Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 20

Introduced by HON. MARCELINO “MARCY” R. TEQDORO

EXPLANATORY NOTE

The proposal seeks, among others, to strengthen the capability of the Philippine
Health Insurance Corporation (PhilHealth) for more effective implementation of the
National Health Insurance Program (NHIP) against incidence of fraudulent activities. It
primarily aims to specifically define the offenses and penalties as well as the emerging
abuses and unethical practices to be imposed against erring health care providers,
employers and members,

The billions of pesos in benefit payment are really irresistible to some
unscrupulous health care providers. Though there is no statistical and hard data to
measure the amount of fraudulent claims, it is imperative to define and criminalize the
abuses and unethical practices of erring health care providers before they become an
inevitable threat to the NHI Fund. The abuses and unethical practices are getting
‘sophisticated, evolving to new methods and techniques of violations along every
generation of social health insurance.

Republic Act No. 7875, as amended by RA No. 9241 failed to provide Philhealth
the enforcement power and authority against any erring health care providers and
employers. In order to specifically address this very urgent concern, it is therefore
proposed to vest PhilHealth with visitorial and police powers to ensure the effective
implementation of the NHIP and to protect the NHI Fund from being indiscriminately
dissipated through fraudulent activities, abuses and unethical practices.

In view of the foregong explanations and arguments, approval of this bill is

frarewen: Tighe,
MARCELINO “MARCY” R. TEODORO

Representative, 1st District
City of Marikina

eamestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 20

Introduced by HON. MARCELINO “MARCY” R. TEODORO

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 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:

"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.

KX X"
SEC. 2. Section 16 of the same Act is hereby amended to read as foliows:

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

weed

“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 objective:
“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;

XXX

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

"XXX.

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;

“Arepresentative 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

XXX.”

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 secommendation of the Board. The
President MAY BE REMOVED FOR CAUSE, UPCN RECOMMENDATION OF
THE BOARD [shall not be removed from office except in accordance with
existing laws].

XX,
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.

“p) 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].

XXX
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 ef not less than six (6) months nor more than
one (1) year in case the violation is ited by the member.

“Where the violations consist of failu~ fuse! to deduct contributions from the
employee's compensation or te remil the same to the Corporation, the penalty
shall be a fine of not less than Five hundred pesos (P50) but not more than One



thousand pesos (P1,000) multiplied by the total number of employees employed
by the firm and imprisonment of not Jess 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 ACCREDITATION OF NOT LESS
THAN THREE (3) MONTHS BUT NOT MORE THAN SIX (8) 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 !S 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 CTHER 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-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

“ili) 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;

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

‘iii) 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):

“1) 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 RENDEREDIGIVEN.

“3) EXTENDING THE PERIOD OF CONFINEMENT — THIS IS 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;

‘“ji) 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 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)/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.

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 (P 100,000.00) 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 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;

“ii) 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;

“iii) 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;

“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.

“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 AND/OR
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


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 [his]own contribution on behalf of such
employees shall be punished by IMPRISONMENT FOR NOT LESS THAN SIX
(8) 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 firmf, 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 thanTwenty 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
ACTOR 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:

“j) VOLUNTARY ADMISSION OF GUILT;

GOOD TRACK RECORD;

‘ili) 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;

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

“ili) 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.

“VL 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 REACCREDITATION 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 REACCREDITATION 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 ROPER 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.

“Xl. 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.

“Xi. LEGAL ASSISTANCE AND SENEFITS

“ANY OFFICER, EMPLOYEE, OR AUTHORIZED REPRESENTATIVE OF THE
CORPORATION WHO MAY BE SUED BY ANY HEALTH CARE
PROVIDER/MEMBERISTAKEHOLDER OR ANY OTHER PERSON/ENTITY, IN
CONNECTION WITH THE PERFORMANCE OF THEIR DUTIES AND
OBLIGATIONS UNDER THE NH!IP 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.



“XU. OTHER VIOLATIONS

“All other violations [involving fundsJof 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 genera! circulation.

Approved,