NINETEENTH CONGRESS   
) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
EXPLANATORY NOTE 
The Philippine Health Insurance Corporation (PhilHealth) had been the subject of several 
congressional inquiry and national news reports in 2024 and 2025 due to the following: 
1.
Non-increase of its benefits and/or its irrelevance with the current economy;
2.
The transfer of 89.9 Billion Pesos of PhilHealth Funds to the National Treasury;
3.
The accumulation of its reserve funds which is currently estimated at 700 Billion Pesos; and
4.
The zero government subsidy for 2025.
In retrospect, it can be gleaned that most of PhilHealth’s problems, and the issues and concerns 
that arise in its operations, can be attributed to the laws that regulates the agency. The prime example 
of which are the vague interpretation of auditing laws governing advance payment of goods and 
services. 
However, Section 18 of Republic Act 11223 or the Universal Health Care Act states that “x x x 
PhilHealth shall endeavor to shift to paying providers using performance-driven, close-end, 
prospective payments x x x develop differential payment schemes that give due consideration to 
service quality, efficiency and equity x x x” (emphasis supplied). 
Further, Section 16 (d) of Republic Act 7875, as amended, states that PhilHealth has the power “x 
x x 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” (emphasis supplied). 
These rules are anchored on Article II Section 11 of the 1987 Philippine Constitution which state 
that “The State shall adopt an integrated and comprehensive approach to health development which 
shall endeavor to make essential goods, health and other social services available to all the people at 
affordable cost. There shall be priority for the needs of the under-privileged, sick, elderly, disabled, 
women, and children. The State shall endeavor to provide free medical care to paupers.” 
Hence, there is no reason for PhilHealth to accumulate large amount of reserve funds which it can 
very well use to improve its benefits for the Filipino people and payment mechanisms to Health 
Facilities. 
It is therefore proposed that PhilHealth adopt a prospective payment mechanism that will enable 
government-owned health facilities to receive “advance” payments for the health goods and services it 
will render to the public. The funds shall be used to improve their facility, equipment, and inventory to 
increase the quality of their healthcare delivery. 
The first phase of the implementation of this prospective payment mechanism shall be limited to 
government-owned facilities to enable PhilHealth and other health and financial governing agencies to 
assess the efficacy of this type of payment methodology and its effect in the improvement of standards 
of public health facilities. The mechanism may be extended to privately-owned health facilities after a 
reasonable amount of time and subsequent assessments. 
This bill seeks to support of the progressive realization of universal health care in the country and 
improve the standards of publicly-owned health facilities. 
In view of the foregoing, approval of this bill is earnestly sought. 
RUFUS B. RODRIGUEZ 
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February 5, 2025
4:26 pm


NINETEENTH CONGRESS 
) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
AN ACT 
MANDATING THE PHILIPPINE HEALTH INSURANCE CORPORATION (PHILHEALTH) TO 
ADOPT A PROSPECTIVE PAYMENT MECHANISM FOR GOVERNMENT-OWNED 
HEALTH FACILITIES, WITH THE PROVISION FOR FUTURE IMPLEMENTATION FOR 
PRIVATELY-OWNED HEALTH FACILITIES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title – This act shall be known as the “PhilHealth Prospective Payment 
Act”. 
SECTION 2. Declaration of Principle – It is the policy of the State to adopt an integrated and 
comprehensive approach to health development which shall endeavor to make essential 
goods, health and other social services available to all people at affordable cost. There shall 
be priority for the needs of the under-privileged, sick, elderly, disabled, women, and children. 
The State shall endeavor to provide free medical care to paupers. 
SECTION 3. Coverage. – This Act shall cover PhilHealth accredited health facilities owned 
by the National Government and Local Government Units. 
SECTION 4. Definition of Terms. – The following terms, as used in this Act, shall mean: 
Drugs and Medicines – Pharmaceutical products prescribed by licensed health 
professionals and dispensed by licensed pharmacies within or outside health facilities 
where the patient is admitted. 
Diagnostic Procedures – Tests required by licensed medical professionals to determine 
a person’s physical and medical condition, and identify illnesses and diseases. This may 
be done within or outside the health facility where the patient is admitted. 
Health Facilities - Refers to hospitals, clinics, and other healthcare institutions accredited 
by PhilHealth to provide healthcare services to PhilHealth members. These facilities are 
responsible for the submission of claims for reimbursement of services rendered to 
PhilHealth members 
In-patient –refers to an individual who requires treatment and observation and 
accommodated inside a health facility. 
Out-patient –refers to an individual who requires treatment and/or observation, whether in 
the emergency room, ambulatory basis, or clinic, which does not require admission in health 
facilities. 
PhilHealth Benefits - Refers to the wide-range of benefits provided by PhilHealth to its 
members which may be availed at accredited health facilities. 
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SECTION 5. Prospective Payment Mechanism – PhilHealth shall pay government-owned 
health facilities prospectively based on their historical claims and in consonance with 
applicable laws, rules, and regulations. These prospective payments shall be utilized by the 
health facilities as advance payment for goods and services that they will render to the public 
and shall be used in accordance with applicable laws, rules, and regulations 
 
SECTION 6. Zero Out-of-Pocket Payment – PhilHealth, in coordination with other regulatory 
bodies and government agencies, shall ensure that all member and dependents admitted in 
government-owned health facilities shall have zero out-of-pocket payment, including the 
availment of drugs and medicines, diagnostic procedures, and analogous goods and services 
related to the admission. 
 
SECTION 7. Implementing Rules and Regulations – PhilHealth shall promulgate the 
necessary rules and regulations for the proper implementation of this Act not later than ninety 
(90) days from its effectivity. 
 
SECTION 8. Separability Clause – If any provision or part of this Act is declared 
unconstitutional, the remaining parts or provisions not affected shall remain in full force and 
effect. 
 
SECTION 9. Repealing Clause. – All laws, executive orders, rules and regulations, and 
issuances or parts thereof which are inconsistent to and contrary with the provisions of this 
Act are hereby repealed and amended accordingly. 
 
SECTION 10. Effectivity. – This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in a newspaper of general circulation. 
 
Approved,