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PhilHealth Management Neutralizes Fraud Syndicate

Just over two months under new management, the Philippine Health Insurance Corporation (PhilHealth) bared that it has uncovered and neutralized a syndicate that ripped-off a private firm’s multimillion-peso premium payment.

“We’ve already called in the National Bureau of Investigation and the Anti-Money Laundering Council to complete the investigation toward filing the appropriate criminal charges against the culprits,” said Dr. Eduardo P. Banzon, who was designated PhilHealth President and Chief Executive Officer only last Oct.17.

Banzon said the premium diversion scam was exposed when PhilHealth staff performing heightened verification and reconciliation of remittances detected a discrepancy in premium collection data.

“A premium payment check was encashed at a private commercial bank. The money was not credited to PhilHealth’s account and was diverted elsewhere,” Banzon said.

It may be recalled that a few years ago, there was a similar tax diversion scheme that was uncovered with the Bureau of Internal Revenue. In the tax diversion scam, syndicate members, including BIR staff and employees of private companies who colluded with the erring bank officers, are now facing trial for money laundering, fraud and falsification. .

“There are crooks everywhere. We are warning them. We will spare no effort in running after them. They will be caught, and they will be put behind bars,” Banzon said. “We have zero tolerance for fraud, consistent with President Aquino’s ‘daang matuwid’’ policy.”

In response, Banzon created an investigation panel last December 7, 2011 and has further designated a senior executive as chief anti-fraud surveillance officer who will report directly to him and the Board.

From the investigation, it now appears that a syndicate has been operating as early as 2009. Initial findings indicate that over a hundred million pesos in premium payments were encashed in a private commercial bank. “These premiums never reached PhilHealth,” Banzon said. “We will run after the offenders and take all steps to ensure that these money meant for the health insurance dues of our members are properly remitted and credited to their account,” he added.

“We’ve also reinforced security controls to protect the integrity of our database,” Banzon said. Administrative charges are now being readied while the filing of the necessary criminal charges is being coordinated with the NBI.

Meanwhile, Banzon urged all companies “to observe existing (remittance)policies and procedures as prescribed by PhilHealth, and to immediately report any attempts to circumvent protocols to their nearest (PhilHealth) Service Office.”