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PhilHealth Owes The Philippine Red Cross Almost P1 Billion. Now The Public Will Face the Consequences

All PhilHealth-funded tests will no longer be entertained by the Philippine Red Cross.
IMAGE Philippine Red Cross
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Coming on the heels of Philhealth corruption allegations, the Philippine Red Cross (PRC) has announced its plans to cease all COVID-19 tests being charged to PhilHealth, as of October 15. According to a lengthy public statement from the organization, PhilHealth owes PRC a whopping P930,993,000 in unpaid tests and overdue bills.

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The total bill sent to PhilHealth from PRC amounted to over P1 billion, but only a fraction has been paid for PRC's services. As a result of PhilHealth’s failure to pay its debt, Red Cross has been forced to suspend PhilHealth-funded COVID-19 testing as it cannot function without the resources required to keep it afloat, putting millions at risk.

Why did PRC stop PhilHealth-funded tests?

To understand just how much PRC contributes to the country’s testing effort, the organization has handled over one million COVID-19 tests, which is about 26 percent of the national test output. PRC has been ordering the test kits from abroad (which are $6 million per order), operating 21 laboratories around the country, processing a totally of 42,000 tests per day, and paying over 300 Red Cross staff that includes medical technologists, swabbers, encoders, and pathologists. This is excluding all the PPEs, meals, accommodation, and transportation that Red Cross is shouldering as it works around the clock at the forefront of the COVID-19 battle.

“This difficult decision for a humanitarian organization such as the PRC to make but it has to be made. The PRC does not have unlimited resources to replenish the testing kits for its laboratories unless PhilHealth, its major creditor, settles its lawful obligations to the PRC,” said the organization.

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The organization went on to explain that aside from the unpaid balance of P930 million, PhilHealth has never replenished the revolving fund of P100 million.

“In fact, it is now PRC advancing its funds for testing services as a result of the non-payment of PhilHealth,” said PRC. “If its (PRC) finances are in any way compromised, thousands of lives will be affected when major disasters hit our people. This should not be the case.”

What does this mean for the public?

Based on the numbers, PRC accounts for one in four Filipinos seeking tests. But this could drastically lower as it stopped accepting PhilHealth-funded tests. This means if you’re one of the following who rely on PhilHealth, you will have to shoulder the steep costs of COVID-19 tests on your own:

1| Overseas Filipino workers
2| Those arriving in airports and seaports
3| Individuals through the mega swabbing facilities and through the local government units
4| Frontline health and government workers
5| Others included in the expanded testing guidelines of the Department of Health Per Memo No. 2020-0258_A

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But, PRC will continue testing for these groups who have settled their payments:

1| Individuals who booked their testing through the 1158 Helpline of the PRC or online at book.redcross1158.com
2| Private companies and organizations
3| Local government units and government agencies with laboratory testing agreements with the PRC and whose payments are up to date

So, unless you have a private company or LGU behind you, you will have to shoulder the costs of the COVID-19 test on your own. And it’s not cheap. The testing fee with Red Cross is currently P3,500, and that’s affordable compared to those at private hospitals that charge almost P8,000 per test.

Some will not be able to afford a test at all, which could risk their health, the health of those around them, and possibly their livelihood. 

What is being done to resume testing?

Defending that “one simply cannot turn a blind eye” to the situation, Red Cross explained that after many requests and follow ups, “not a single centavo has been paid since [September 8, 2020].”

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Senator Richard J. Gordon, PRC Chairman, and Atty. Dante A. Gierran, the new President and CEO of PhilHealth, met on September 25 to discuss the situation, along with DOH Secretary and PhilHealth Chairman Francisco T. Duque III and Secretary Vivencio Dizon, with Gierran affirming Philhealth's intention to pay the unpaid settlement.

However, the PRC noted that in a letter sent to them dated October 6 requesting to lower the price of the tests from P3,500 to P3,409 did not “mention any forthcoming payment.”

What does PhilHealth have to say?

The government insurance agency has released a brief statement on the matter:

“PhilHealth recognizes the Philippine Red Cross as an important partner in the Government’s drive to curb Covid-19 through intensive targeted testing.

“It is in close coordination with the PRC to thresh out issues pertaining to the said partnership so the PRC can immediately resume accommodating RT-PCR tests for priority sectors that will be paid for by PhilHealth.

“As of September 2020, PhilHealth already paid the PRC a total of P1.6 billion for at least 433,263 tests.

“In the meantime, it is requesting that specimens from affected sectors be submitted to other accredited testing laboratories to be able to avail of PhilHealth benefits. Please see complete list here.”

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PhilHealth corruption allegations have been all over the headlines after news hit that its top executives stole P15 billion from funds in 2019 alone. In August, Presidential Anti-Corruption Commission (PACC) official Greco Belgica accused PhilHealth of losing over P153 billion since 2013 due to massive corruption in the agency.  

Just a few weeks after these accusations surfaced, the former head of PhilHealth, Ricardo Morales, resigned due to health reasons. He was replaced by Gierran, a former director of the National Bureau of Investigation, one month ago.

Public trust in the government insurance corporation is already low due to the corruption allegations.

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What happens now?

While the leader of PhilHealth has said that they intend to pay the large bill, words are not the same as actions, especially as PhilHealth corruption allegations continue to be at the top of everyone's mind. So for now, anyone relying on PhilHealth will have to wait indefinitely until the Red Cross changes its policy. 

It goes without saying: It’s a tough price for the public to pay.

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Anri Ichimura
Section Editor, Esquire Philippines
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