Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

FIFTEENTH CONGRESS
First Regular Session

HB No. 4238

Introduced by Rep. Philip A. Pichay

EXPLANATORY NOTE

The National Health Insurance Act of 1995, or Republic Act No. 7875, as
amended, is a landmark piece of social legislation. It endeavors to ensure sustainable
and affordable social health insurance, thus paving the way for a more accessible and
quality health care to all Filipinos, through the creation of the National Health Insurance
Program (NHIP) and the Philippine Health Insurance Corporation (Philheatth) as the
program administrator.

In its more than sixteen years of existence, Philhealth has achieved several
milestones in the implementation of its mandate, particularly with regard to the issue of
universal coverage. These gains must be sustained. More importantly, we must aim
even higher and strive to meet the NHIP goal through sustained and guaranteed
funding especially for the enrollment of the marginalized sector.

This bill intends to strengthen Philhealth in membership and contribution
advocacy by introducing amendments to Republic Act No. 7875, as amended. For one,
it seeks to change the current sharing scheme between local government units (LGUs)
and the national government to full national government subsidy scheme for the
enrolment of indigents identified through the means test protocol by the designated
institution. The measure is cognizant of the fact that LGUs have insufficient fund
sources, thus compromising the health care services that should be availed of by the
poorest of the poor. However, this wil not deprive the LGUs, among other donors, from
participating in the Program, as LGUs will still be obliged to pay the required premium,
covering the poorest segment from the informal sector through the imptementation of
the partial subsidy scheme. ‘


With the transition phase of implementation of former Medicare Program into the
National Health Insurance Program (NHIP) has been lapsed, there is a need to change
some representation of Philheatth Board of Directors in order to appropriately represent
different sectors.

To ensure that a greater segment of the population is covered, the proposed
measure seeks Philhealth coverage for specific barangay volunteers to be funded by
the LGUs, like the barangay health workers, tanods, and nutrition scholars, among
others, thus incorporating the concem of various bills already filed in Congress on the
matter. Likewise, the premium of the lowly househelpers will be shouldered fully by
their employers without any deduction from the compensation of the former.

Cognizant of the reality that some of Philheatth’s partners — the accredited health
care providers — may have been guilty of abusive activities and fraudulent claims, this
bill proposes to give visitorial and/or police powers to Philhealth over the said partners,
define certain offenses and provide for heavier sanctions and penalties for their
violation.

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

Lhe

ntative, 1° District

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No__ 4238

Introduced by : REP. PHILIP A. PICHAY

AN ACT
STRENGTHENING THE (MPLEMENTATION OF THE NATIGNAL HEALTH INSURANCE
PROGRAM (NHIP), AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 7875,
AS AMENDED BY RA 9241, FOR THE PURPOSE

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

SECTION 1. Section 4 of Republic Act No. 7875, is hereby further amended by adding a
definition of the informal sector, to be denominated as paragraph (r) and succeeding
paragraphs to be re-denominated accordingly.

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

4) Indigent ~ A person who has no visible means of income, or whose income is
insufficient for the subsistence of his family {, as identified by the Local Health
Insurance Office and] based on specific criteria set by the [Corporation] NATIONAL
GOVERNMENT in accordance with the guiding principles set forth in Article | of this Act.

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,


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PEDICAB AND TRICYCLE DRIVERS, SMALL CONSTRUCTION WORKERS AND HOME-
BASED INDUSTRIES AND SERVICES.

V) PARTIAL SUBSIDY SCHEME - SHARING SCHEME FOR PAYMENT OF PREMIUM
CONTRIBUTION BY THE NATIONAL GOVERNMENT, LGU AND OTHER SPONSORS; AND
BY THE MEMBER WHO BELONG TO THE LOWEST INCOME BRACKET OF THE
INFORMAL SECTOR.

SEC. 2. Section 6 of the same Act is hereby further amended to read as follows:

“SECTION 6. Coverage. — All citizens of the Philippines shall be 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 (15) years: Provided, That the Program shatl not be

made compulsory in certain provinces and cities until the Corporation shail be able to

ensure that members in such localities shall have reasonable access to adequate and

acceptable health care services.] COVERAGE IN THE PROGRAM SHALL BE

MANDATORY UPON:

(A) ALL EMPLOYEES AND THEIR RESPECTIVE EMPLOYERS;

(B} ALL SELF-EMPLOYED PERSONS AS MAY BE DETERMINED BY THE.

CORPORATION UNDER SUCH RULES AND REGULATIONS AS IT MAY

PRESCRIBE, [NCLUDING BY NOT LIMITED TO THE FOLLOWING:

ALL SELF-EMPLOYED PROFESSIONALS;

PARTNERS AND SINGLE PROPRIETORS OF BUSINESSES;

3. ACTOR AND ACTRESSES, DIRECTORS, SCRIPTWRITERS AND NEWS
CORRESPONDENTS WHO DO NOT FALL WITHIN THE DEFINITION OF
‘THE TERM “EMPLOYEE” IN SEC. 4(1) OF THIS ACT;

4. PROFESSIONAL ATHLETES, COACHES, TRAINERS AND JOCKEYS; AND

5. INDIVIDUAL FARMERS AND FISHERMEN;

(c) FILIPINOS EMPLOYED BY FOREIGN-BASED EMPLOYERS;

(D) _ INDIGENTS;

(E} ALL MEMBERS WHO REACH THE AGE OF RETIREMENT AS PROVIDED
FOR BY LAW AND HAVE PAID AT LEAST ONE HUNDRED TWENTY (120)
MONTHLY CONTRIBUTIONS.”

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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 enroll 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 11 of Medicare or in accordance with the provisions of
this Act, including indigents members, shall also be enrolled in the Program:

<) all persons eligible for benefits as members of local health insurance plans
established by the Corporation in accordance with the implementing rules and
Tegulations of this Act shall also be deemed to have enrolled in the Program. Enrollment
of persons who have no current heaith insurance coverage shall be given priority by the
Corporation; 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 16 of the same Actis hereby further amended to read as follows:

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

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


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(Q) NOTWITHSTANDING THE PROVISIONS OF ANY LAW TO THE CONTRARY TO.
IMPOSE INTEREST AND / OR SURCHARGES OF THREE (3) PERCENT PER MONTH OR
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 INTEREST GR SURCHARGES IMPOSED UPON EMPLOYERS REGARDLESS
OF THE AMOUNT INVOLVED UNDER SUCH VALID TERMS AND CONDITIONS IT MAY
PRESCRIBE.

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

x x x"
SEC. 5. 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: (a)

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;


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The President & CEO of the Corporation;

Arepresentative of the [labor] FORMAL sector;

A representative of employers;

[The 885 Administrator or his representative;

‘The GSIS General Manager or his representative;]

‘THE CHAIRMAN OF THE CIVIL SERVICE COMMISSION OR HIS / HER AUTHORIZED
REPRESENTATIVE

‘THE PRESIDENT OF UNION OF LOCAL AUTHORITIES OF THE PHILIPPINES (ULAP)
OR HtS / HER AUTHORIZED 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 medicat health professionals. ]

‘A REPRESENTATIVE OF HEALTH CARE INTITUTIONS TO BE ENDORSED BY THE
NATIONAL ASSOCIATIONS OF HEALTH CARE INSTITUTIONS

A REPRESENTATIVE OF HEALTH CARE PROVIDERS PROFESSIONALS TO BE
ENDORSED BY THE NATIONAL ASSOCIATIONS OF HEALTH CARE PROFESSIONALS

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

b) Appointment and Tenure - The President of the Philippines shali appoint the
Members of the Board upon the recommendation of the Chairman of the Board and in
consultation with the sectors concerned, Members of the Board shall have a term of four
(4) years each, renewable for a maximum of two (2) years, except for members whose
terms shall be co-terminous with their respective positions in government. Any vacancy
in the Board shall be filled in the manner in which the original appointment was made
and the appointee shall serve only the unexpired term of his predecessor.

¢) Meetings and Quarum ~ The Board shall hold regular meetings at least once a
month, Special meetings may be convened at the call of the Chairperson or by a majority
of the members of the Board. The presence of a majority of all the members shall
constitute a quorum. In the absence of the Chairperson and Vice Chairperson, a
temporary presiding officer shall be designated by the majority of the quorum. {a)

d} Allowances and Per Diems ~ The members of the Board shall receive a per diem
for every meeting actually attended subject to the pertinent budgetary laws, rules and
regulations on compensation, honoraria and allowances. ’

SEC. 6. Section 27 of the same act, is hereby further amended to read as follows:


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SEC. 27. Reserve Fund. - The Corporation xxx

a) _ Ia interest-bearing bonds, securities or other evidences of indebtedness
of the Government of the Philippines, or in bonds, securities, promissory notes and
other evidences of indebtedness to which full faith and credit and unconditional
guarantee of the Republic of the Philippines is pledged OR IN DEBT SECURITIES AND
CORPORATE BONDS ISSUANCES PROVIDED THAT SUCH SECURITIES AND BONDS ARE
RATED TRIPLE “A” BY AUTHORIZED ACCREDITED DOMESTIC RATING AGENCIES
:PROVIDED FURTHER THAT THE ISSUING OR ASSUMING ENTITY OR ITS PREDECESOR
SHALL NOT HAVE DEFAULTED IN THE PAYMENT OF INTEREST ON ANY OF ITS
SECURITIES AND THAT DURING EACH OF ANY THREE(3) INCLUDING LAST TWO (2)
OF THE FIVE (5) FISCAL YEARS NEXT PRECEDING THE DATE OF ACQUISITION BY THE
CORPORATION OF SUCH BONDS, SECURITIES OR OTHER EVIDENCES OF
INDEBTEDNESS, THE NET EARNINGS OF THE ISSUING OR ASSUMING INSTITUTION
AVAILABLE FOR ITS RECURRING EXPENSES, SUCH AS AMORTIZATION OF DEBT
DISCOUNT AND RENTALS FOR LEASED PROPERTIES, INCLUDING INTEREST ON
FUNDED AND UNFUNDED DEBT, SHALL HAVE BEEN NOT LESS THAN ONE (1) AND
ONE QUARTER TIMES THE TOTAL OF THE RECURRING EXPENSES FOR SUCH YEAR:
PROVIDED FURTHER THAT SUCH INVESTMENT SHALL NOT EXCEED 15% OF THE
INVESTMENT RESERVE FUND;

by xxx
° xxx [and]

D) in common stocks [option or warrants to common stocks] of any solvent
corporation or institution created or existing under the laws of the Philippines in the
stock exchange with proven track record of profitability and payment of dividends over
the last three (3) years [or in common stocks of a newly organized corporation about to
be listed in the stock exchange: Pravided, finally, That such duly organized corporation
shall have been rated ‘A’ double ‘A’s or triple ‘A’s by authorized accredited domestic
rating agencies or by the Corporation or in mutual funds including allied investments).


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SEC. 7, It is hereby add another provision which to be numbered SECTION 27-A to read

as follows:

SECTION 27-A. FUND MANAGERS - AS PART OF ITS INVESTMENTS OPERATIONS,
THE CORPORATION MAY HIRE EXTERNAL LOCAL FUND MANAGERS TO MANAGE THE
INVESTMENT RESERVE FUND, AS IT MAY DEEM APPROPRIATE.

SEC. 8. Section 28 of the same act, is hereby further amended to read as follows:

SEC. 28. Contributions. - Ail 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 PAY THE MONTHLY PREMIUM CONTRIBUTION IN ACCORDANCE WITH THE
CONTRIBUTION SCHEDULE as DETERMINED BY THE CORPORATION [continue paying
the same monthly contributions as provided for by aw until such time that the
Corporation shall have-determined the contribution schedule mentioned herein]:
Provided, That their monthly contributions shall not exceed [three percent (3%)] FIVE
PERCENT (5%) of their respective monthly salaries.

TT SHALL BE MANDATORY FOR ALL GOVERNMENT AGENCIES TO INCLUDE THE
PAYMENT OF PREMIUM CONTRIBUTIONS THROUGH LINE ITEM BUDGETING (N THEIR
RESPECTIVE ANNUAL APPROPRIATIONS;

b) [Contributions from self-employed) M{mJembers OF THE INFORMAL SECTOR
shall PAY PREMIUM CONTRIBUTIONS AS DETERMINED BY THE CORPORATION [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 THE PREMIUM CONTRIBUTION OF
THOSE IN THE LOWEST INCOME BRACKET SHALL BE PARTIALLY SUBSIDIZED BY
THE LOCAL GOVERNMENT UNIT AND/OR NATIONAL GOVERNMENT AND/OR
PRIVATE SPONSOR. PROVIDED FURTHER, THAT THE FULL ANNUAL PREMIUM
CONTRIBUTIONS OF HOUSEHELPERS SHALL BE PAID BY THEIR EMPLOYERS;
PROVIDED, FURTHER, THAT THE NEEDED PREMIUM CONTRIBUTIONS OF ALL


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BARANGAY VOLUNTEERS SHALL BE FULLY BORNE BY LOCAL GOVERNMENT UNTTS
CONCERNED; HOWEVER, IN THE CASE OF 4™.6™ CLASS MUNICIPALITIES, THE
PREMIUM CONTRIBUTION SHALL BE SHARED EQUALLY WITH THE NATIONAL
GOVERNMENT.

©) 100

D) NOTWITHSTANDING ANY LAW TO THE CONTRARY, ALL GOVERNMENT
AGENCIES ISSUING PROFESSIONAL OR BUSINESS LICENSE OR PERMIT, SHALL
REQUIRE ALL APPLICANTS TO SUBMIT CERTIFICATE OR PROOF OF PAYMENT OF
PHILHEALTH PREMIUM CONTRIBUTIONS, PRIOR TO THE ISSUANCE OR RENEWAL OF
SUCH LICENSE OR PERMIT.

SEC. 9. Section 29, subsection of the same Act, is amended to read as follows:

SEC. 29, Payment for Indigent Contributions, - PREMIUM [C]contributions for
indigent members shall be FULLY subsidized [partially] by the [local goverament unit]
NATIONAL GOVERNMENT WHICH SHALL BE APPROPRIATED IN THE GENERAL
APPROPRIATIONS ACT AS A SEPARATE LINE-ITEM UNDER PHILHEALTH. [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 LGUs shall be progressively
increased until such time that its share becomes equal to that of the National

Government. (a)}
SEC. 10. Section 44 of the same Act is hereby amended to read as follows:

Article X. Penalties

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

A. VIOLATIONS OF AN INSTITUTIONAL HEALTH CARE PROVIDERS - A fine of
not less than [Ten thousand pesos (P 10,000)] FIFTY THOUSAND PESOS (50,000.00)


{nor] BUT NOT more than [Fifty thousand pesos (PS0,000)] ONE HUNDRED THOUSAND
PESOS in case the violation, OFFENSES, ABUSES AND / OR UNETHICAL PRACTICES
AND / OR FRAUDULENT ACTS THAT MAY BE DETERMINED AND / OR IDENTIFIED BY
‘THE CORPORATION WHICH TENDS TO UNDERMINE OR DEFEAT THE OBJECTIVES OF
THE PROGRAM is committed by the ERRING [hospital management or] HEALTH CARE
provider OR SUSPENSION OF ACCREDITATION [:In addition, its accreditation shall be
suspended or revoked] from three (3) months to the whole term of accreditation, OR
BOTH SUCH FINE AND SUSPENSION / REVOCATION, AT THE DISCRETION ON THE
PART OF THE CORPORATION: Provided, {however}, That recidivists may not anymore
be accredited as a participant of the program;

B. _ VIOLATIONS OF A MEMBER - A fine [of not less than Five hundred pesos (P500)
nor-more than] Five thousand pesos {P5,000) and / OR imprisonment of not less than
six (6) months nor more than ane (1) year in case the violation is committed by the
member.

c VIOLATIONS OF AN EMPLOYER -

1. FAILURE / REFUSAL TO REGISTER / DEDUCT / REMIT THE
CONTRIBUTIONS - 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. 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 (P 5,000.00) 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 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.

2. 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 cavered employees or otherwise recover
from them THEIR [his]own contribution on behalf of such employees shall be punished
by IMPRISONMENT FOR not [exceeding one (1) year] LESS THAN SIX (6) YEARS
[months but not more than one year] AND ONE DAY TO TWELVE (12) YEARS AND A
FINE [not exceeding} OF FIVE [one] thousand pesos [P 1,000.00] (R 5,000.00),
multiplied by the total number of employees employed by the firm [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.

3. 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 Jess than six (6) years and ONE DAY BUT not more than twelve
(12) years and a fine not less than Ten Thousand Pesos (P10,000.00) nor more than
‘Twenty Thousand Pesos (P20,000.00). Any shortage of the funds or loss of the property
upon audit shall be deemed prima facie evidence of the offense.

D. OTHER VIOLATIONS - Ail 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 QF NOT LESS THAN FIVE THOUSAND PESOS
(P5,000) NOR MORE THAN TWENTY THOUSAND PESOS (P20,000), 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 ot other laws,
taking into consideration the rules on collection, remittances, and investment of funds
as may be promulgated by the Corporation]

E, _ MITIGATING AND AGGRAVATING CIRCUMTANCES - THE CORPORATION MAY
CATEGORIZE AND / OR DETERMINE THE APPLICATION OF MITIGATING AND
AGGRAVATING CIRCUMSTANCES THAT WILL AFFECT THE GRAVITY OF VIOLATIONS,
OFFENSES, ABUSES AND UNETHICAL PRACTICES AND THE LIABILITY OF THE ERRING
HEALTH CARE PROVIDER, MEMBER AND EMPLOYER.

F. CRIMINAL ACTION - CRIMINAL ACTION ARISING FROM A VIOLATION OF THE
PROVISIONS OF THIS ACT MAY BE COMMENCED BY THE CORPORATION OR THE
EMPLOYEE OR HEALTH CARE PROVIDER 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.

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

G. PROSECUTION OF OFFENSES - OFFENSES AS DEFINED IN THE
IMPLEMENTING RULES AND REGULATIONS AND OTHER PHILHEALTH ISSUANCES,
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.

H. 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 1S
WITHOUT PREJUDICE TO THE FILING OF FURTHER LEGAL ACTIONS IN THE PROPER
COURTS.

1. 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 [TS 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.

J. 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.

All other violations involving funds of the Corporation shall be 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. 11. 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”
cireulation.


SEC, 12, 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. 13. Repealing Clause ~ All laws, issuance or any part thereof inconsistent with
this Act are hereby repealed or modified accordingly.

SEC, 14, Effectivity - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,