Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City, Metro Manita

Fifteenth Congress
First Regular Session

Introduced by Hon. Lorenzo R. Faiiada HY and Ron. Daisy Avance-Fuentes

EXPLANATORY NOTE

‘Yn bis first Sume of the Nation Address (SGNA} barely a week ago, President Benigne S_
Aquino HY announcod teat the government vision of pushing Philhcalth coverage a the maxinmum is st
hand. He highlighted the impending completion of DSWD’s National Household Targeting Sysem
¢NHTS) as the appropriate jumping board 10 wuly extend the Philhealth coverage of the couaty’s ponvest
of the poor.

‘Tho emphasis os the universal coverage of Phillcalth is well-plaocd After all. this is jusr i
keeping with Sec. 11, Anicie XUfi of the 1987 Constionion, whick mandates that “dhe State shall adoptan
integrated and comprehensive approach io healtl: development which shall endeavor to make essesiial
goods, health and otter social services available to afl people at affordable cost.” The seme provision of
the Coustitution also prevites that “there shell be priority: for the necds of the underprivileged sick
viderly, disabled. ‘women, and chiltren. The Stae shai? endeavor ia provide free medical care i
paupers~

In spite of the constitutional policy. Bowever, fre cracks in te foundations pon which we have
‘built car nation’s develupment are revedied by uur health indicators. Nowhere else do we find the
yawning socio-economic disparities displayed sn glaringly. Those sectors of our population with higher
‘incomes, whe are in bewer health and hence have less need for health care services, are the only anes that
Rave:access to.them: while the poor gaffer their sickness in silence. There-is therefore's aon impor: we
‘direct public: health expenditure te levels that uly reflect our commitment to provide all Fi ipities with
frase health: care:

As of 2008, ADB notes that government oxpenditares on health in the country comprised s pelery
0.8% of our GDP — well below Malaysia's 1.8% and Thaitand’s 1.7%. Sven Cambodie came ahead of us
in this sespect, devoting 0.8% of its GDP forhealth services.

fn ic: 2007 and 2620 appropriations, the goverment aHoomed a total of P¥O billion far
Phitheatit's sponsored program for indigent Fitipinos. The Figure is misicading, though, as. overall
goverment spunding in healt has experienced’ a steadily decfine over the last years. Local government
spending failed miserably to compensate for the Impe slashes in health expenditure made by the national
government. Furtticrmore, out of the total amount allocated for public health expenditure, the portion
Spent on social health msurance is ata dismal 11%. The result is that cur health-care system has become
heavily indebwdto otof-pocket spending, which offzctively marginulizes the vast majority who do net
shave the sort of disposable income to spend on Keath insurance.


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H.B. NO. 2174

indeed, there is no heticr time than naw to extend coverage af health insutance fo the vailhions af
Poor Filipinos who do. not have access 19 hesiiir facilities. otherwise. This.is not just a matter of sound
governance but onc of social solidarity. With 70% of cur population considceed as living in dire poverty.
there is all the more season for the nate w seep in and effort = more equitable distribution of access 10
health care: Numerous studies show that 2 significant eumber of Filipinos do not have the kind of access
they need to meet the standard of adequate well-beimg. This mnslates directly to health indicators. For
instance, low-income mal communities like Bicol, Samar and ARMM bave indicators mirroring these of
the Jeast developed countics, with fife cxpectancy at birth undor 6 years, infant. and child movtaliy
‘haver around 90. and matemal mortality at an alarming $50, When compared to the more affluest wlan
‘centers ‘suck 45 Metro Manila, Cébu and'Davso, the disparity is cause for dismay: richer areas with the
fost equalized access te health care ficitities evince manbers closely approaching those in developed
‘countries: the average life oxpoctancy at birth is aver 80 years, infant and child moctalty is at Toss than
10, while matemal morality is at iess than 15,

Extending Philhesith coverage to-the country’s lowest income eamers is but ane goal of this bill,
‘This measure imtenils to rework the Charter of the Philippine Healthy Insurance Corporation in onder so
tailor both its imemal orgonization and its beslth care delivery system to the changing demands of our
nation’s development. By doing so, it is hoped that we will bring the corporation away from a
commercially-dominaied mindset with a concern only for profit, and 3 step closer to the fulfillment of its
real mandate, that of giving all Filipinos access to their right to health and a quality life.

Urgent consideration and approval of this meauure isin onder, As representatives of our penple,
we owe all of our constituents this much. Indeed, they deserve nathing less than wniversal health care,
We, therefore, urge ali of our colicagues te transtorm this bill into one of the carly comerstones of the 13
Compress.

a ‘Quezon Province

HON. DAISY A FUENTES.
2” District, Stith Catster


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Republic of the Philippines
HOUSE OF REPRESENTATIVES

FIFTEENTH CONGRESS
First Regular Session

House BillNo, 2174

Introduced by HON. LORENZO R. TANADA III and HON. DAISY AVANC

AN ACT AMENDING REPUBLIC ACT NO. 7875 OTHERWISE KNOWN AS THE
NATIONAL HEALTH INSURANCE ACT OF 1995 AS AMENDED, AND FOR OTHER,
PURPOSES

Be it enacted by the Senate and the House of Representatives in Congress assembled:

SECTION 1. Section 4, Article Il of Republic Act No. 7875, is hereby further amended by
adding the following definitions accordingly.

“SEC. 4. Definition of Terms. — For the purpose of this Act, the following terms shall be
defined as follows:

x zs x

C) BIOLOGICALS OR BIOLOGICAL PRODUCTS - REFERS TO ANY PRODUCT OF
BIOLOGICAL ORIGIN, PREPARED BY BIOLOGICAL PROCESSES, DERIVED FROM
HUMAN BLOOD AND PLASMA, OR MANUFACTURED BY BIOTECHNOLOGY,
CONSISTING OF SUBSTANCES OF HIGHER MOLECULAR WEIGHT WHOSE PURITY,
POTENCY AND COMPOSITION CANNOT READILY AND RELIABLY BE
DETERMINED BY CHEMICAL OR PHYSICOCHEMICAL ANALYSIS.

x x x

M) FAIR PRICE — REFERS TO THE RESULT OF THE CORPORATION’S
NEGOTIATION IN BEHALF OF ITS MEMBERS AND ADEQUATELY FUNDED HEALTH
PROVISIONS, WHICH PRICE SHALL BE DETERMINED BY THE CORPORATION
TOGETHER WITH THE DEPARTMENT OF HEALTH’S NATIONAL CENTER FOR
PHARMACEUTICAL ACCESS AND MANAGEMENT (NCPAM), IN ACCORDANCE
WITH THE MECHANISM PROVIDED FOR UNDER SECTION 38 OF THIS ACT.

5 x x

s) Indigent — A person who has no visible means of income, or whose income is
insufficient for the subsistence of his/ HER family[.] as identified by THE DEPARTMENT OF
SOCIAL WELFARE AND DEVELOPMENT (DSWD) BASED ON NATIONAL
HOUSEHOLD TARGETTING SYSTEM (NHTS) FOR POVERTY REDUCTION OR ANY
OTHER TOOL THAT THE DEPARTMENT MAY LATER DETERMINE TO BE THE MOST
EFFIC! MEANS OF TARGETTING THE POOR FOR DIRECT GOVERNMENT
ASSISTANCE.

T) INFORMAL SECTOR — REFERS TO HOUSEHOLD UNINCORPORATED
ENTERPRISES WHICH CONSIST OF BOTH INFORMAL OWN-ACCOUNT
ENTERPRISES AND ENTERPRISES OF INFORMAL EMPLOYERS.


HB. NO. 2174

BF Seem nu ausene

INFORMAL. OWN-ACCOUNT ENTERPRISES ARE HOUSEHOLD
UNINCORPORATED ENTERPRISES OWNED AND OPERATED BY OWN-ACCOUNT
WORKERS, EITHER ALONE OR IN PARTNERSHIP WITH MEMBERS OF THE SAME OR
OTHER HOUSEHOLDS WHICH MAY EMPLOY UNPAID FAMILY WORKERS AS WELL.
AS OCCASIONALLY/SEASONALLY HIRED WORKERS BUT DO NOT EMPLOY
EMPLOYEES ON A CONTINUOUS BASIS.

ENTERPRISES OF INFORMAL EMPLOYERS ARE HOUSEHOLD
UNINCORPORATED ENTERPRISES OWNED AND OPERATED BY OWN-ACCOUNT
WORKERS, EITHER ALONE OR IN PARTNERSHIP WITH MEMBERS OF THE SAME OR
OTHER HOUSEHOLDS WHICH EMPLOY ONE OR MORE EMPLOYEES ON A
CONTINUOUS BASIS.

x x x

V) LOW-INCOME INFORMAL SECTOR - REFERS TO INDIVIDUALS ENGAGED IN
HOUSEHOLD UNINCORPORATED ENTERPRISES THAT THE DSWD, IN
COORDINATION WITH THE NSCB MAY DEFINE, CLASSIFY, OR ALSO CONSIDER AS
INDIGENT OR LOW-INCOME UNITS OR INDIVIDUALS; PROVIDED: THAT THE
DSWD, IN COORDINATION WITH THE NSCB, SHALL ESTABLISH THE LIST OF
INFORMAL BUSINESSES, ENTERPRISES OR UNDERTAKINGS THAT WILL
COMPRISE THE SECTOR BEING DEFINED HEREIN; AND, PROVIDED FURTHER:
THAT THE DSWD, IN COORDINATION WITH THE NSCB, MAY, FROM TIME TO TIME,
REVISE OR UPDATE SAID LIST IN CONSULTATION WITH THE CONGRESSIONAL
OVERSIGHT COMMITTEE ESTABLISHED FOR THE PURPOSES OF THIS ACT.

W) MEDIAN PRICE — REFERS TO THE RATIO OF LOCAL PRICE TO THE
INTERNATIONAL REFERENCE PRICE (IRP) CONVERTED INTO THE SAME
CURRENCY. THE INTERNATIONAL REFERENCE PRICE SHALL PRETAIN TO THE
MEDIAN OF RECENT PROCUREMENT SUPPLY PRICES OR TENDER PRICES
OFFERED BY SUPPLIERS TO DEVELOPING COUNTRIES FOR MULTI-SOURCE
PRODUCTS, AS RECOMMENDED BY THE WORLD HEALTH ORGANIZATION.

x By x

DD) PHARMACEUTICALS OR PHARMACEUTICAL PRODUCTS - REFERS TO ANY
PREPARATION FOR HUMAN USE THAT IS INTENDED TO MODIFY OR
EXPLOREPHYSIOLOGICAL SYSTEMS OR PATHOLOGICAL STATES FOR THE
BENEFIT OF THE RECIPIENT.

Il) PROGRESSIVE PREMIUM CONTRIBUTION — REFERS TO A SLIDING SCALE
OF PREMIUM CONTRIBUTION DIRECTLY PROPORTIONAL TO ONE’S INCOME
AND/OR EARNINGS.

‘The other terms are re-lettered accordingly.”
x x x”
SEC. 2. Section 6 of the same Act is hereby further amended to read as follows:

“Sec. 6. Coverage. - All citizens of the Philippines shall be AUTOMATICALLY
ENROLLED AND covered by the National Health Insurance Program. [In accordance with the
principles of universality and compulsory coverage enunciated in Section 2(b) and 2(1) hereof,
implementation of the Program shall, furthermore, be gradual and phased in over a period of not
more than fifteen (1 5) years: Provided, That the Program shall not be made compulsory in
certain provinces and cities until the Corporation shall be able to ensure that the members in such
localities shall have reasonable access to adequate and acceptable health care services, “]


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SEC. 3. Section 7 of the same Act is hereby further amended to read as follows:

“Sec. 7. Enrollment. -The Program shall AUTOMATICALLY enroll ALL CITIZENS
OF THE PHILIPPINES AS beneficiaries in order for them to be placed under coverage that
entitles them to avail of benefits with the assistance of the financial arrangements provided by
the Program. [The process of enrollment shall include the identification of beneficiaries, issuance
of appropriate documentation specifying eligibility to benefits, and indicating how membership
was obtained or is being maintained. The enrollment shall proceed in accordance with these
specific policies:

a) all persons currently eligible for benefits under Medicare Program I, including SSS and
GSIS members, retirees, pensioners and their dependents, shall immediately and
automatically be made members of the National Health Insurance Program;

b) all persons eligible for benefits through health insurance plans established by local
governments as part of Program II of Medicare or in accordance with the provisions of
this Act, including indigent members, shall also be enrolled in the Program;

©) all persons eligible for benefits through health insurance plans established by local
governments as part of Program II of Medicare or in accordance with the provisions of
this Act, including indigent members, shall also be enrolled in the Program; and

d) all persons eligible for benefits as members of other government-initiated health
insurance programs, community-based health care organizations, cooperatives, or private
non-profit health insurance plans shall be enrolled in the Program upon accreditation by
the Corporation which shall devise and provide incentives to ensure that such accredited
organizations will benefit from their participation in the program.

All indigents not enrolled in the Program shall have priority in the use and availment of the
services and facilities of government hospitals, health care personnel, and other health
organizations: Provided, however, That such government health care providers shall ensure that
said indigents shall subsequently be enrolled in the Program.]

SEC. 4. Section 8 of the same Act is hereby further amended to read as follows:

“SEC. 8. Health Insurance ID Card ~ {In conjunction with the enrollment provided
above, t] The Corporation SHALL ENLIST ALL FILIPINOS AS MEMBERS OF THE
PROGRAM AND through its local office [shall], issue a health insurance ID which shall be used
for purposes of identification, eligibility verification, and utilization recording. The issuance of
this ID card shall be accompanied by a clear explanation to the enrollee of his rights, privileges
and obligations as a member. A list of health care providers accredited by the Local Health
Insurance Office shall likewise be attached thereto.

THE ID CARD SHOULD BE IN A FORM PRESCRIBED BY THE CORPORATION
AND IN NO CASE SHALL IT BEAR ANY PICTURE, SEAL, OR EMBLEM THAT
IDENTIFIES A GOVERNMENT OFFICIAL OR POLITICAL PARTY.

SEC. 5. Section 10 of the same Act is hereby further amended to read as follows:

“SEC. 10. Benefit Package. — Subject to the limitations specified in this Act and as
may be determined by the Corporation, the following categories of personal health services
granted to the member or his dependents as medically necessary or appropriate, shall
include:

x x x

B) Outpatient care:
1. services of health care professionals;
2. diagnostics, laboratory, and other medical examination services;
3. personal preventive services; and
. 4. prescription drugs and biological, subject to the limitations described in SECTION 38
of this Act;


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SEC. 6. Section 16 of the same Act is hereby further amended to read as follows:

“SEC. 16. Powers and Functions. - The Corporation shall have the following powers and
functions:

x x 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;

x x x

j) to negotiate and enter into contracts with health care institutions, professionals, and
other persons, juridical or natural, regarding pricing, payment mechanisms, design and
implementation of administrative and operating systems and procedures, financing, and delivery
of health services IN BEHALF OF ITS MEMBERS;

x x 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 records AS WELL AS 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];

x x x

(q) TO CONDUCT REGULAR PRICE MONITORING, IN COORDINATION WITH
THE DEPARTMENT OF HEALTH’S NATIONAL CENTER FOR PHARMACEUTICAL
ACCESS AND MANAGEMENT, OF ALL DRUGS AND BIOLOGICALS LISTED IN THE
PHILIPPINE NATIONAL DRUG FORMULARY OR COVERED BY ANY EXISTING
BENEFIT PACKAGE OR REIMBURSABLE LIST OF THE NATIONAL HEALTH
INSURANCE PROGRAM;

(R) TO DETERMINE AND ESTABLISH TOGETHER WITH THE DEPARTMENT
OF HEALTH’S NATIONAL CENTER FOR PHARMACEUTICAL ACCESS AND
MANAGEMENT THE FAIR PRICE FOR THE LISTED DRUGS AND BIOLOGICALS
BEING MONITORED;

(S) TO DISSEMINATE THE DETERMINED FAIR PRICE OF DRUGS AND
BIOLOGICALS TO THE GENERAL PUBLIC, NATIONAL AND LOCAL GOVERNMENT
AGENCIES, HEALTH INSTITUTIONS AND THE HEALTH INDUSTRY;

(T) TO CONDUCT POST-AUDIT ON QUALITY OF SERVICES RENDERED BY
HEALTH CARE PROVIDERS;

(U) TO MONITOR AND CHECK COMPLIANCE OF REGULATORY AGENCIES
TO THE REQUIREMENTS OF SUBPARAGRAPH (B) OF SECTION 11 AS PROVIDED
HEREIN AND CARRY OUT NECESSARY ACTIONS TO RESOLVE NON-COMPLIANCE;

(V) TO ENLIST AT LEAST NINETY PERCENT (90%) OF THE TOTAL
POPULATION ONE YEAR AFTER THE IMPLEMENTATION OF THIS ACT:


H.B. NO. 2174

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(W) TO ORGANIZE AWARENESS PROGRAM AND/OR DISCUSSION ON PHIC
BENEFITS IN PUBLIC AND PRIVATE SCHOOLS, COLLEGES AND UNIVERSITIES IN
SUPPORT OF SUB-PARAGRAPH (V) AND DETERMINE IN SAID OCCASIONS WHO
ARE NOT YET COVERED IN THE PROGRAM;

(X) TO ISSUE PROVISIONAL PHILHEALTH MEMBERSHIP CARDS FOR THOSE
IDENTIFIED IN SUB-PARAGRAPH (W) AS NOT YET COVERED;

(Y) TO REQUIRE HOSPITALS TO ENLIST AND ISSUE PROVISIONAL
PHILHEALTH CARDS TO PATIENTS IDENTIFIED AS NOT YET COVERED BY THE
PROGRAM UPON DISCHARGE, IN COORDINATION WITH THE CORPORATION;

(Z) TO MANDATE HEALTH CARE SERVICE PROVIDERS TO REPORT PER
PATIENT DISCHARGED A MINIMUM SET OF INFORMATION AS MAY BE
DETERMINED BY THE CORPORATION; AND

(AA) To perform such other acts as it may deem appropriate for the attainment of the
objectives of the Corporation and for the proper enforcement of the provisions of this Act.

x x rs
SEC. 7. Section 18 of the same act, 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 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 ACCREDITED NATIONAL ASSOCIATIONS.

The Secretary of Health shall be the ex officio Chairperson while the President of the
Corporation shall be the Vice Chairperson of the Board.

THE CHAIRPERSON OF THE BOARD SHALL BE SUPPORTED BY THE OFFICE
OF THE CHAIR WHICH SHALL BE COMPOSED OF A MAXIMUM OF THREE STAFFS,
AMONG WHICH IS AN OFFICIAL OF THE HEALTH POLICY DEVELOPMENT AND
PLANNING BUREAU (HPDPB) OF THE DEPARTMENT OF HEALTH.

THE CHAIRPERSON SHALL ESTABLISH COMMITTEES UNDER HIS OFFICE,
WHENEVER NECESSARY, TO ENSURE THE IMPLEMENTATION OF PUBLIC HEALTH
POLICIES.

x x x”


=

NOURWN

H.B. NO. 2174
SEC. 8. Subsection (a) of Section 19 of the same Act, is 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 recommendation of the Board. The President [shall not be removed from
office except in accordance with existing laws] MAY BE REMOVED FOR CAUSE BY THE
PRESIDENT OF THE PHILIPPINES, UPON RECOMMENDATION OF THE BOARD.

x x x

SEC. 9. Section 23 of the same Act, is hereby amended BY ADDING TWO (2)
SUBSECTIONS, NAMELY (S) AND (T) to read as follows:

23. Functions. - Each Office shall have the following powers and functions:
Ed x

(S) TO CONDUCT AN INFORMATION CAMPAIGN ON THE BENE!
PACKAGES PROVIDED BY THE CORPORATION AND ON THE MECHANISMS TO.
AVAIL OF THE SAME; AND.

(T) TO MAINTAIN AND SECURE AN ELECTRONIC DATABASE OF ALL ITS
MEMBERS,

SEC. 10. Section 26 of the same Act, is hereby amended to read as follows:

“Sec. 26. Financial Management. - The use, disposition, investment, disbursement,
administration and management of the National Health Insurance Fund, including any subsidy,
grant or donation received for program operations shall be governed by resolution of the Board
of Directors of the Corporation, subject to the following limitations:

a.) All funds under the management and control of the Corporation shall be subject to all
rules and regulations applicable to public funds.

b.) The Corporation is authorized to charge FROM the various funds under its control [for]
the costs of administering the Program. Such costs may include administration,
monitoring, marketing and promotion, research and development, audit and evaluation,
information services, and other necessary activities for the effective management of the
Program. The total annual costs for these shall not exceed [twelve] EIGHT percent
[(12%)] (8%) of the total [contributions] REIMBURSEMENTS MADE BY THE
CORPORATION FOR THE CURRENT YEAR [, including government contributions to
the Program and not more than three percent (3%) of the investment earnings collected
during the immediately preceding year. |

SEC. 11. Section 28 of the same Act, is hereby amended to read as follows:

“Sec. 28 Contributions. - All members of the Program shall contribute to the Fund, in
accordance with a reasonable, equitable and progressive contribution schedule to be determined
by the Corporation on the basis of applicable actuarial studies and in accordance with the
following guidelines:

a) Formal sector employees [and current Medicare members] and their
employers shall [continue paying the same monthly contributions as provided
for by law until such time that the Corporation shall have determined the
contribution schedule mentioned herein: Provided, That their monthly
contribution shall not exceed three percent of their respective monthly
salaries] PAY A PROGRESSIVE PREMIUM CONTRIBUTION IN
ACCORDANCE WITH A SCHEDULE OF RATES TO BE DETERMINED
BY THE CORPORATION, IN CONSULTATION WITH A

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CONGRESSIONAL OVERSIGHT COMMITTEE CREATED FOR THE
PURPOSES OF THIS ACT. PROVIDED THAT THE RATE OF PREMIUM
CONTRIBUTION SHALL NOT BE MORE THAN FIVE PERCENT (5%)
OF THE EMPLOYEES MONTHLY SALARY. PROVIDED FURTHER
THAT THE IMPLEMENTATION OF THIS SECTION SHALL BE
GRADUAL FOR A PERIOD OF THREE (3) YEARS AND SHALL ONLY
BEGIN UPON CERTIFICATI( THE CHAIRPERSON OF THE
BOARD THAT THERE HAS BI STANTIAL IMPROVEMENT OF
PHIC BENEFITS FROM THE IMPLEMENTATION OF THIS ACT;

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Contributions from [self-employed members] THE INFORMAL SECTOR
shall be based primarily on household earnings and assets; [their total
contributions for one year shall not, however, exceed three percent (3%) of
their estimated actual net income for the-preceding year.] PROVIDED THAT
FOR PURPOSES OF COMPUTING THE PREMIUM CONTRIBUTION OF
THE INFORMAL SECTOR MEMBER WHOSE PRACTICE OF
PROFESSION REQUIRES REGULATORY LICENSES AND/ OR
PERMITS, HE/SHE SHALL BE ASSESSED AS A MIDDLE INCOME
EARNER UNLESS PROVEN OTHERWISE. PROVIDED FURTHER
THAT THE REGULATORY AGENCIES CONCERNED WILL ONLY
ISSUE THE SAID LICENSES AND/OR PERMITS, OR RENEW THE
SAME, UPON SUBMISSION OF PROOF THAT THE CURRENT YEAR’S
PREMIUM PAYMENTS TO PHIC HAVE BEEN MADE. ‘HE
REGULATORY AGENCIES’ FAILURE TO MAKE PHIC PAYMENTS A
PRE-REQUISITE TO THE ISSUANCE OR RENEWAL OF THE
NECESSARY LICENSES AND/OR PERMITS SHALL BE CONSIDERED
A VIOLATION OF THIS ACT AND SHALL SUBJECT OFFICIALS OF
SAID REGULATORY AGENCIES: TO APPROPRIATE,
ADMINISTRATIVE LIABILITY. PROVIDED FINALLY THAT
MEMBERS FROM THE LOW-INCOME INFORMAL SECTOR AS
DEFINED IN SUBPARARGRAPH (V) OF SEC. 4 OF THIS ACT, WHAT
SHOULD HAVE BEEN CONTRIBUTED BY THE EMPLOYER IF THEY
WERE ENROLLED UNDER PARAGRAPH (a) OF THIS SECTION
SHALL BE SUBSIDIZED BY THE NATIONAL GOVERNMENT.

©) [Contributions made in behalf of indigent members shall not exceed the
minimum contributions set for employed members.]

SEC. 12. Section 29 of the same Act, is hereby amended to read as follows:

“SEC, 29. Payment for Indigent Contributions. - Contributions for indigent members
shall be subsidized ENTIRELY BY THE NATIONAL GOVERNMENT. PROVIDED THAT
THE LOCAL GOVERNMENT UNIT WHERE THE INDIGENT MEMBER RESIDES SHALL
PAY FOR A SUPPLEMENTARY BENEFIT PACKAGE FOR THE SAID MEMBER.
ALLOCATION FOR THE ENROLLMENT OF INDIGENTS SHALL BE APPROPRIATED IN
THE GENERAL APPROPRIATIONS ACT AS A SEPARATE LINE ITEM IN. THE
DEPARTMENT OF HEALTH BUDGET.[partially by the local government unit where the
member resides. The Corporation shall provide counterpart financing equal to the LGU’s subsidy
for indigents: Provided, That in the case of fourth, fifth and sixth class municipalities, the
National Government shall provide up to ninety percent (90%) of the subsidy for indigents until
such time that they shall have been upgraded to first, second or third class municipalities. The
share of the LGU’s shall be progressively increased until such time that its share becomes equal
to that of the National Government. ]

SEC. 13. Section 31 of the same Act, is hereby amended to read as follows:

“See. 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

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H.B. NO. 274

z ACCREDIT ANY HEALTH CARE PROVIDER WITH PENDING AMINISTRATIVE OR
2 CRIMINAL CASES OR THOSE METED WITH FINAL JUDGMENTS FOR ANY
3 VIOLATION OF THIS ACT.”

¢ SEC. 14. Section 34 of the same Act, is hereby amended to read as follows:

5 “Sec. 34. Provider Payment Mechanisms. - The following mechanisms for public and
6 private providers shall be allowed in the Program:

7 a) Fee for service based on mechanisms established by the Corporation PROVIDED THE
8 CORPORATION NEGOTIATES FEES IN BEHALF OF ITS MEMBERS ;

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B) CASE BASED PAYMENTS WITH MECHANISMS DETERMINED BY THE
10 CORPORATION;

at C) Capitation of health care professionals and facilities, or network of the same, including
12 HMOs, medical cooperatives, and other legally formed health service groups;

13 D) A combination of both; and

at E) Any or all of the above, subject to global budget.

15

IN ANY OF THE FOREGOING, BALANCE BILLING SHOULD ONLY BE ALLOWED FOR
16 AMENITIES AND FOR SERVICES VOLUNTARILY CHOSEN BY THE MEMBER.

a7 THE CORPORATION MAY ADOPT ANOTHER MECHANISM NOT PROVIDED ABOVE
18 AS LONG AS IT WILL BE THE MOST BENEFICIAL TO PROVIDE MAXIMUM
19 SERVICES TO ALL, SUBJECT TO THE APPROVAL OF THE BOARD.

20 Bach Office shall recommend the appropriate payment mechanism within its jurisdiction for
21 approval by the Corporation. Special consideration shall be given to payment for services
22 rendered by public and private health care providers serving remote or medically underserved
23 areas.

a4 SEC. 15. Section 38 of the same Act, is hereby amended to read as follows:

25 “Sec. 38. Safeguards Against Over and Under Utilization AND OVERPRICING OF
26 DRUGS AND BIOLOGICALS ~ It is incumbent upon the Corporation to set up a monitoring
27 mechanism to be operationalized through a contract with health care providers AND IN
28 CONSULTATION WITH THE PATIENTS’ GROUPS, CIVIL SOCIETY ORGANIZATIONS,
29 AND OTHER STAKEHOLDERS to ensure that there are safeguards against:

30 a) Over-utilization of services;

31 b) Unnecessary diagnostic and therapeutic procedures and intervention;

32 ¢) Irrational medication and prescriptions;

33 4) Under-utilization of services; [and}

34 €) Inappropriate referral practices; AND

35 f) OVERPRICING OF DRUGS AND BIOLOGICALS

36 The corporation may deny or reduce the payment for claims when such claims are
33 _ attended by false or incorrect information and when the claimants fail. without justifiable cause,

to comply with the rules and regulations of this act.

39 THE CORPORATION IN COMPLIANCE WITH THE PRINCIPLES OF
40. RESPONSIVENESS, EFFECTIVENESS, AND FIDUCIARY RESPONSIBILITY AS STATED
41 IN SEC. 2 OF REPUBLIC ACT NO. 7875 AND THIS ACT, IS HEREBY MANDATED TO
42 DESIGN AND IMPLEMENT POLICIES, PROCEDURES AND OTHER MEASURES TO
43 ENSURE THAT ONLY FAIR-PRICES DRUGS AND BIOLOGICALS ARE. QUALIFIED AS
44 PART OF ANY BENEFIT PACKAGE UNDER THIS ACT. THE CORPORATION SHALL

8


BY:

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H.B. NO. 2174

ALSO ENSURE THAT NO DISRUPTIONS IN SUPPLY FOR BENEFICIARIES SHALL
OCCUR AS A RESULT OF THESE MEASURES, INCLUDING A POLICY OF COVERING
ALL DRUGS AND BIOLOGICALS DEFINED IN SECTION 37 WITHIN AN EXTENDED
PERIOD OF TIME NOT EXCEEDING SEVEN (7) YEARS.

THE CORPORATION SHALL DETERMINE THE FAIR PRICE OF DRUGS AND
BIOLOGICALS COVERED BY THE PHIC BENEFIT PACKAGE, PERIODICALLY USING
ONE OR MORE OF THE FOLLOWING MECHANISMS:

1. PRICE COMPARISON WITH THREE OR MORE COUNTRIES IN THE ASEAN
REGION THAT ARE RELATIVELY AT PAR WITH THE PHILIPPINES IN
TERMS OF SOCIO-ECONOMIC DEVELOPMENT;

2. PRICE COMPARISONS WITH TRANSACTIONS DONE BY INTERNATIONAL.
BODIES, DONOR AGENCIES, AND OTHER SIMILAR INTERNATIONAL
DEVELOPMENT AGENCIES;

3. PRICE-VOLUME NEGOTIATIONS WITH MANUFACTURERS FOR SINGLE-
SUPPLIER PRODUCTS,

4. USE OF MEDIAN PRICE RATIOS AS RECOMMENDED BY THE WORLD
HEALTH ORGANIZATION; AND

5. OTHER CRITERIA AS MAY BE SET BY THE BOARD IN CLOSE
COORDINATION WITH THE DEPARTMENT OF HEALTH’S NATIONAL
CENTER FOR PHARMACEUTICAL ACCESS AND MANAGEMENT.

THE CORPORATION SHALL ENSURE THE PUBLICATION OF UP-TO-DATE
PRICE LISTINGS OF FAIR PRICES OF DRUGS AND BIOLOGICALS IN VARIOUS
NEWSPAPERS OF NATIONAL CIRCULATION, ON THE CORPORATION’S WEBSITE,
AND POSTERS PROMINENTLY DISPLAYED IN PHARMACIES AND HOSPITALS ON A
REGULAR BASIS. THE CORPORATION SHALL LIKEWISE ENSURE THAT PRINTED
COPIES OF FAIR PRICE LIST ARE DISTRIBUTED TO ALL ACCREDITED HEALTH
CARE INSTITUTIONS AT LEAST ONCE A YEAR.

IN THE DETERMINATION OF FAIR PRICES ABOVE SPECIFIED, THE
CORPORATION SHOULD AT ALL TIMES CONSULT AND HARMONIZE THEIR
PRICING POLICIES AND MEASURES TO THAT OF THE DEPARTMENT OF HEALTH,
THROUGH THE NATIONAL CENTER FOR PHARMACEUTICAL ACCESS AND
MANAGEMENT (NCPAM).

SEC. 16. Section 40 of the same Act is hereby amended by adding subsection (e) to read as
follows:

“See. 40. Grounds for Grievances. ~The following acts shall constitute valid grounds for
grievance action:

x x x
E) ANY ACT OR OFFENSE ENUMERATED IN ARTICLE X OF THIS ACT; AND
F) Any other neglect that tends to undermine or defeat the purposes of this Act.

SEC. 17. Subsections a and b of Section 41 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:

2) 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,

9


Ne

H.B. NO. 2174

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

x x x”
SEC. 18. Article X of the same Act is also amended to read as follows:
Article X. OFFENSES AND Penalties

“SEC. 44. OFFENSES OF INSTITUTIONAL HEALTH CARE PROVIDERS. ~ AN
INSTITUTIONAL HEALTH PROVIDER, after due notice and hearing, shall [suffer the
following penalties] BE PUNISHED WITH A PENALTY OF A FINE OF NOT LESS THAN
FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MORE THAN ONE HUNDRED
THOUSAND PESOS (P100,000.00), SUSPENSION OF ACCREDITATION FROM THREE (3)
MONTHS TO THE WHOLE TERM OF ACCREDITATION OR REVOCATION OF
ACCREDITATION, OR BOTH, AT THE DISCRETION OF THE CORPORATION, UPON A
FINDING THAT IT IS ENGAGED IN ANY OF THE FOLLOWING ACTS OR OMISSIONS:

A. PADDING OF CLAIMS ~ BY FILING A CLAIM FOR PAYMENT FROM THE
NHIP FOR DRUGS, MEDICINES, SUPPLIES, PROCEDURES, SERVICES AND OTHER
BENEFITS WHICH ARE IN EXCESS OF THE BENEFITS ACTUALLY PROVIDED TO A
BENEFICIARY.

B. CLAIMS FOR SERVICES NOT RENDERED AND / OR CONFINEMENTS OF NON-
ADMITTED PATIENTS - BY MAKING IT APPEAR THAT THE PATIENT IS ACTUALLY
CONFINED AND /OR PROVIDED PHILHEALTH-COVERED SERVICES IN THE HEALTH
CARE INSTITUTION / FACILITY OR USES SUCH OTHER MACHINATIONS THAT
WOULD RESULT IN CLAIMS FOR SERVICES NOT RENDERED/GIVEN.

C. EXTENDING PERIOD OF CONFINEMENT - BY:
1, INCREASING THE PERIOD OF ACTUAL CONFINEMENT
OF ANY PATIENT;

2. CONTINUOUSLY CHARTING ENTRIES IN THE DOCTOR'S ORDER, NURSES
NOTES AND OBSERVATION DESPITE ACTUAL DISCHARGE OR ABSENCE
OF THE PATIENTS;

3. SUCH OTHER MACHINATIONS THAT WOULD RESULT IN THE
UNNECESSARY EXTENSION OF CONFINEMENT.

D. ANTE-DATING OF CLAIMS BY ALTERATION, DELETION OR
INTERCALATION OF DATES, IN A CLAIM THAT WOULD OTHERWISE BE DEEMED
PRESCRIBED FOR HAVING BEEN MADE BEYOND SIXTY (60) CALENDAR DAYS
FROM THE DATE OF DISCHARGE OF THE BENEFICIARY.

ANY CLAIM FILED BEYOND THE SIXTY (60) DAY PERIOD SHALL BE DENIED,
EXCEPT UPON GOOD REASONS AS MAY BE DETERMINED SUFFICIENT BY THE
CORPORATION.

E. 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.

WHERE SUCH MISREPRESENTATION LEADS TO DAMAGE TO THE
CORPORATION, THE PENALTY SHALL BE THE MAXIMUM FINE AND REVOCATION
OF ACCREDITATION.


H.B.NO. 2174

Hi F. FILING OF MULTIPLE CLAIMS ~ BY FILING TWO OR MORE CLAIMS FOR A

2 PATIENT FOR THE SAME CONFINEMENT OR ILLNESS, OR MAKES IT APPEAR THAT

3 THE PATIENT HAD BEEN CONFINED FOR TWO OR MORE TIMES AND/OR FOR TWO

4 OR MORE DIFFERENT ILLNESSES.

5 G. UNJUSTIFIED ADMISSION BEYOND ACCREDITED BED CAPACITY ~ BY

6 FILING CLAIMS FOR PATIENTS CONFINED IN EXCESS OF THE ACCREDITED BED

7 CAPACITY AT ANY GIVEN TIME WITHOUT JUSTIFICATION IN THE FORM AND

8 MANNER PRESCRIBED BY THE CORPORATION.

9 H. CLAIMS FOR UNAUTHORIZED SERVICES/PROCEDURES PERFORMED
10 BEYOND ACCREDITATION CAPABILITY OF THE HEALTH CARE INSITUTION/ FACILITY
11 — BY PERFORMING ANY HEALTH CARE SERVICES/ PROCEDURES BEYOND ITS
12 AUTHORIZED CAPABILITY EXCEPT WHEN SUCH SERVICES WERE DONE IN AN
13 EMERGENCY SITUATION / CONDITION TO SAVE LIFE AND REFERRAL TO A
14 HIGHER CATEGORY PROVIDER IS PHYSICALLY IMPOSSIBLE.

45 I. FABRICATION OR POSSESSION OF FABRICATED FORMS AND SUPPORTING

16 DOCUMENTS ~ BY ANY HEALTH CARE PROVIDER WHO IS FOUND PREPARING

17 CLAIMS WITH MISREPRESENTATIONS OR FALSE ENTRIES, OR TO BE IN

18 POSSESSION OF CLAIM FORMS AND OTHER DOCUMENTS WITH FALSE ENTRIES.

19 J. ABUSES AND UNETHICAL PRACTICES - ANY HEALTH CARE PROVIDER

20 SHALL BE LIABLE FOR THE FOLLOWING ABUSES AND UNETHICAL PRACTICES

an 1, UNSAFE OR DANGEROUS PRACTICES AS MAY BE DETERMINED BY

22 ‘THE CORPORATION;

23 2. IRRATIONAL OR UNNECESSARY DRUG USE;

24 3. UNNECESSARY PERFORMANCE OF DIAGNOSTIC OR THERAPEUTIC

25 PROCEDURES;

26 4, CHARGING OR COLLECTING FROM A MEMBER AN AMOUNT IN

27 EXCESS OF THE BENEFITS INCLUDINGTHOSE COVERED BY

28 CAPITATION OR GLOBAL BUDGETS FOR PHILHEALTH-COVERED

29 SERVICES AND SUPPLIES WHICH PROHIBITS CHARGING OF OUT-OF-

30 POCKET PAYMENT INCLUDING OUTSIDE PURCHASES OF MEDICINES,

31 SUPPLIES AND HEALTH CARE SERVICES THAT ARE INCLUDED IN

32 THE BENEFIT;

a8 5, ENROLLMENT AND / OR RECRUITMENT OF A PERSON FOR THE SOLE

34 PURPOSE OF CLAIMING BENEFITS AND I 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

37 THE OWNERS RELATIVE WITHIN THE FOURTH CIVIL DEGREE OF

38 CONSANGUINITY OR AFFINITY; AND,

39 6. ALL SUCH OTHER ABUSES AND UNETHICAL PRACTICES AS MAY BE

40 DETERMINED BY THE CORPORATION.

41 K. OTHER FRAUDULENT ACTS - ANY HEALTH CARE PROVIDER SHALL ALSO

42 BE LIABLE FOR THE FOLLOWING FRAUDULENT ACTS:

43 1. MAKING IT APPEAR THAT THE PATIENT SUFFERED FROM

44 COMPENSABLE ILLNESS OR UNDERWENT A COMPENSABLE

45 PROCEDURE;


Re

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1.
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H.B. NO. 2174

2. FAILURE OR REFUSAL TO GIVE THE BENEFITS DUE TO QUALIFIED
MEMBERS/ DEPENDENTS;

3. CHARGING QUALIFIED PATIENTS FOR MEDICINES AND/OR SERVICES
WHICH ARE LEGALLY CHARGEABLE TO AND COVERED BY THE
NHIP;

4, 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 A PERIOD OF THIRTY (30) DAYS FROM THE DATE
OF RECEIPT OF REFUND CHECK FROM THE CORPORATION,

5, FAILURE OR REFUSAL TO ACCOMPLISH AND SUBMIT THE REQUIRED
FORMS IN CONNECTION WITH NUMBER 4;

6. FAILURE OR REFUSAL TO PROVIDE THE MEMBERS WITH THE
REQUIRED FORMS FOR DIRECT FILING OF CLAIMS, BILLING
STATEMENTS, OFFICIAL RECEIPTS AND OTHER DOCUMENTS
REQUIRED/ NECESSARY FOR FILING OF CLAIMS; OR

7. DELIBERATE FAILURE OR REFUSAL TO COMPLY WITH THE
REQUIREMENTS UNDER THIS ACT.

L. BREACH OF THE WARRANTIES OF ACCREDITATION — BY COMMITTING ANY
OTHER WILLFUL OR NEGLIGENT ACT OR OMISSION WHICH TENDS TO
UNDERMINE OR DEFEAT THE OBJECTIVES OF THE NHIP.

M. OTHER VIOLATIONS - ANY OTHER ACT OF ANALOGOUS NATURE AS
ABOVE ENUMERATED.

NN. CRIMINAL LIABILITY - IN ADDITION, A CRIMINAL COMPLAINT SHALL BE
FILED AGAINST THE OFFICIALS 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

SEC. 45. OFFENSES OF HEALTH CARE PROFESSIONALS ~ SUB PARARAPHS (E),
(L), (M) AND (N) OF SEC. 44 OF THIS ACT SHALL EQUALLY APPLY TO A HEALTH
CARE PROFESSIONAL WITH THE SAME PENALTIES AS THAT IMPOSED IN SAID
SEC. 44.

IN ADDITION, A HEALTH CARE PROFESSIONAL SHALL ALSO BE HELD
LIABLE FOR THE FOLLOWING ABUSES AND UNETHICAL PRACTICES:

1, PERFORMANCE OF PROCEDURES BEYOND THOSE ALLOWED BY THE
HEALTH CARE PROFESSIONAL'S QUALIFICATIONS AND TRAINING
EXCEPT WHEN UNDER THE DIRECT SUPERVISION OF A QUALIFIED
HEALTH CARE PROFESSIONAL;

2. UNSAFE OR DANGEROUS PRACTICES AS MAY BE DETERMINED BY THE
CORPORATION;
3. IRRATIONAL OR UNNECESSARY DRUG USE;

4. UNNECESSARY PERFORMANCE OF DIAGNOSTIC OR THERAPEUTIC
PROCEDURE;

5. CHARGING OR COLLECTING FROM A MEMBER AN AMOUNT IN EXCESS
OF THE BENEFITS INCLUDING THOSE COVERED BY CAPITATION OR
2


H.B. NO. 2174

CONauW FORE

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,

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

7. ANY OTHER WILLFUL OR NEGLIGENT ACT OR OMISSION OF THE
HEALTH CARE PROFESSIONAL IN VIOLATION OF THIS ACT WHICH
TENDS TO UNDERMINE OR DEFEAT THE OBJECTIVES OF THE NHIP; AND

8, ALL SUCH OTHER ABUSES AND UNETHICAL PRACTICES AS MAY BE
DETERMINED BY THE CORPORATION.

SEC. 46. OFFENSES OF MEMBERS - ANY MEMBER WHO, FOR PURPOSES OF
CLAIMING NHIP BENEFITS OR ENTITLEMENT THERETO, SHALL COMMIT ANY OF
THE OFFENSES DEFINED UNDER THIS ACT, INDEPENDENTLY OR IN CONNIVANCE
WITH A HEALTH CARE PROVIDER, SHALL SUFFER A FINE OF FIVE THOUSAND
PESOS (P5,000.00) AND SUSPENSION FROM AVAILMENT OF NHIP BENEFITS FOR
NOT LESS THAN THREE (3) MONTHS BUT NOT MORE THAN SIX (6) MONTHS.

SEC. [44] 47. [Penal Provisions Any violation of the provisions of this Act, after due
notice and hearing, shall suffer the following penalties:]-OFFENSES OF EMPLOYERS-

[A fine of not less than Ten thousand pesos (P 10,000) 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 (P1,000.00).]
REGISTER EMPLOYEES, OR TO DEDUCT CONTRIBUTIONS FROM THE EMPLOYEES
COMPENSATION AND/OR REMIT THE SAME TO THE CORPORATION, THE PENALTY
SHALL BE A FINE OF FIVE THOUSAND PESOS (P5, 000. 00) MULTIPLIED BY THE
TOTAL NUMBER OF EMPLOYEES OF THE FIRM AND IMPRISONMENT OF NOT LESS
THAN SIX (6) YEARS AND ONE (1) DAY BUT NOT TO EXCEED TWELVE (12) YEARS.

Any employer or any officer authorized to collect contributions under this Act who, after
collecting or deducting the monthly contributions from his employee’s 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 contribution and shall suffer the penalties
provided for in Article 315 of the Revised Penal Code.

‘Any employer who shall deduct directly or indirectly from the compensation of the
covered employees or otherwise recover from them his own contribution on behalf of such

B


Cen TD UFHONe

H.B.

NO. 2174

employees shall be punished by a fine [not exceeding] OF [One] FIVE thousand pesos (P[I]
5,000.00) multiplied by the total number of employees employed by the firmfor] AND
imprisonment FOR not [exceeding one (1)] LESS THAN SIX (6) YEARS AND ONE DAY BUT
NOT TO EXCEED TWELVE (12) years.[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

‘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 not more than twelve (12) years and a fine of not less than Ten thousand pesos (P 10,000. 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.

CRIMINAL ACTION ARISING FROM A VIOLATION OF THE PROVISIONS OF
THIS ACT MAY BE COMMENCED BY THE CORPORATION OR THE EMPLOYEE
CONCERNED EITHER UNDER THIS ACT OR IN APPROPRIATE CASES UNDER THE
REVISED PENAL CODE: PROVIDED, THAT SUCH CRIMINAL ACTION MAY BE FILED
BY THE CORPORATION IN THE CITY OR MUNICIPALITY WHERE: THE VIOLATION
WAS COMMITTED OR IN PROPER COURTS IN METRO MANILA, AT THE OPTION OF
THE CORPORATION.

“SEC. 48. GENERAL PROVISIONS.

SEC. 48-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:

(A) MITIGATING CIRCUMSTANCES - THE FOLLOWING CIRCUMSTANCES
SHALL MITIGATE THE LIABILITY OF THE RESPONDENT:

VOLUNTARY ADMISSION OF GUILT;

GOOD TRACK RECORD;

FIRST OFFENSE; AND

SUCH OTHER CIRCUMSTANCES AND CONSIDERATIONS AS MAY BE
DETERMINED BY THE CORPORATION.

AYERS

(B) AGGRAVATING CIRCUMSTANCES - THE FOLLOWING CIRCUMSTANCES
SHALL AGGRAVATE THE LIABILITY OF THE RESPONDENT:

1. PREVIOUS CONVICTION OF AN OFFENSE, AS PROVIDED FOR IN THIS
ACT; OR

2, CONNIVANCE AND/OR CONSPIRACY WITH AN OFFICER OR EMPLOYEE
OF THE CORPORATION TO FACILITATE OR CONCEAL THE COMMISSION
OF THE VIOLATION; OR

. GROSS NEGLIGENCE; AND
SUCH OTHER CIRCUMSTANCES AND CONSIDERATIONS AS MAY BE
DETERMINED BY THE CORPORATION.

RY


45
46
47
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49

H.B.NO. 2174

SEC 48-B. APPLICATION OF CIRCUMSTANCES IN THE IMPOSITION OF
PENALTIES-

A. THE PRESENCE OF MITIGATING CIRCUMSTANCE WITHOUT ANY
AGGRAVATING CIRCUMSTANCE SHALL LIMIT THE IMPOSABLE
PENALTY TO ITS MINIMUM.

B. 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.

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

SEC. 48-C. COMMON PROVISIONS - 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 HEALTHCARE
PROVIDER EXCEEDS THE VALIDITY OF THE CURRENT ACCREDITATION, THE
RENEWAL OR THE REACCREDITATION OF THE LATTER SHALL NOT BE ACTED
UPON UNTIL THE FULL TERM OF THE SUSPENSION IMPOSED HAS BEEN SERVED.
OR LIFTED. FOR THIS PURPOSE, THE PERIOD COVERING THE EXPIRATION OF
ACCREDITATION AND THE START OF THE EFFECTIVITY OF THE RENEWAL.
AND/OR REACCREDITATION SHALL BE CONSIDERED AS PART OR CONTINUATION
OF THE SUSPENSION. 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 ACCOUNTS OF TWO OR MORE VIOLATIONS EXCEED TWENTY-
FOUR (24) MONTHS, THE MAXIMUM IMPOSABLE PENALTY SHALL BE EXACTED.

IN ALL CASES WHEREIN A DECISION IS RENDERED AGAINST A HEALTH
CARE PROVIDER, THE DEPARTMENT OF HEALTH (DOH), PROFESSIONAL
REGULATIONS COMMISSION (PRC) AND/OR OTHER CONCERNED AGENCIES
SHALL BE FURNISHED WITH A COPY OF THE SAME FOR INFORMATION AND/OR
APPROPRIATE ACTION.

A NOTICE OF SUSPENSION FOR THE INFORMATION OF THE PUBLIC SHALL.
BE POSTED IN CONSPICUOUS PLACES AND / OR 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.
ENTUMERATED 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.

SEC. 49. FINAL PROVISIONS —

SEC. 49-A. PROSECUTION OF OFFENSES — OFFENSES DEFINED UNDER
SECTIONS 44s, 45s, 46s and 47s HEREOF, 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.


+ NO. 2174

SEC. 49-B. FILING OF COMPLAINT - THE FILING OF COMPLAINT BEFORE THE
CORPORATION SHALL NOT BAR A SEPARATE INDEPENDENT CRIMINAL ACTION
BEFORE ANY COURT AGAINST THE ERRING HEALTH CARE PROVIDER OR
MEMBER AND VICE VERSA.

SEC. 49-C. 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 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 SECOND DEGREE OF
CONSANGUINITY OR AFFINITY OF THE OWNER OR MEDICAL DIRECTOR 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.

SEC. 49-D. 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.

SEC. 49-E. IMPOSITION OF INTEREST AND SURCHARGES - THE CORPORATION
MAY IMPOSE INTEREST 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 THE REMITTANCE OF CONTRIBUTIONS WHICH ARE DUE WITHIN THE
PRESCRIBED PERIOD. NOTHWITHSTANDING THE PROVISION OF ANY LAW TO THE
CONTRARY, THE CORPORATION MAY ALSO COMPROMISE, WAIVE AND / OR
RELEASE, IN WHOLE OR IN PART, SUCH INTEREST OR SURCHARGES UNDER SUCH
TERMSAND CONDITIONS AS IT MAY PRESCRIBE.

SEC. 49-F. 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 A FINE OF NOT LESS THAN FIVE
THOUSAND PESOS (PS,000.00) NOR MORE THAN TWENTY THOUSAND PESOS
(P20,000.00), OR IMPRISONMENT FOR NOT LESS THAN SIX (6) YEARS AND ONE (1)
DAY BUT NOT TO EXCEED TWELVE (12) YEARS 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. 19. CONGRESSIONAL OVERSIGHT COMMITTEE - A Joint Congressional
Oversight Committee is hereby created, composed of the Chairman of the Senate Committee on
Health and five (5) other Senators designated by the Senate President, and the Chairman of the
House Committee on Health, and five (5) other Members of the House of Representatives
designated by the Speaker of the House of Representatives: Provided, That, of the five (5)
members to be designated by each House of Congress, three (3) should come from the majority
and the remaining two (2) from the minority.


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The Joint Congressional Oversight Committee shall have the power to monitor and
evaluate the implementation of this Act. It shall review and propose amendments to the
Implementing Rules and Regulation proposed by the Corporation.

SEC. 20. APPROPRIATIONS — The necessary funds required for the implementation of
this Act shall be included in the annual appropriations of the Department of Health.

SEC. 21. Implementing Rules & Regulations - The Philippine Health Insurance
Corporation (PhilHealth) AND THE DEPARTMENT OF HEALTH shall issue the necessary
rules and regulations to implement the provisions of this Act.

SEC. 22. Repealing Clause - All laws, issuances or any part thereof inconsistent with this,
Act are hereby repealed or modified accordingly.

SEC. 23. Effectivity. - This Act shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in at least two (2) national newspapers of general
circulation.

Approved,