for the needs of the
underprivileged, sick, elderly, disabled, women, and children shall be recognized.
Likewise, it shall be the policy of the State to provide free medical care to paupers.”

Among the Act's guiding principles is universality as the National Health
Insurance Program ultimate goal is to provide highest priority in covering the entire
population with at least a minimum health insurance package. This avowed goal
can only be realized if the national health insurance financial viability is ensured.

In 2007, however, media reports revealed that almost 4 billion pesos were
Jost by PhilHealth to fraudulent reimbursements through various unnecessary and
overpriced procedures since 1995. Without ignoring the need to investigate the
truthfulness of such reports, it is imperative that the National Health Insurance Act
of 1995, as amended, be strengthened so that the Corporation can readily address
the evolving sophistication of some individuals and organizations in defrauding the
national health insurance funds.

This bill aims to strengthen the Philippine Health Insurance Corporation to
go after criminals who seek to defraud the national health insurance funds through
false claims. The salient features of this proposed measure are as follows:

1. Visitorial power. To effectively address the issue of fraudulent activities, this
bill seeks to vest the Corporation with visitorial powers in order to
effectively check whether health care providers and employers are following
the provisions of the National Health Insurance Act.

2. Expediting resolution of grievances. To effectively deter unscrupulous
individuals or organizations, there is a need to expedite the processing of
grievances within the grievance machinery under the National Health
Insurance Act. This bill seeks to shorten the length of time within which
Local Health Insurance Offices decide on complaints and the period within
which to appeal such decisions to the Board.


3. Classification of abuses and unethical practices. This bill seeks to identify, list
and classify the emerging abuses and unethical practices that tends to defeat
the objectives of the NHIP and provides for corresponding penalties for the
commission of such offenses.

4. Increase in penalties. The bill also seeks to increase the penalty from P
10,000 to P 50,000 to P 50,000 to P 100,000 against erring health care
providers.

5. Inclusion of 60-day filing period. Another proposed amendment is the
inclusion of a 60-day filing period within which hospitals must file their
claims from date of discharge of their patients.

In view of the foregoing, the early passage of this bill is earnestly sought.

(why,
peti GARIN, M.D.


Republic of the Phitippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
FIRST REGULAR SESSION

HOUSE BILLWNo,__102

Introduced by Honorable Janette L. Garin, M.D.

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 AM! =D, AND FOR OTHER PURPOSES”

Be it 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:
x
“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 TC EARN A L.iVING, PARTICULARLY
UNINCORPORATED HOUSEHOLD ENTERPRISES THAT ARE MARKET
AND NON-MARKET PRODUCERS OF GOODS AS WELL AS MARKET
PRODUCERS OF SERVICES. TO TIS SECTOR BELONG, AMONG
OTHERS, STREET HAWKERS, MARKET VENDORS, PEDICAB AND
TRICYCLE DRIVERS, SMALL CONSTRUCTION WORKERS AND HOME-
BASED INDUSTRIES AND SERVICES.

Seek
SEC. 2. Section 16 of the same Ac

“SEC. 16. Powers and Furwt

nded to read as follows:
‘ation shall have the
following powers and functions:

MX x


“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;

ox x

“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;] "

“xx xe
SEC.3.Section 18 of the same Act, as amended, is hereby further

amended to read as follows:

“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 Matiager 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.

"x x"

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

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

“g) 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].

fee x
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 BOAKD.”

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].

tex xf
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.


1. 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
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):
“1)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

“5) 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 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-O!
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 JLLNESS OR UNDERWENT A COMPENSABLE
PROCEDURE; bes
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;

*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;

“y) 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):



“{) 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;

“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 RENDERED/GIVEN.

“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:

“j) 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;

"D) PERIOD "RO 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)/CHIEF 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.

Il, 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 (PS0,000.00) 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 PROFESSIGNAL FOUND TO HAVE COMMITTED ANY
BREACH OF WARRANTIES OF



"3) ABUSES AND UNETHICAL PRACTICES - ANY HEALTH CARE
PROFESSIONAL SHALL BE LiA\ FOR THE FOLLOWING ABUSES
AND UNETHICAL PRACTICES:

“i) PERFORMANCE OF PRCCEDURES BEYOND THOSE ALLOWED

BY THE HEALTH PROFESSIONAL’S QUALIFICATIONS AND TRAINING
EXCEPT WHEN UNDER THE DIRECT SUPERVISION OF A QUALIFIED
HEALTH CARE PROFESSIONAL;
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. 7

“A)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 OK UNDERWENT A COMPENSABLE
PROCEDURE;

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

“Sii) 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 (81% WHEN THE HOSPITAL



CHARGES AND PROFESSIONAL FEES ARE FULLY PAID IN ADVANCE
BY THE ee PERIOD OF THIRTY (30) DAYS FROM
THE DATE OF RE 'T OF REFUND CHECK FROM THE
CORPORATION;

“y) 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.

“S) 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.

“iil. 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 AND/OR A FINE OF FIVE THOUSAND PESOS
(P5,000.00).

“B)CRIMINAL LIABILITY = —
COMPLAINT SHALL B iD AGAINS’
OFFICE OF THE PROSECUTOR

§N ADDITION, A CRIMINAL
?HE MEMBER BEFORE THE
THE ABOVEMENTIONED



VIOLATIONS WHICH CARRY A PENALTY OF IMPRISONMENT OF NOT
LESS THAN SIX (6) MONTHS BUT NOT MORE THAN ONE (1) YEAR.
ad
“IV. OFFENSES OF EMPLOYERS

“A)FAILURE/REFUSAL TO REGISTER/DEDUCT/REMIT THE
CONTRIBUTIONS - ANY EMPLOYER WHICH FAILS OR REFUSES TO
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)] (P5,000.00} 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 commis: of the said act shall be liable for

T laws for the offense.
BY EMPLOYEES OF THE
CORPORATION - Any er

tion 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 corisent, 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.

“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:

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

“{) VOLUNTARY ADMISSION OF GUILT;

“ii) GOOD TRACK RECORD;

“ii) 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:

“{) PREVIOUS CONVICTION OF 4
IN THIS ACT;

OFFENSE, AS PROVIDED FOR



“ji) 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 (P50,000.60) 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 (P 100,000.00).

“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-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,

“VII. 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.

“VIII. 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 GFFICER, 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

“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.

“XII. 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 ORA
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,