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PhilHealth staff not considered health workers

By Leonardo Micua


A RECENT decision of the Supreme Court that declared that officers and employees of the Philippine Health Insurance Corporation (PhilHealth) are not public health workers and therefore are not entitled to the privileges granted under the Magna Carta of Public Health Workers was brought to our attention.

The SC decision in GR 222710 promulgated on July 24, 2018, dismissed the petition of PhilHealth against the Commission on Audit (COA) that issued a Notice of Disallowance in the payment of longevity pay to some of its officers and employees.

Below is the timeline of the case so the officers and employees of PhilHealth Region 1 and Pangasinan, may understand how the case was settled by SC.

The decision was penned by Associate Justice Noel Gimenez Tijam and concurred by Senior Associate Justice Antonio Carpio and Associate Justices Presbitero Velasco Jr. and Teresita Leonardo-De Castro.

These officers and employees of PhilHealth may have benefited from the longevity equivalent to five percent for every five year of service in their monthly basic pay commencing after the approval of Section 23 of RA No. 7395, known as The Magna Carta of Public Health Workers.

On February 20, 2000,  then Health Secretary Alberto G. Romualdez issued a Certification declaring PhilHealth officers and employees as public health workers, thus are entitled to longevity pay under the Magna Carta. (This was reinforced by opinion (064), series of 2001, dated April 26, 2001 of  the Office of the Government Corporate Counsel, (OGCC) stating that the term health-related work includes “not only the direct delivery or provision of health services but also the aspect of financing and regulation of health services”).

PhilHealth and employees were deemed engaged in health-related works for purposes of entitlement to the longevity pay.

On August 1, 2011, PhilHealth president and CEO Rey Aquino issued Office Order No. 0053-S-2011, prescribing the guidelines on the grant of longevity pay to officers and employees of his agency, which ordered  the inclusion of the same to the basic salary of qualified PhilHealth workers for the year 2011 and every year thereafter.

The PhilHealth Board on January 31, 2012 passed and approved Resolution NO. 1584, S-2012 that confirmed the grant of longevity pay to its officers and employees for the period January to September 2011 in the amount of PH5,575,294.70.,

However, on post audit of Personal Service Account for year 2011, COA Supervising Auditor Elena Agustin issued Audit Observation Memorandum (AOM) dated April 30, 2012, which found “lack of legal basis for the grant of longevity pay”, thus she recommended the discontinuance of the grant of the same.

COA then issued notice of disallowance of PhilHealth on July 23, 2012 for the payment of  P5,572,294.7 in longevity pay of workers of PhilHealth  from January to September 2011.

PhilHealth President and CEO Banzon asserted, in his appeal said PhilHealth personnel were public health workers, reiterating the February 20, 2000 Certification and OGCC opinion. But Auditor Agustin still found Banzon’s justification unsatisfactory.

CCGS also rejected the ruling that PhilHealth personnel were not public health workers but merely engaged in paying utilization of health services by its covered beneficiaries.

 PhilHealth received the decision on March 25, 2014. On April 30,2024, PhilHealth filed a petition for review before the COA Commission Proper (COA CP).

However, on April 1, 2005, the petition was rejected by COA CP  for being filed “out of time” and  PhilHealth’s motion for reconsideration was likewise denied.

After that, PhilHealth ran to the Supreme Court by filing a petition for Certiorari with prayer for Temporary Restraining Order and Writ of Preliminary Injunction, contending that COA “gravely abused its discretion amounting to lack or excess of jurisdiction in failing to consider PhilHealth’s appeal and dismissing outright the same for being filed out of time.

The SC upheld COA saying it did not commit grave abuse of discretion. It also ruled that PhilHealth failed to appeal within the reglamentary period which is within six (6) months or 180 days.

Moreover, the Court declared that PhilHealth personnel are not public health workers as their functions are not principally related to health services as these functions are drawn from Article IV. Section 16 of Republic Act No. 7875 which specified the powers and functions of their Corporations: which are (1) to administer the National Insurance Program and (2) to formulate and promulgate policies of the sound administration of the Program; that PhilHealth is prohibited from providing health  are directly, from buying and dispensing drugs and pharmaceuticals, from employing physicians and other professionals for purposes of directly rendering care, and from owning or investing in health care facilities.

On the question whether the officers  and employees of PhilHealth should return their unauthorized longevity pay,  the SC said: “With regard to the disallowance of salaries, emoluments, benefits, and allowances of government employees, prevailing jurisprudence provides that recipients or payees need not refund these disallowed amounts when they received these in good faith.”

But then  the Supreme Court added: ” Even though We find that the PhilHealth personnel who received the longevity pay acted in good faith under honest belief that there was legal basis for such payment, the return of the longevity pay in ND No. H.O. 12-005 (11) dated July 23, 2012 is in Order.”

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