PhilHealth flagged over P500 million COVID-19 indemnity fund

MANILA, Philippines — The Commission on Audit (COA) has flagged the Philippine Health Insurance Corp. (PhilHealth) over the improper handling of the COVID-19 National Vaccine Indemnity Fund amounting to P500 million, intended for compensation in case of death, permanent disability or hospital confinement of individuals for any serious adverse effects (SAEs) of COVID vaccines.

The COA said a review of PhilHealth’s financial transactions revealed that the indemnity fund it received from the national government pursuant to the implementation of Republic Act 11525 or the COVID-19 Vaccination Program Act of 2021 was deposited to its account with Land Bank of the Philippines.

The audit body said this contravened Section 10 of RA 11525 which states that the National Vaccine Indemnity Fund shall be treated by PhilHealth as a trust fund which may only be spent for compensation of any person inoculated through the COVID-19 Vaccination Program in case of death, permanent disability or hospital confinement for any SAEs.

The audit body said a review of PhilHealth’s month-end balances revealed that for the majority of months of 2022, deficits ranging from P14.089 million to as high as P498.578 million were noted.

“This suggests that the Fund was being utilized for the regular operations of the Corporation, which is explicitly prohibited by Section 4 of Presidential Decree No. 1445 (Government Auditing Code) and punishable by law,” the COA said.

“Additionally, the continued use of the Fund for operations exposes the intended beneficiaries and patients to the risk of insufficient funds when their claims under the program become due,” it added.

The audit body warned PhilHealth that diversion of government funds for purposes other than their intended use may constitute the crime of Illegal Use of Public Funds or Property also referred to as technical malversation punishable under Article 220 of the Revised Penal Code.

Furthermore, the COA said that of the 9,245 reported SAE cases as of July 25, 2022, only 17 claims for compensation were filed and paid by PhilHealth, amounting to P1.166 million as of yearend.

The COA said the number of uncompensated individuals could be higher as statistics from the Department of Health showed that there were already a total of 179,046,746 doses of COVID-19 vaccine administered across all regions as of March 19, 2023.

“Notably, the 9,245 cases did not include yet unreported cases or similarly serious adverse reactions beyond July 25, 2022; thus, a larger number of cases may be reasonably expected as of 31 March 2023,” the audit body pointed out.

The COA said the underutilization was mainly because of “insufficient awareness among the target beneficiaries and delays in the availability of the Fund.”

“The communication with the public could have been more effective had PhilHealth engaged the active participation of the local government units, where the massive vaccination is conducted, in disseminating the program alongside the administration of the vaccination. Moreover, the limited number of claimants can also be attributed to the delay in the release of the Fund,” COA said.

The COA said the underutilization of the fund “is particularly concerning given that two years have already passed since the commencement of the COVID-19 National Vaccination Program.”