PhilHealth implements 'no balance billing' scheme

MANILA, Philippines - When Norycel Capistrano, 36, gave birth to her youngest daughter by cesarean operation in 2006, she did not have to spend a cent. Her bill ran up to P18,000 at the state-run Dr. Jose Fabella Memorial Medical Center, but everything was shouldered by the Philippine Health Insurance Corp. (PhilHealth).

Four years later, when her father suffered a heart attack and was confined at the Philippine General Hospital, PhilHealth paid P30,000 of the P36,000 bill.

“Maternity and my father were not covered by my Medicard,” explained Norycel, who works at The STAR as editorial assistant. “That’s why we preferred government hospitals. It’s a good thing that PhilHealth benefits are okay.” That is, for now.

Norycel, like other PhilHealth members, is worried that the subsidy rates for selected medical cases and surgical procedures would be reduced once PhilHealth implements a new payment scheme.

Called the “case payment” or the “per-case payment,” the scheme assigns fixed rates that PhilHealth reimburses for specific cases. Right now, only 23 cases and procedures are covered by the scheme, but PhilHealth intends to eventually implement it in all cases.

The per-case payment scheme applies to both public and private hospitals accredited by PhilHealth. “Sponsored program members” of PhilHealth or the “poorest of the poor” are covered by the “no balance billing” (NBB) scheme, wherein doctors and hospitals are prohibited from charging more than the rates set for the 23 specific cases and surgical procedures.

The NBB is now being implemented in all government hospitals (since Sept. 1, based on Circular No. 011-2011), and will eventually be introduced in private hospitals as well, although the latter may voluntarily implement it now.

The NBB essentially covers 5.2 million families that have been certified as “poorest of the poor” through the Social Welfare department’s National House Targeting System (NHTS)–Proxy Means Test. Their premiums are paid for by the national government. Those sponsored by local government units can also avail themselves of the NBB scheme.

The NBB also covers outpatient packages for treatment of tuberculosis, malaria, and human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS).

The twin policies are supposedly part of the Aquino government’s effort to attain the universal health coverage by the end of 2013.

‘Empowering members’

“What if a case becomes complicated? Maybe if you go to a government hospital, you’ll be covered well, but what if you go to a private hospital? I may have to pay more,” Norycel said.

PhilHealth president and chief executive officer Dr. Eduardo Banzon said the new payment scheme would lead to the “empowerment” of PhilHealth members since it would make the terms of payment for health interventions more transparent.

“You’ll have an effect where patients will start demanding lower rates because they know how much we will be paying. Hospitals will not charge over and above what we will cover,” Banzon said.

The new schemes are also designed to minimize fraudulent claims by health care providers, he said. “Through this system, our members will be able to predict how much we are paying for the services rendered to them,” he said.

The two payment mechanisms, he added, are designed to replace the fee-for-service scheme, wherein patients are charged different rates for the same services, depending on the type of hospital, medicines administered to them, and the standards of the rooms they occupy.

PhilHealth believes that the fee-for-service scheme is prone to padding by doctors and hospitals, or by the health care providers.

PhilHealth could not immediately provide information on padded claims. But in 2007, the Senate investigated the health insurance agency for its estimated P4-billion losses since 1995 due to alleged fraudulent practices by some doctors and hospitals.

The new payment mechanisms are also meant to facilitate reimbursements by hospitals. Currently, hospitals complain, it takes at least six months for PhilHealth to process and release reimbursements.

Following are reimbursement rates set in the circular for some specified cases

Medical

• Dengue 1 (dengue fever and dengue hemorrhagic fever Grades I and II), P8,000

• Pneumonia II (high risk), P32,000

• Essential hypertension, P9,000

• Cerebral infraction (CVA 1), P28,000

• Newborn care package in hospitals and lying-in clinics, P1,750

Surgical

• Radiotherapy, P3,000

• Hemodialysis, P4,000

• Maternity package, P8,000

• Cesarean section, P19,000

• Appendectomy, P24,000

Resistance

Banzon acknowledged that PhilHealth has to go slow on implementing the new directive as some private hospitals are expected to resist it strongly.

“The problem really would be the no balance billing (scheme). The challenge for us is when we can roll that out,” said Banzon. He said he expects hospitals to resist it “100 percent.”

Private Hospitals Association of the Philippines (PHAP) president Dr. Rustico Jimenez said many of their 800 member-hospitals might no longer accept PhilHealth members if the latter insists on implementing a fixed-rates system.

“How can they say that this particular laboratory (test) is not needed if they are not practitioners? Many of those involved in policy-making do not really know what we do in hospitals, how we test and take care of patients,” he said.

He said a laboratory test done on a patient may appear unnecessary for PhilHealth personnel, but for a doctor it is needed to validate a patient’s condition.

“So what happens now? If a patient needs a procedure or a laboratory test that PhilHealth does not want to cover, should we make the patient pay for them?”

“PhilHealth used to shoulder up to P40,000 for cesarean procedure, but now it will pay only P19,000. What does that mean? If you give birth via cesarean and there’s some complications, you will be the one to pay above and beyond PhilHealth’s coverage, which is very small,” he said.

But Dr. Kenneth Hartigan-Go, executive director of Asian Institute of Management-Dr. Stephen Zuellig Center for Asian Business Transformation, said the new case payment system is “like a value package, where everything is inside, all inclusive. That means room and board, doctor’s fee, lab fee, procedure fee, and medicine fee.”

The mechanism, he said, also presumes that the “hospitals and doctors will do the right thing, using a standard protocol in managing the patient.”

To prevent doctors from requiring more laboratory tests or medicine than what’s deemed needed by the patient, the hospital will be made to explain if it charges more than the set rate for the patient’s package of treatment.

“So ideally, case rates payment will work only very well in a situation where there’s no balance billing, and if there’s honesty, good monitoring, and evaluation,” Go said.    

‘Your loss, not ours’

Dr. Robert So, PhilHealth senior manager for standards and monitoring, is unfazed by PHAP’s threat.

“Being accredited by PhilHealth is not compulsory. (Hospitals) actually pay to be accredited. Everything is voluntary,” he said.

It’s the hospitals which would suffer losses if they reject PhilHealth members. In 2010, PhilHealth paid P33 billion in reimbursements.

“That is the amount that they will lose, and maybe more than that since we are aiming for universal health coverage. We are the biggest payer in health,” So said.

Meanwhile, Banzon conceded that PhilHealth will have to increase its premium eventually to provide optimal “financial risk protection” to its members.

“If our premium is low, we cannot afford (expanded benefits). That’s why I’ve been saying, eventually the premium has to go up, like sooner than later,” he said.

“Universal health coverage cannot happen unless we spend money for it. We have to invest in it,” he added.