Introduced by Rep. Anthony R.T. Golez ]r. MD, MBAH
EXPLANATORY NOTE
The Health Maintenance Organizations (HMO) Bill of 2023, herein referred to
as the  "Bill,"  is  an essential piece of legislation aimed  at ensuring the access  of all
Filipinos to the highest attainable standard of health while enhancing the financial
security and quality of healthcare services provided by HMOs. The Bill recognizes
healthcare as a fundamental right of every Fihpino citizen and endeavors to create a
comprehensive  regulatory framework for  HMOs  to  meet the  growing healthcare
demands of the population.
The Philippines, like many countries, faces significant challenges in providing
accessible and affordable healthcare services to its citizens.  The current healthcare
system requires strengthening to cater to the evolving needs of the population. HMOs
play a pivotal role in contributing to the improvement of the nation's health and well-
being  by  providing  accessible  healthcare  services  to  individuals  and   families.
Therefore, it becomes crucial to establish comprehensive and transparent regulations
for HMOs to ensure their financial stability, sound management, and compliance with
ethical standards in delivering healthcare services.
The  Bill  is  firmly  grounded  in  the  principles  enshrined  in  the  Philippine
Constitution, particularly Article H Sections 15 and 16, which guarantee the right to
health and promote the welfare of the people. Additionally, the Bill aligns with Article
XIII Section 11, which recognizes the duty of the state to adopt an integrated and
comprehensive approach to  health  development.  Thus,  the Bill seeks  to  create an
enabling  environment  for  the  private  sector's  active  participation  in  providing,
funding,   and   managing   healthcare   services   while   ensuring   alignment   with
constitutional rights and the National Agenda of the Philippines.
The  obj.ectives  of the  Bill  are  multi-faceted.  It aims  to  recognize  HMOs  as
unique    medical    service    providers    combining    financial    management    and
direct/indirect healthcare provision. By establishing a national framework for HMO
regulation, the Bill seeks to uphold the rights of the people, ensure the delivery of
quality and timely health services, and protect patients' rights during the delivery of
healthcare  products  and  services.  The  creation  of  the  Center  for  Managed  Care
Services,  an  attached  agency  of  the  Department  of  Health,  further  supports  the
objective of effective coordination, oversight, and regulation of HMOs in the country.


In promoting competition, efficiency, and innovation, the Bill fosters growth in
the  healthcare  industry  while  safeguarding  the  interests  and  rights  of healthcare
consumers. By improving the interoperability between Phi]Health and HMOs, the Bill
aims to decrease or eliminate out-of-pocket expenditures for health in the country,
thus reducing financial barriers to access.
The  Bill  outlines  key  definitions,  ensuring  clarity  and  consistency  in  its
application. It sets forth the qualifications and responsibilities of an Actuary, ensuring
the  actuarial  soundness   of  HMO   operations.   The  Bill   also   defines   the  terms
"Agreement,"  "HMO,"  "Managed  Care,"  and  others,  providing  a  comprehensive
foundation for the regulation and understanding of HMO operations.
Under the Bill, the Center for Managed Care Services is tasked with critical
responsibilities,   such   as   registration   and   licensing   of   HMOs,   regulation   and
supervision   of  HMO   activities,   consumer  protection,   establishment  of  quality
standards,  dispute  resolution mechanisms,  data  collection,  and collaboration with
relevant  stakeholders.  The  Administrator  of  the  Center  plays  a  central  role  in
executing the objectives and powers conferred upon the Center.
The Bill emphasizes the importance of transparency and consumer protection.
It establishes provisions for secrecy to protect sensitive personal information derived
from healthcare services. Additionally, the Bill includes a conflict of interest clause,
ensuring  the  Collegiate  Board's  impartiality  and  integrity  in  its  decision-making
processes.
The Bill lays down clear provisions regarding the registration and licensing of
HMOs. The minimum required paid-up capital is set to ensure the financial stability
and sustainabflity of HMOs. The grandfather rule allows existing HMOs to continue
their  operations  while  complying  with  the  new  requirements  within  a  given
timeframe.
To  ensure  ease  of  doing  business,  the  Bill  mandates  timely  processing  of
applications by the Center. It also imposes penalties for violations, including fines,
suspension, and revocation of licenses, as well as asset freezing in cases of suspension
or revocation.
Lastly, the Bill highlights the importance of data dissemination, publication of
licensed  HMOs,  and  reporting  of  the  Center's  activities  to  the  Congress  of  the
Philippines.
In conclusion,  the HMO Bill of 2023 is a critical step towards achieving the
government's vision of providing accessible, affordable, and quahity healthcare to all
Filipinos. By establishing a robust regulatory framework and promoting collaboration
among stakeholders, the Bill seeks to create a more inclusive and efficient healthcare
system for the nation.
HON.ANTZ8fN¥OwzioLEz|R.MD,MBAH
Malasahit at Bayanihan Party Lj.st


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Quezon City, Metro Manila
Nineteenth Congress
Second Regular Session
HOUSE BILL No.8 7 Bi'
Introduced by Rep. Anthony R.T. Golez Tr. MD, MBAH
ANACT
ENSURING THE ACCESS OF ALL FILIPINOS TO THE HIGHEST
ATTAINABLE STANDARD OF HEALTH AND IMPROVING HEALTH
FINANCING SECURITY OF ALL FILIPINOS THROUGH HEALTH
MAINTENANCE ORGANIZATIONS, REGULATING THEIR OPERATIONS BY
ESTABLISHING A CENTER FOR MANAGED CARE SERVICES,
APPROPRIATING FUNDS THERETO AND FOR OTHER PURPOSES
Be  it enacted by  the  Senate  and  House  Of Representatwes  Of the  Philippines  in  Congress
assembled:
SECTION  1.  Short Title.  -  This  Act shall be known  as  the ``Health  Maintenance
Organizations (HMOs) act of 2023."
SECTION 2.  Statement of Policy. -  Pursuant to Article 11 Sections  15 and  16  and
Article XIII Section 11 of the Philippine Constitution, it is hereby declared a policy of
the State to:
a.   Enhance  the  accessibility  to  affordable  health  care  services  through  the
participation of the private sector in providing, funding, managing health
care services to the people.
b.   Ensure that all managed care services managed by the private sector are
aligned with the constitutional rights of all people to the highest attainable
standard of health and with the National Agenda of the Philippines
c.   Encourage the growth of Health Maintenance Organizations (HMOs) in the
country by providing government support, incentives, technical assistance,
and ease of doing business.
SECTION 3. Objectives. - In line with the above policy, this Act seeks to:
a.   Recognize HMOs as unique medical service providers combining financial
management and the direct and indirect provision of health services
b.   Establish  a  national  framework  for  the  regulation  of  HMOs  that  shall
uphold the rights of the people, ensure the dehivery of quality and timely
health services, and upholds the rights of patients in the delivery of their
product and services.


c.   Establish the Center of Managed Care Services which shall be an attached
agency    of the  Department  of  Health  that  shall  be  responsible  for  the
coordination with, oversight of, and regulation of HMOs in the country.
d.  Improve the inter-operability between PhilHealth and HMOs to further
decrease or otherwise eliminate out-of-pocket expenditures for health in
the country.
SECTION 4. Definition of Terms. - When used in this Code, the following terms shall
mean:
a.   Actuary- a  person with necessary training, qualif].cation  and experience
and a fellow of the Actuarial Society of the Philippines. He shall, among
others, compute rates and reserves for health care plans on the basis of
experience tables and determine the financial soundlessness of health care
agreements and operations of HMOs.
b.   Agreement- a contract entered into by an HMO with a member or group of
members  or  a  corporation  on  behalf  of  its  employees  and/or  their
dependents, for the former to provide or arrange to provide pre-agreed or
designated health care services to the latter, for a fixed period of time and
for a specified fee.
c.   Corporation- a juridical person as defined by law, duly registered with
Securities and Exchange Commission.
d.  Department- the Department of Health (DOH)
e.   Center- the Center for Managed Care  Services (CMCS)
f.    Health  Maintenance  Organization  (HMO)-  a  type  of  managed  care
organized in accordance with law to  provide pre-agreed or designated
health care services to i ts eurolled members for a fixed periodic fee and for
a specified period of time. It uses a system of health care delivery called
managed care that influences utilization and costs of services and measures
performance resulting in quality cost€ffective care. It integrates financing
and delivery of health care services through managed health plans which
may be in the form of a comprehensive HMO plan, preferred provider plan
managed indemnity or self-insured plans, third party administration plan
and  such other that fall under the definition of a  managed  health  plan
under paragraph (k) of this section.
9.   Managed Care- a system of health care delivery that influence utilization
and  cost  of services  and  measures  performance with  a  goal  to  deliver
quality and cost-effective health care.
h.   Member or Eurollee- an individual or a person who is part of a group or
an employee  and/or  dependents  or  a  corporation,  who  entered  into  a
contract with an HMO;
i.    Person-a natural orjuridical person as defined by law.


j.    Provider- a health professional such as physician, dentist, nurse, midwife,
physical therapist or health care professional's group, or a health facility
such as hospital, diagnostic clinic, pharmacy hicensed or authorized by the
proper government agency to provide health care services.
k.   Membership Fee- the amount of money paid by an individual member,
group corporation on behalf of its employees and the latter's dependents,
in payment for pre-agreed set of health services, for a specific period of
time.
CHAPTER ONE - HEALTH MAINTENANCE CONTRACT
SECTION  5.  Health  Maintenance  Contract.  A  Health  Maintenance  Contract is  a
contract entered into between a health maintenance organization with a subscriber or
group of subscribers to provide coverage for comprehensive health care services in
exchange  for  a  prepaid  per  capita  or prepaid  aggregate  fixed  sum.  It may  cover
individuals, families,  or group  of people with an established  and  fixed  affinity of
association.   A   Health   Maintenance   Contract   shall   also   include   Third-Party
Administration contracts or Administrative Services Only contracts.
SECTION 6. Exclusivity. Only majority-owned Filipino corporations licensed to do
business   as   Health  Maintenance  Organization  may  issue   Health  Maintenance
Contracts.   Foreign   HMOs,   hsurance   Companies,   Surety   Providers,   Pre-Need
Companies, Third-Party Administrators and other corporations are prohibited from
issuing Health Maintenance Contracts. Any other companies offering a product akin
to  a  Health  Maintenance  Contract  such  as  Third  Party  Administrators  must  be
registered as an HMO under this Act.
SECTION 7. Exemption from Value Added Tax. All Health Maintenance Contracts
issued by registered HMOs shall be exempt from Value Added Tax but the same shall
be subject to Documentary Stamp Tax at the same rate applied to Insurance Contracts.
SECTION 8. Exemption from Income Tax. All benefits received or receivable by any
person  arising  from  a  Health  Maintenance  Contract  is  exempt  from  income  tax.
Premiums paid by the employer on behalf of their employees and their dependents
shall not accrue as income on the employee for the purpose of the latter's taxation.
SECTION 9.  Secrecy.  The  details  and  contents  of a  Health  Maintenance Contract
including the availments arising from contracts and all sensitive personal information
generated and derived from the negotiations, consummation, and delivery of health
care services up to the period of five (5) years from the date of its termination shall not
be disclosed to any third party including government investigations without prior
written consent of the data subject. In case of corporations, such prior written consent
must be exercised by its President with the consent of its Board and its consent shall
only extend to its collective data and to the individual data of all members under its
plan which shall be exercised by each respective member prior its disclosure. In case
of families, such prior written consent must be exercised by the father or mother, or if


absent by the oldest member of the family, and such consent may be voidable by any
of its family members.
CHAPTER TWO - THE CENTER FOR MANAGED CARE SERVICES
SECTION 10.  Creation and Nature - There is hereby created a Center for Managed
Care Services, which shall be an attached agency of the Department of Health. The
Center shall be headed by an Administrator and guided by a collegiate body or the
Board.  The  CMCS  shall  serve  as  the  primary  regulatory  body  responsible  for
overseeing the operation and performance of HMOs in the Philippines.
SECTION  11:  Powers  and  Functions  of  the  CMCS.  The  CMCS  shall  have  the
following powers and functions:
a)   Registration   and   Licensing:   The  CMCS   shall   be   responsible  for  the
registration and licensing of Health Maintenance Organizations that comply
with the requirements and standards set forth in this law.
b) Regulation and Supervision:  The CMCS shall regulate and  supervise the
activities of HMOs to ensure compliance with the provisions of this law and
other relevant regulations. It shall have the authority to inspect and investigate
HMOs, issue guidelines, and impose sanctions for violations.
c)  Consumer  Protection:  The  CMCS  shall  protect  the  interests  of  HMO
subscribers by ensuring that HMOs adhere to fair and transparent policies in
their service offerings, billing, and claims processing.
d) Quality Standards: The CMCS shall establish and enforce minimum quality
standards for healthcare services provided by HMOs to guarantee the delivery
of safe and effective medical care to subscribers.
e) Dispute Resolution: The CMCS shall establish a mechanism for the fair and
timely resolution of disputes between HMOs and their subscribers, including
appeals for denied claims.
f) Data Collection and Reporting: The CMCS shall collect and maintain data on
HMO performance,  subscriber satisfaction,  and overall healthcare trends  to
inform policy and decision-making.
g) Collaboration: The CMCS shall collaborate with other relevant government
agencies,  healthcare  providers,  and  stakeholders  to  promote  a  unified  and
integrated healthcare system I.n the Philippines.
SECTION 12. Administrator.  The Administrator shall be appointed by the President
of the Republic of the Philippines for a term of six (6) years without reappointment
and  who  shall  serve  as  such  until  the  successor  shall  have  been  appointed  and
qualified. If the Administrator is removed before the expiration of his term of office,
the reason for the removal must be published.


The Administrator shall have the duty to see that all laws relating HMOs are faithfully
executed and to perform the duties imposed upon him by this Act.
The  Administrator  may   issue  such  ruhngs,   instructions,   circulars,   orders   and
decisions as may be deemed necessary to secure the enforcement of the provisions of
this Act, to ensure the efficient regulation of the insurance industry in accordance with
global best practices and to protect the public. Except as otherwise specified, decisions
made by the Administrator shall be appealab]e to the Office of the President.
The CMCS shall not be bound by the technical rules of evidence.
SECTION 13.  The Collegiate Board of Directors. -
a)  Composition - The Corporation shall be governed by a Collegiate Board of
Directors, composed of five members as follows:
i.   The secretary of Health -Chairman
ii.   The Administrator of the Center for Managed Care Services (CMCS)
-Vice-Chairman
iii.   One representative from the Department of Trade and Industry (DTI)
iv.   One representative from the Department of Finance - Treasury (DOF-
Treasury)
v,   One  representative  from  the  Health   Maintenance  Organization
(HMO) industry.
b)  Appointment and Tenure - The President of the Philippines shall 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
Collegiate 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
Collegiate  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.
c)   Meetings and Quorum  -  The Collegiate 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
three (3) voting 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. In the event of a tie in voting, the
Chairman, who is the Secretary of Health, shall cast the deciding vote.
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.
SECTION 14: Industry Representative. The HMO industry representative shall be an
individual  with  significant  knowledge  and  experience  in  the  HMO  sector.  The


industry  representative  shall  be  selected  based  on  their  expertise,  integrity,  and
commitment to promoting the welfare of HMO subscribers and the industry.
SECTION 15: Conflict of Interest. Members of the Collegiate Board shall avoid any
conflj¢t of interest that may drise from their official duties. They shall refrain from
participating in any decision-making process that may directly or indirectly benefit
their personal or financial interests. Any member of the Collegiate Board found to
have a conflict of interest shall be subject to appropriate sanctions, as determined by
the CMCS.
SECTION   16:  Reporting and Accountability The CMCS shall regularly report its
activities, accomplishments, and financial status to the Collegiate Board for review
and assessment. The Collegiate Board shall submit an annual report to the Congress
of  the  Philippines,  which  shall  include  an  evaluation  of  the  HMO  industry's
performance and recommendations for further improvements.
Section 17. Powers of the Administrator.  The Administrator, with the concurrence
and upon consultation with the Board, shall have the following powers and functions:
a)  Formulate  policies  and  recommendations  on  issues  concerning  the  HMO
industry, advise Congress and other government agencies on all aspects of the
HMO industry and propose legislation and amendments thereto;
b) ,Approve,  reject,  suspend  or  revoke  licenses  or  certificates  of  registration
provided for by this Act;
c)   Impose sanctions for the violation of laws and the rules, regulations and orders
issued pursuant thereto;
d)  Prepare,  approve,  amend or repeal rules, regulations and  orders,  and  issue
opinions and provide guidance on and supervise compliance with such rules,
regulations and orders;
e)   Enhist  the  aid  and  support  of,  and/or  deputize  any  and  all  enforcement
agencies of the government in the implementation of its powers and functions
under this Act;
f)   Issue cease and desist orders to prevent fraud or injury to the public;
g)  Punish  for  contempt  of  the  Administrator,  both  direct  and  indirect,  in
accordance with the pertinent provisions of and penalties prescribed by the
Rules of Court;
h)  Compel the officers of any registered HMOs to call meetings of stockholders or
members thereof under its supervision;
i)   Issue  subpoena  duces  tecum  and  summon  witnesses  to  appear  in  any
proceeding of the Center and,  in appropriate cases,  order the examination,
search and seizure of all documents, papers, files and records, tax returns, and
books  of  accounts  of  any  entity  or  person  under  investigation  as  may  be
necessary  for  the  proper  disposition  of  the  cases  before  it,  subject  to  the
provisions of existing laws;


j)    Suspend or revoke, after proper notice and hearing, the license or certificate of
authority of any entity or person under its regulation, upon any of the grounds
provided by law;
k)  Conduct an examination to determine compliance with laws and regulations if
the  circumstances   so  warrant  as   determined   by   appropriate  rules   and
regulations;
I)   Investigate not oftener than once a year from the last date of examination to
determine whether an institution is conducting its business on a safe and sound
basis: Provided, That, the deficiencies/ irregularities found by or discovered by
an audit shall be immediately addressed;
in) Inquire into the solvency and liquidity of the institutions under its supervision
and enforce prompt corrective action;
n)  To retain and utilize, in addition to its annual budget, all fees, charges and other
income derived from the regulation of HMOs
o)  To fix and assess fees, charges and penalties as the Administrator may find
reasonable in the exercise of regulation; and
p)  .Exercise such other powers as may be provided by law as well as those which
may  be  implied  from,  or which  are  necessary  or incidental  to  the  express
powers granted the CMCS to achieve the objectives and purposes of this Act.
SECTION   18.   Exclusive   Powers   of   the   Administrator.   In   addition   to   the
administrative sanctions provided elsewhere in this Act, the Administrator is hereby
authorized, at his discretion, to impose upon HMOs companies, their directors and/or
officers and/or agents, for any willful failure or refusal to comply with, or violation
of any provision of this Act, or any order, instruction, regulation, or ruhing of the
Administrator, or any commission or irregularities, and/or conducting business in an
unsafe or unsound manner as may be determined by the Administrator, the following:
(a) Fines not less than Five thousand pesos (P5,000.00) and not more than Two
hundred thousand pesos (P200,000.00); and
(b)  Suspension,  or  after  due  hearing,  removal  of directors  and/or  officers
and/ or agents.
The Administrator shall have the power to adjudicate claims and complaints arising
from  Health  Maintenance  Contracts  issued,  where  the  amount  of  any  such  loss,
damage or liability, excluding interest, cost and attorney's fees, being claimed or sued
does not exceed in any single claim Five million pesos (P5,000,000.00).
The  Administrator  may  authorize  any  officer  or  group  of officers  under  him  to
conduct investigation, inquiry and/or hearing and decide claims and he may issue
rules  governing  the conduct of adjudication and  resolution of cases.  The Rules of
Court shall have suppletory application.
The party filing an action pursuant to the provisions of this section thereby submits
his person to the jurisdiction of the Administrator. The Administrator shall acquire


jurisdiction over the person of the impleaded party or parties in accordance with and
pursuant to the provisions of the Rules of Court.
CHAPTER THREE - REGISTRATION AND LICENSING
SECTION  19.  Registration.  -  No  entity,  natural  or juridical,  shall  operate  in  the
Philippines  without first obtaining registration and  a license from  the CMCS Any
Filipino  corporation,  duly  formed  and  organized  under  the  Revised  Corporation
Code, may register and apply for a license to conduct business as an HMO with the
Center provided that it has a minimum paid-up capitalization of not less than TWO
HUNDRED MILLION PESOS (PHP 200,000,000.00).
HMOS  shall comply with the minimum  capital requirements  set by  the CMCS to
ensure their financial stability and ability to provide healthcare services. HMOs must
demonstrate compliance with the quality standards set by the CMCS and  submit
periodic reports as required by the CMCS.
SECTION 20: Minimum Required Paid-up Capital
a)  All  Health  Maintenance Organizations  (HMOs)  seeking  registration  and
licensing from the CMCS must have a minimum required paid-up capital of
Two Hundred Mimon Pesos (PHP 200,000,000.00) upon application.
b) The paid-up capital requirement shall be subject to periodic review by the
CMCS  to  ensure  its  adequacy  in  supporting  the  financial  stabihity  and
sustainability of HMOs.
c) HMOs shall submit proof of the required paid-up capital as part of their
application for registration and licensing. Failure to meet the minimum capital
requirement   shall   result   jn   the   denial   of  their   application   until   such
requirement is satisfied.
d) The CMCS shall issue guidelines and regulations detailing the procedures
for  verifying   and   validating   the  paid-up   capital   of  HMOs   during  the
registration process.
SECTION 21: Adjustment of Minimum Paid-up Capital
a)  The  CMCS,  in  consultation  with  relevant  stakeholders  and  based  on
prevailing economic conditions,  may adjust the minimum  required  pal d-up
capital to keep pace with inflation and market demands.
b) Any adjustment to the minimum required paid-up capital shall be done with
due notice to all existing HMOs, giving them a reasonable period to comply
with the new requirement.
SECTION  22.   Grandfather   Rule.   All   HMOs   duly   licensed   by  the   Insurance
Commission upon approval of this Act shall be deemed registered and licensed to
conduct business  as  an HMO provided that all HMOs  are given five  (5)  years  to
comply with any requirements imposed by this Act or mdy be imposed by the CMCS.


SECTION 23. Term. All licenses issued by the CMCS shall be effective for not more
than five (5) years and renewable thirty (30) days from the date of its expiry.
SECTION 24. Ease of doing business. All applications submitted to the CMCS shall
be  disposed  of  within  thirty  (30)  days  from  the  submission  of  all  the  required
documentations as may be required by the CMCS. If the said application has not been
denied or acted upon by the CMCS it shall be deemed approved.
SECTION 25.  Grounds  for Revocation of License.  -  The CMCS  shall  revoke  the
license of any Health Maintenance Organization, with strict adherence to due process,
on the following grounds:
a) Repeated violations of this Act.
b) Unjustified refusal to provide the health care services contracted for by a
member as provided for in the agreement;
c)  Impairment of the financial status of HMO, as may be determined by the
CMCS during suspension
In all cases of revocation, the CMCS shall have the authority to assign the agreements
of the HMO whose license was revoked, to other existing HMOs, or to order such
applicable  remedies  in  order  to  protect  the  rights  derived  by  members  from
agreements.
SECTION 26. Grounds/or Suspension of License. - The license to operate issued to
HMOS may be suspended by the CMCS, with strict adherence to due process, on the
following grounds;
1.   When based on the financial reports, continued operation of the HMO
business is no longer financially sound;
2.   When  without justifiable  cause,  agreements  with  members  are  not
honored;
3.   When the statements in the application for license or renewal thereof
are found to be false, misleading, inadequate or incomplete such that
the Department cannot ascertain the true status from such statement,
sufficient to arrive at an honest appraisal of the true capability of the
HMO;
4.   When  the  decision  of  the  CMCS  or  arbitration  of complaint  is  not
honored by an HMO: and
5.   When an HMO continuously violates the rules and regulations issued
by the CMCS
SECTION 27.  Penal clause.          The following administrative sanctions are hereby
imposed for violations of this Act:
a)  A fine of Twenty Thousand  Pesos  (20,000.00)  for the first violation  of the
provisions of this Act, Thirty Thousand Pesos (30,000.00) for the second; and


Fifty  Thousand  Pesos  (50,000.00)  for  the  third  violation.  For  the  fourth
violation of this Act, the provision of Section 25, shall apply;
b)  A fine of One Hundred Thousand Pesos (100,000.00) every time the license of
the HMO is  suspended.  Provided,  that the payment of this  fine  shall  not
absolve the HMO of its obligations under the agreements it has contracted
with members and/ or participating or accredited providers.
c)   An  order  to  freeze  the  assets  of the  HMO  suspended  or revoked  for  the
protection of investors, providers and members.
The amount that may be collected as fines shall be retained by the CMCS for its use in
the information dissemination mentioned in the following section. Provided, that a
separate account be maintained by the CMCS for such purpose.
Violations  committed  by  HMOs  in  the  direct  provisions  of  health  care  services,
performance of laboratory or diagnostics services, operations of hospitals or clinics
shall be subject to applicable rules and regulations of the Department of Health.
SECTION 28. Reinstatement of Suspended or Revoked Licenses. - The CMCS shall
order the reinstatement of a suspended or revoked license upon reasonable showing
that the ground for which the suspension or revocation was based has ceased to exist
and that the HMO has sufficiently complied with the requirements the CMCS may
deterthine for such reinstatement,
SECTION  29.  Publication.  -  The  CMCS  shall  inform  the  pubhic  by  publishing
periodically:
a)   List of licensed HMOs.
b}  Suspension and/or revocation of the license of HMOs, copies of which shall
be   furnished   to   associations   of  the   medical   profession,   hospitals   and
employers who shall inform their members accordingly.
SECTION   30.   Exemption  from  Anti-Money   Laundering   Compliance.   Health
Maintenance  Organizations  (HMOs)  shall  be  excluded  from  the  obligations  and
requirements set forth in the Anti-Money Laundering Act of 2001 (Republic Act No.
9160) and any amendments thereto. However, HMOs shall still be subject to reporting
suspicious   transactions   involving   large   or   unusual   financial   activities   to   the
appropriate authorities as mandated by relevant laws and regulations.
SECTION 31. Appropriations. -The amount necessary for the implementation of this
Act shall  be included  in the General Appropriations  Act of the year following its
enactment and every year thereafter.
SECTION 32. Implementing Rules and Regulations. - The CMCS shall be organized
and shall promulgate the rules and regulations necessary to implement this Act within
NInety (90) days from its approval. Such rules and regulations shall be furnished to
HMOs and concerned sectors and shall take effect upon publication in newspaper of
general circulation.


SECTION  33.  Separability  Clause.  -  If  any  provision  of  this  Act  is  declared
unconstitutional or invalid, the other provisions not affected by such declaration shall
remain in full force and effect.
SECTION  34.   Repealing   Clause.   -   All   laws,   decrees,   ordinances,   rules,   and
regulations, executive or administrative orders or parts thereof inconsistent with tis
Act are hereby repealed, amended or modified accordingly.
SECTION 35. Effectivity.  - This Act shall take effect fifteen (15) days following its
publication in newspaper of general circulation.
ALpproved,