EIGHTEENTH CONGRESS
OF THE REPUBLIC OF THE PHILIPPINES }
First Regular Session )

HOUSE OF REPRESENTATIVES
296

House Bill No.

Introduced by Representative Victor A. Yap

EXPLANATORY NOTE

‘The Hospital Licensure Act or Republic Act 4226, which was enacted in 1965, mandates the
Bureau of Medical Services to set standards in hospital construction and operation, and to register
and grant license to operate to hospitals.

More than five decades have passed since its passage, dramatic changes and improvement in
the field of health care have led to the emergence and development of new types of health care
facilities. Presently. we can see new types of health facilities such as diagnostic, therapeutic, and
rehabilitative centers unlike before when there were only hospitals and clinics. As a result, a number
of such types of facilities do not anymore qualify under the regulatory mandate of the Department
of Health. There is therefore a need to update the regulation of this industry to cover new types of
health facilities that need to be regulated.

‘This bill seeks to expand and strengthen the regulation of health facilities in the Philippines
through the creation of the Bureau of Health Facilities and Services in order to ensure the safety and
quality of the health care facilities. Aside from facilitating the standards and licenses of health
facilities and services, the Bureau shall have quasi-judicial powers over administrative cases against
any health service establishment.

In view of the foregoing reasons, immediate passage of this measure is earnestly requested.

VITOR A. YAP
Representative, 2" District of Tarlac


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EIGHTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )

HOUSE OF REPRESENTATIVES

House Bill No. _ 296

Introduced by Representative Victor A. Yap

AN ACT
STRENGTHENING THE REGULATION OF HEALTH FACILITIES AND
SERVICES, AND APPROPRIATING FUNDS THEREFOR, REPEALING FOR THE
PURPOSE REPUBLIC ACT NO. 4226, OTHERWISE KNOWN AS THE “HOSPITAL.
LICENSURE ACT”

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

SECTION 1. Short Title. - This Act shall be known as the “Health Facilities Regulation Act”.

SEC. 2. Definition of Terms. — For purposes of this Act, the following terms are hereby

defined as follows:

a) Health Facilities refer to institutions whether stationary or mobile, land based or
otherwise and other health related establishments which provide diagnostic, therapeutic,

rehabilitative, and other health care services except hospital pharmacies;

b)_Litense reters to a formal authorization issued by the Department of Health (DOH) to an
individual, partnership, corporation or association to operate a health facilities or services. It is a
prerequisite for »ccreditation of a hospital and other health facilities by any accrediting body that
is recognized by the DOH;

©) Licensee vefers to the person, partnership, corporation, cooperative or association granted
allicense to operite and maintain a health facility or services according to an approved standard

set by the Bureau;

d) Department of Health—Permit to Construct (DOH-PTC) refers to a pe

sued by DOH
through HFSRB to an applicant who will establish and operate a hospital or other health facility,
upon compliance with required documents set forth in this Order prior to the actual construction
of the said facility. A DOH-PTC is also required for hospitals and other health facilities with


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substantial alteration, expansion, renovation, increase in the number of beds or for additional

services (add-ons) beyond their service capability. Itis a prerequisite for License to Operate; and

¢) Registration refers to the act or process of entering information about a health facility into the
records of the public health system.

SEC. 3. Bureau of Health Facilities and Services (BHFS). — The Health Facilities and Services
Regulatory Bureau (HFSRB) is hereby renamed as the Bureau of Health Facilities and Services
(BHES) herein referred to as the Bureau, which shall be created in the DOH. The Bureau shall be
under the Office of the Secretary and shall have the following functions, powers and duties:

a) To promulgate, establish and prescribe rules, regulations, standards, requirements and
specifications in the construction and operation of health facilities and: impose penalties for

violations of such;

b) To inspect and monitor all health facilities and other related facilities to ensure their
continued compliance with the rules and regulations in accordance with this Act and to make
recommendations to directors or administrators of health facilities for the correction of

deficiencies found during the inspections;

©) To study and adopt a system of classifying health facilities and other related facilities in the
Philippines;

d) To review and approve construction designs and plans for all health facilities including

renovation or expansion of the same in accordance with the provisions of this Act;

) To determine, levy, assess and collect the appropriate permit fee, registration fie, license
fee and surcharges pertinent to the operation of facilities and services except in cases where
charges or rates are established by international bodies or associations of which the Philippines
is a participating member or by bodies recognized by the Philippine government as the proper

arbiter of such charges or rates;

g) To coordinate and call the assistance of any department, office, agency or instrumentality
of the national or local government and other entities concerned with-any aspect involving

health facilities for the effective implementation of this Act;

h) To maintain a register of health facilities and other related facilities with licenses indicating
the name of the facility, address or location, classification, name of the director or administrator,

ownership, number of authorized beds and such other pertinent data as may be necessary;


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) To promulgate and implement the rules and regulations governing the registration,
licensure and operations of health facilities and related facilities and. to periodically review and
amend the same, subject to the approval of the Secretary and in consultation with the sectors
concerned: Prowided, That such rules and regulations shall be in accordance with the provisions of
this Act,

j) To grant a certificate of license for the operation and maintenance of health facilities and

services, and to suspend or revoke the same in accordance with the provisions of this Act;

k) To hire and train competent individuals and provide qualifications of personnel to be
designated as regulatory officers;

}) To submit yearly reports to the Secretary of Health, and the Chairpersons of the
Committees on Health of both Houses of Congress; and

m) To perform such other functions necessary to carry out the duties prescribed under this
Act.

SEC. 4. Quasi-Judicial Powers. — To carry out its tasks more effectively, the Bureau shall be

vested with the following quasi-judicial powers:

a) To investigate, hear and decide administrative cases initiated by the Bureau or filed by any
person against a health facility or health service establishment violating any provision of this Act
and its implementing rules and regulations and to impose appropriate administrative sanctions or
penalties pros ied in this Act;

b) To promulgate rules governing the conduct of administrative hearings: Prowided, That in
such proceedings, the Bureau shall not be bound by the technical rules of evidence of the Rules
of Court: Provided, further, That the latter may be applied in a suppletory manner;

©) To administer oaths and affirmations, and to issue subpoena duces fecum and ad tesificandunn,
requiring the production of such books, contracts, correspondence, records, statement of
accounts and other documents and the attendance and testimony of parties and witnesses, as

may be material to the investigation being conducted by the Bureau;

4) To exercise contempt powers and impose appropriate penalties;


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¢) To cause the prosecution of all cases involving violations of this Act and its implementing

rules and regulations, and

) To summarily order the closure of health facilities and other related facilities operating

without a license; and

g) To preventively suspend health facilities found during inspection or monitoring to have
committed gross violations of the standards or rules and regulations such as non-compliance to
the approved construction design; any fraudulent, unscrupulous activities, false claims ot
misrepresentations; operating with unlicensed or unqualified health personnel; and the
commission or omission of any act which may result to serious injury, permanent disability or

loss of life of a patient or staff, or would compromise public safety

SEC. 5. Mandatory Conciliation-Mediation. — The Bureau shall exert all efforts towards the
amicable settlement of an administrative case within its jurisdiction on or before the first hearing.
‘Towards this end, it shall have the power to ask the assistance of relevant government officials

and qualified private individuals to act as a compulsory mediator on cases referred to it.

SEC. 6. Kegistration and License. - The Bureau shall facilitate the delivery of high-quality and
cost effective healthcare by promoting competition among health facilities. Towards this end, all
hospitals and other health facilities, government or private, shall be registered and duly licensed
by the Bures before such facilities are allowed to operate or be opened to the public. Both
public and private health facilities shall be required to apply for the permit to construct and

license to operate,

SEC. 7. Organization. — The Director of the Bureau shall, subject to the approval of the
Secretary of | !ealth, organize its personnel in such divisions and units as will ensure efficiency

and effectiveness:

‘The Bureau shall establish, operate and maintain a regional office in each of the
administrative regions of the country to enforce regulatory policies and standards for the

licensing, accreditation, and monitoring of health facilities to ensure quality health care.

In order to allow the Bureau to carry out its functions and responsibilities, the Secretary of
Health shall hire additional personnel, as deemed necessary. The head of the Bureau shall make
the necessary recommendations to the Secretary of Health regarding the number and

competency of additional personnel to be hired.


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SEC. 8. Minimum Qualifications for Appointment as Chief Excecutive Officer, Chief Operating Officer, or
Adninisirative Officer: ~The Chief Executive Officer, Chief Operating Officer, or Administrative
Officer of a hospital or health facility who shall be responsible for the overall management and
administration of the hospital; formulation of policies, plans, programs and strategies to ensure
implementation of health standards; and the day-to-day supervision of the functional units shall
possesses any of the following minimum qualifications: a) formal baccalaureate degree,
preferably with 2 master’s degree in hospital administration or related course; or b) at least five (5)

years experience in a supervisory or managerial position.

SEC. 9. Classification of Hospitals and Other Health Facilites. - The existing, classification of
hospitals and ther health facilities including the system, rules and regulations governing their
classification shall be subject to automatic review by the Bureau, in consultation with relevant
stakeholders, within three (3) years from the effectivity of this Act and thereafter as it may deem
necessary. It shall take into consideration the findings and recommendations made by Congress,
if any, and the actual situation in dealing with the existing classification of hospitals and other
health facilities for the purpose of protecting and promoting the health of the public by ensuring
a minimum quulity of service rendered by hospitals and other regulated health facilities and to

assure the safety of patients and personnel.

Classification of health facilities and other related facilities shall only be made upon the
approval of the Secretary of Health after mandatory consultation with representatives from

government and private hospital associations and patient organizations.

SEC. 10. Construction Design. ~The Bureau shall review and approve the construction design
and plans of lath facilities or related facilities to be constructed or which shall undergo

renovation or expansion.

An application for the construction design of a health facility or other related facility shall be
submitted to the Bureau in a form prescribed by the latter and accompanied by a plan of the
facility proposed! to be constructed. The approved construction design and plan issued by the
Bureau shall be a prerequisite for the issuance of a building permit by the official of the

municipality or city where the facility is proposed to be constructed.

All level III government hospitals to be constructed shall include in its design the provision

of geriatric ward.

SEC 11, Application, Inspection, and Issuance of License to Operate (LTO). ~ All health facilities
shall be duly licensed by the Bureau, in accordance with Republic Act No. 11032 or the “Ease of
Doing Business /\ct”, before such facilities are allowed to operate or be opened to the public.


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‘An application of a health facility for the issuance of a License to Operate, including its
medical ancillary services, shall be filed with the Bureau or its Regional office using the prescribed

forms.

‘The LTO shall be issued upon due compliance of the applicant with the rules and
regulations prescribed by the Bureau pursuant to the provisions of this Act: Provided, That the
Bureau has conducted a comprehensive on-site inspection and has certified that the applicant has
satisfactorily complied with the requisites prescribed in this Act and its implementing rules and
regulations (IRR). Provided furtber, That an applicant shall get the approval of the Food and Drug
Administration (FDA) for its pharmacy or Philippine Nuclear Research Institute (PNRD) for
medical radiation facility.

The FDA, PNRI, Department of Environment and Natural Resources (DENR) and other
agencies involved in the regulation of health facilities shall employ a One-Stop Shop strategy in the

processing of applications through systems that are accessible to the public.

Upon issuance of the LTO, a health facility shall be included in the Bureau’s registry and in
the National He ith Facility Registry upon the approval of the DOH.

All lices

J health facilities shall be automatically allowed to participate in the National
Health Insurance Program.

SEC. 12. | “alidity and Renewal of License. - The initial license to operate and maintain a health
facility or other related facility shall be valid for a period of three (3) years from its date of issuance,
and shall be renewed regularly, subject to the rules and regulations to be issued by the Bureau.

SEC. 13. Suspension and Revocation of License. -’The Bureau, after conducting, an administrative
hearing, with due notice to the licensee, may suspend or revoke the license to operate and maintain
a health facility or other related facility of any person, partnership, corporation or association for
any of the following grounds:

@) Violation by the licensee of any provision of this Act or any other existing law;

(b) Violation of rules and regulations prescribed in the implementation of this Act; and

(© Failure to make necessary corrections or adjustments required by the Bureau in the

improvement or maintenance of facilities and services.


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SEC. 14. Appeal, — The orders, rulings or decisions of the Bureau shall be appealable to the
ccretary of Health.

SEC. 15 Separate Licenses Required. - Separate licenses shall be required for health facilities or
other related facilities or branches thereof maintained in separate premises even though they are
operated under the same management: Provided, however, That separate licenses shall not be
required for separate buildings in the same compound: Provided, further, That the approval of the
designs and plans for construction or renovation of buildings within the same compound shall
also be secured from the Bureau to determine compliance with standards and requirements

herein authorived.

SEC. 16. Non-Transferability of License. ~ A license for the operation of a health facility or
other related ficility shall not be transferable. The Bureau shall be notified of any change in
‘ownership, change of name of the health facility or other related facility. “Transfer of location of

the facility shall require an application for a new license.

SEC. 17. Penalties. - Any person, partnership, association, or corporation who establishes,
operates, conducts, manages or maintains a health facility or other related facility within the
meaning of this Act without first obtaining a license, or violates any provision of this Act or its
Implementing Rules and Regulations shall be liable to a fine of not less than Fifty Thousand
Pesos (P50,000.00) but not to exceed One Hundred Thousand Pesos (P100,000.00) for the first
offense, not kss than One Hundred ‘Thousand Pesos (P100,000.00) but not to exceed Five
Hundred Thousand Pesos (P500,000.00) for the second offense, and not less than Five Hundred
‘Thousand Pesos (P500,000.00) but not to exceed One Million Pesos (P1,000,000.00) for the
third and subsequent offenses. After the third offense, the license of the hospital shall be
revoked. Each lay that the health facility or other related facility operates after the first violation

shall be considored a subsequent offense.

In addition to the penalties specified in the preceding paragraph, the Bureau may summarily
order the closure of any health facility or other related facility found operating without a license,
or revoke the license to operate of any health facility or other related facility after due process.

Facilities may only re-apply for a new LTO one (1) year after revocation of its license.

SEC. 18. Income Retention. -'To ensure that the Bureau shall have full authority to utilize its
income and enhance its capacity to expand and to improve the quality of its services, it is hereby

authorized to retain and utilize one hundred percent (100%) of its i

\come generated from

various fees and surcharges without remitting the same to the Bureau of Treasury.


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In no case shall the retained income be used for the payment of salaries and other personnel
benefits. The retained income shall be deposited in an authorized government depositary bank
recommended by the DOH, the DBM, and the Department of Finance.

SEC. 19. Appropriations. — The current appropriations of the DOH under the General
Appropriations Act (GAA) shall be used to carry out the initial implementation of this Act.
‘Thereafter, such sums as maybe necessary for the continued implementation of this Act shall be

included in the succeeding GAA.

SEC. 20. Mandatory Review. — Congress shall undertake a mandatory review of this Act at
least once every five (5) years and as often as it may deem necessary, withthe primary objective
of overseeing the implementation of this Act and reviewing the accomplishments and the

utilization of income of the Bureau.

SEC. 21. Implementing Rules and Regulations. - The Secretary of Health, upon the
recommendation of the Bureau, FDA, PNRI, and other concerned agencies and after
consultation with recognized health facilities, associations, patients’ organizations and other civil
society organivations, shall issue the rules and regulations implementing the provisions of this
Act within ninety (90) days from its effectivity.

SEC. 22. Separability Clause. - If any part or provision of this Act shall be held
unconstitutional or invalid, other provisions hereof which are not affected shall continue to be in

full force and effect.

SEC. 23. Repealing Clause. — Republic Act No. 4226, otherwise known as the “Hospital
Licensure Act,” is hereby repealed. Presidential decrees, executive orders, rules and regulations
and other isstances or parts thereof which are inconsistent with the provisions of this Act are
hereby repeale:|, amended or modified accordingly.

SEC. 24. Hiffecivity. - This Act shall take effect fifteen (15) days after its publication in the
Official Gazette ox in any newspaper of general circulation.

Approved,