Philippine Health Insurance Corp. v. Herrera

SECOND DIVISION

[G.R. No. 230113. November 10, 2021.]

PHILIPPINE HEALTH INSURANCE CORPORATION, petitioner,vs. DR. RUTH HERRERA, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Second Division, issued a Resolution dated10 November 2021which reads as follows:

"G.R. No. 230113(Philippine Health Insurance Corporation v. Dr. Ruth Herrera). — Before the Court is a Petition for Review on Certiorari1 under Rule 45 assailing the November 14, 2016 Decision 2 and February 9, 2017 Resolution 3 of the Court of Appeals (CA) in CA-G.R. SP No. 144902. The CA set aside Board Resolution No. 2053, s. 2016 4 dated February 24, 2016 (2016 Board Resolution) and reinstated Board Resolution No. 1832, s. 2013 5 (2013 Board Resolution) dated July 25, 2013 of the Philippine Health Insurance Corporation (PhilHealth) which removed the penalty of two-year suspension of accreditation imposed on Dr. Ruth Herrera (Dr. Herrera) by the PhilHealth Arbitration Office in HCP-V-10303 to HCP-V-10306.

The Antecedents

The case stemmed from an investigation conducted by the PhilHealth through Ronald Oropesa (Oropesa) involving questionable transactions conducted by the Sto. Niño Hospital (SNH) in Daet, Camarines Norte. 6

It appears from the PhilHealth forms 7 signed by Dr. Herrera, as the attending physician, that PhilHealth member Orlando T. Echano (Mr. Echano), his wife Delia D. Echano (Mrs. Echano), and their daughters, Jonnahlyn Echano (Jonnahlyn) and Julie Ann Echano (Julie Ann) had all been admitted at the SNH on the following dates: 8

 

Patient	Dates of Confinement
Jonnahlyn D. Echano	April 16 to 18, 2008
Delia D. Echano	April 22 to 24, 2008
Orlando T. Echano	April 27 to 29, 2008
Julie Ann D. Echano	March 30 to April 1, 2008

 

However, in his Affidavit, 9 Mr. Echano denied that his daughter, Julie Ann, was admitted at the SNH from March 30 to April 1, 2008.

Contrary to the statement of her husband, Mrs. Echano admitted that Julie Ann was admitted at the SNH on March 30 to April 1, 2008 in a separate Affidavit 10 dated July 24, 2018. Nevertheless, she denied that she and her other daughter, Jonnahlyn were admitted to the said hospital. 11

On October 27, 2010, the PhilHealth Prosecution Department filed a Complaint 12 against Dr. Herrera charging her of four counts of misrepresentation by false or incorrect information, breach of the warranties of accreditation, and other violations under Sections 152, 153, and 154 of the Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 7875 13 respectively, as amended by RA 9241. 14 These were docketed as HCP-V-10303 to HCP-V-10306.

In response, 15 Dr. Herrera raised the defense of denial. To bolster her case, Dr. Herrera appended the affidavits 16 executed by Mr. and Mrs. Echano on November 22, 2010 wherein Mr. and Mrs. Echano alleged that they were all admitted at the SNH on the indicated dates; and that they were merely threatened by the PhilHealth investigator into signing the original affidavits. 17

Meanwhile, in an earlier case docketed as HCP-V-10-2016, the PhilHealth Arbitration Office rendered a decision finding Dr. Herrera liable for violation of Section 152 of the IRR of RA 7875 and was meted out with the penalties of suspension of accreditation for 12 months and a fine of P10,000.00. 18

Ruling of the PhilHealth Arbitration Office

In the Decision 19 dated August 16, 2012, the PhilHealth Arbitration Office found Dr. Herrera guilty of two counts of misrepresentation by false or incorrect information, to wit:

WHEREFORE, premises considered, respondent Dr. Ruth F. Herrera is hereby adjudged guilty and liable for two (2) counts of the administrative offense of "misrepresentation [by] false or incorrect information" under Section 152, Rule XXIX of the 2004 IRR of Republic Act No. 7875, and is accordingly meted the penalties of suspension of accreditation for two (2) years and a fine of twenty thousand pesos (P20,000.00) for being a second-time offender of the same offense. CAIHTE

FURTHER, the subject two (2) benefit claims of respondent for her professional fees for Delia D. Echano and Jonnahlyn D. Echano should be denied payment by PhilHealth for being fraudulent claims.

SO RESOLVED. 20

The PhilHealth Arbitration Office found that the accusations of fabrication of the original affidavits, i.e., that force was employed against Mr. and Mrs. Echano to make them sign the affidavits, were negated by the presence of material inconsistencies in the original affidavits. 21

The PhilHealth Arbitration Office gave more credence to Mrs. Echano's unequivocal statement in her original affidavit that she and Jonnahlyn were not confined at the SNH. According to the PhilHealth Arbitration Office, the subsequent affidavit of Mrs. Echano partakes of an affidavit of recantation or retraction which is highly frowned upon and disfavored in evidence for being easily secured and being contrary to human experience. 22

The PhilHealth Arbitration Office however ruled that the benefit claims of Mr. Echano and Julie Ann must necessarily fail because of Mrs. Echano's declaration that Julie Ann was admitted at the SNH on March 30 to April 1, 2008 as well as Mr. Echano's confirmation that he was confined at the SNH sometime in April 2008. 23

Lastly, the other two offenses, i.e., Breach of Warranties of Accreditation and Other Violations, were deemed absorbed by the offense of misrepresentation by false or incorrect information. 24

Dr. Herrera appealed the Decision 25 of the PhilHealth Arbitration Office to the PhilHealth Board of Directors (BOD).

Ruling of the PhilHealth BOD

In their 2013 Board Resolution, 26 the PhilHealth BOD modified the Decision of the PhilHealth Arbitration Office. 27 Applying the Revised Internal Rules of the PhilHealth Board on Appealed Administrative Cases (RIRAAC) which took effect on June 8, 2012, the PhilHealth BOD deleted the penalty of suspension of accreditation imposed against Dr. Herrera by reasoning that the amount involved in the case is only P600.00. Thus:

WHEREFORE, the Arbiter's Decision dated 16 August 2012 is hereby MODIFIED by REMOVING the penalty of two (2) years suspension of accreditation but INCREASING the fine from Twenty Thousand Pesos (P20,000.00) to Thirty Thousand Pesos (P30,000.00).

Appellant is also directed to refund to PhilHealth the amount of Six Hundred Pesos (P600.00) which was paid to her by PhilHealth. Otherwise, the same shall be deducted from the future claims of Appellant.

The Arbitration Office of the Corporation is hereby directed to submit a report to this Board as regards the implementation of this resolution within thirty (30) days from receipt hereof.

This Resolution shall be immediately executory.

SO RESOLVED. 28

Unfazed, Dr. Herrera filed a Motion for Reconsideration of the 2013 Board Resolution. 29 She argued that the 2013 Board Resolution is void, having been issued beyond 60 days as provided in Section 131, Rule XXIV of the RIRAAC, citing Article 5 of the Civil Code. She emphasized that the PhilHealth BOD approximately took 10 months to render the Resolution and another nine months for her to receive a copy of the PhilHealth BOD's "flawed decision." 30 She further asserted that she was denied due process because the prosecutor did not give her the opportunity to file her Answer within five calendar days before the complaint was filed with the Arbitration Office. 31 She furthermore averred that the allegations of Mr. and Mrs. Echano that they were threatened to sign the original affidavits by a PhilHealth investigator were not given weight and due consideration in the same way that she was not able to confront that PhilHealth investigator through a direct examination. 32 Lastly, she denied that this is her second offense and explained that the complaints related to the case have not yet attained finality. 33 DETACa

Declaring that Dr. Herrera merely reiterated the arguments in her Memorandum of Appeal, the PhilHealth BOD, in the 2016 Board Resolution, 34 held that they found no cogent reason to modify or reverse their earlier Resolution. 35 The PhilHealth BOD ruled that Dr. Herrera was not denied due process because she was able to file her Answer and Position Paper which were both duly considered by the Arbitration Office. Nonetheless, the PhilHealth BOD increased the penalty imposed in the 2013 Board Resolution, to wit:

WHEREFORE, premises considered, the Motion for Reconsideration of Dr. Ruth F. Herrera is hereby DENIED for lack of merit. The decision in PhilHealth Board Resolution No. 1832, s. 2013 [is] hereby MODIFIED. The penalty of Twelve (12) months suspension of accreditation and a fine of Thirty Thousand Pesos (P30,000.00) is hereby imposed.

FURTHER, restitution for any payment made by PhilHealth for the claim/s subject of this case shall be made by the Appellant or changed and deducted from the proceeds of any pending or future claims of Appellant with PhilHealth. The fine imposed may likewise be charged to the future claims of the Appellant.

FINALLY, the Appellant is STERNLY WARNED that a repetition of the same or similar act in the future shall be dealt with more severely.

SO ORDERED. 36 (Emphasis supplied.)

Aggrieved, Dr. Herrera filed a Petition for Review under Rule 43 of the Rules of Court with the CA. 37

Ruling of the CA

In the November 14, 2016 Decision, 38 the CA affirmed the factual findings of the PhilHealth Arbitration Office that Dr. Herrera filed benefit claims for the services that she rendered to the four members of the Echano family. It further affirmed the PhilHealth BOD's ruling that: (1) Dr. Herrera was not deprived of due process of law; 39 (2) the affidavits of recantation executed by Mr. and Mrs. Echano cannot supersede their original affidavits; 40 and (3) the decision of the PhilHealth BOD in their 2013 Board Resolution removing the penalty of two-year suspension of accreditation imposed by the PhilHealth Arbitration Office should persist in accordance with the 2012 RIRAAC. 41 Thus:

WHEREFORE, premises considered, the instant petition is partly GRANTED. Accordingly, the February 24, 2016 Order of respondent Philippine Health Insurance Corporation, in PHIC Case No. HCP-V-10-303 to 306, n is hereby REVERSED and SET ASIDE. Consequently, the July 25, 2013 Decision which modified the August 16, 2012 Decision of the Arbitration Office by removing the penalty of two-year suspension of accreditation and increasing the fine from Twenty Thousand Pesos (P20,000.00) to Thirty Thousand Pesos (P30,000.00) is now REINSTATED. All other aspects of the July 25, 2013 Decision STAND.

SO ORDERED. 42

On February 9, 2017, the CA issued a Resolution 43 denying PhilHealth's Motion for Reconsideration.

Thus, PhilHealth now comes to the Court via a Petition for Review on Certiorari filed under Rule 45 seeking to set aside the November 14, 2016 Decision 44 and February 9, 2017 Resolution 45 of the CA.

Issue

The issue before the Court is whether the CA committed reversible error in setting aside the 2016 PhilHealth Board Resolution and reinstating the 2013 PhilHealth Board Resolution.

Our Ruling

The petition is meritorious.

At the outset, PhilHealth is vested with quasi-judicial powers pursuant to Section 17 of RA 7875, "to conduct investigations for the determination of a question, controversy, complaint, or unresolved grievance brought to its attention, and render decisions, orders, orresolutions thereon." Consequently, PhilHealth is authorized to impose or suspend the accreditation of erring health care providers in addition to the imposition of fine under Section 44 of RA 7875 to wit:

SEC. 44. Penal Provisions. — Any violation of the provisions of this Act, after due notice and hearing, shall suffer the following penalties:

A fine of not less than Ten thousand pesos (P10,000) nor more than Fifty thousand pesos (P50,000) in case the violation is committed by the hospital management or provider. In addition, its accreditation shall be suspended or revoked from three months to the whole term of the accreditation: Provided, however, That recidivists may not anymore be accredited as a participant of the Program;

xxx xxx xxx.

Section 4 (b), Rule IV of the RIRAAC, as approved by the PhilHealth BOD, provides that the administrative penalty which may be imposed in Dr. Herrera's case is six (6) months, one (1) day to twelve (12) months and/or a fine of P20,000.00 to P30,000.00, to wit:

SECTION 4.  Administrative Penalties. — The following administrative penalties shall be imposed on appealed cases involving the following kinds of offenses:

xxx xxx xxx.

(b) Fraudulent offenses:

 

Second offense

1) If the fraudulent claim has not been paid or if the amount involved is less than P3,000: Suspension of 6 months, 1 day to 12 months and/or Fine of P20,001.00 to P30,000.00.

 

xxx xxx xxx. (Emphasis supplied.)

Notably, the foregoing provision of the RIRAAC which added the "and/or" provision in the imposition of penalties is contrary to Section 44 of RA 7875, the governing law at the time the fraudulent offense was committed by Dr. Herrera. In other words, the RIRAAC allowed the imposition of either suspension or a fine in cases involving fraudulent claims were made, contrary to Section 44 of RA 7875 which imposes the penalty of suspension in addition to the payment of fine.

It is well settled that "[i]n cases of conflict between the law and the rules and regulations implementing the same, the law must always prevail." 46 Administrative rules draw life from the statute which they seek to implement because it is obvious that the spring cannot rise higher than its source. 47 Hence, the PhilHealth BOD cannot go beyond the provisions of RA 7875 and impose a fine without suspending the accreditation of the erring health care provider when it is clear from Section 44 of RA 7875, the law they seek to implement, that violations under the said law shall merit suspension of accreditation in addition to the payment of a fine.

From the foregoing, it is thus clear that the CA erred when it held that the PhilHealth BOD had the discretion to remove the two-year suspension imposed by the PhilHealth Arbitration Office. aDSIHc

The Court takes judicial notice that while this case was pending, RA 10606, otherwise known as the National Health Insurance Act of 2013, was signed into law on June 19, 2013. Under RA 10606, Section 44 of RA 7875 was amended as follows:

SEC. 44. Penal Provisions. — Any violation of the provisions of this Act, after due notice and hearing, shall suffer the following penalties:

(a) Violation by an Accredited Health Care Provider — Any accredited health care provider who commits a violation, abuse, unethical practice or fraudulent act which tends to undermine or defeat the objectives of the Program shall be punished with a tends to not less than Fifty thousand pesos (P50,000.00) but not more than One hundred thousand pesos (P100,000.00) or suspension of accreditation from three (3) months to the whole term of accreditation, or both, at the discretion of the Corporation: Provided, That recidivists may no longer be accredited as a participant of the Program; (Emphasis supplied.)

Simply put, under the new law, the imposition of penalties against an erring accredited health care provider which could either be for payment of a fine, or suspension of accreditation, or both, is now subject to the discretion of PhilHealth. This amendment, however, will not apply in the case in view of Article 4 of the Civil Code which states that "[l]aws shall have no retroactive effect, unless the contrary is provided." RA 10606 did not provide for the retroactive application of any of its provisions. Significantly, the Quasi-Judicial Provisions of the Revised Implementing Rules of RA 10606 issued on December 5, 2016 provides as follows:

SECTION 188. Application of Rules. — Complaints filed with and under deliberation by appropriate bodies/Committees of the Corporation prior to the effectivity of this Rules shall be governed in accordance with the applicable rules. (Emphasis supplied)

Veritably, the above implementing rules recognize the doctrine of prospectivity of laws as embodied in Article 4 of the New Civil Code.

Equally significant, it is settled in jurisprudence that administrative decisions on matters within the jurisdiction of administrative agencies are entitled with respect, if based on substantial evidence, and can only be set aside on proof of grave abuse of discretion, fraud, or error of law. 48 In the case, the CA affirmed the factual findings and legal conclusions of both the PhilHealth Arbitration Office and the PhilHealth BOD on all points and none of the mentioned defects are present to warrant a reversal. Thus, the CA erred when it substituted its own judgment for that of the PhilHealth BOD as to the imposition of the proper penalty.

WHEREFORE, the instant petition is hereby GRANTED. The Decision dated November 14, 2016 and the Resolution dated February 9, 2017 of the Court of Appeals in CA-G.R. SP No. 144902 are MODIFIED in that Dr. Ruth F. Herrera is imposed the penalty of twelve (12) months suspension of accreditation as a health care provider and a fine of Thirty Thousand Pesos (P30,000.00).

SO ORDERED." (Caguioa, J., designated as Additional Member vice Dimaampao, J., per Raffle dated October 27, 2021.)

By authority of the Court:

TERESITA AQUINO TUAZONDivision Clerk of Court

By:

(SGD.) MA. CONSOLACION GAMINDE-CRUZADADeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 10-24.

2.Id. at 26-35; penned by Associate Justice Franchito N. Diamante with Associate Justices Japar B. Dimaampao (Now a Member of the Court) and Carmelita Salandanan Manahan, concurring.

3.Id. at 37-38.

4. CA rollo, pp. 7-11.

5.Id. at 102-107.

6.Id. at 80 and 89.

7.Id. at 49-55.

8.Id. at 8.

9.Id. at 62.

10.Id. at 61.

11.Rollo, p. 13.

12. CA rollo, pp. 46-48.

13. An Act Instituting a National Health Insurance Program for All Filipinos and Establishing the Philippine Health Insurance Corporation for the Purpose otherwise known as the National Health Insurance Act of 1995, Republic Act No. 7875, approved on February 14, 1995.

14. An Act Amending Republic Act No. 7875, Otherwise Known as "An Act Instituting a National Health Insurance Program for All Filipinos and Establishing the Philippine Health Insurance Corporation for the Purpose," approved on February 10, 2004.

15. CA rollo, pp. 63-71.

16.Id. at 85-86.

17.Id. at 89.

18.Rollo, p. 67.

19. CA rollo, pp. 88-91; penned by Senior Arbiter Atty. Grace B. Failadona.

20.Id. at 90-91.

21.Id. at 90.

22.Id.

23.Id.

24.Id.

25.Id. at 88-91.

26.Id. at 102-107.

27. CA rollo, pp. 103-104.

28.Id. at 105.

29.Id. at 108 to 113.

30.Id. at 109.

31.Id. at 111.

32.Id. at 111-112.

33.Id. at 112.

34.Id. at 7-11

35.Id. at 9.

36.Id. at 10.

37.Id. at 15-27.

38.Rollo, pp. 26-35.

39.Id. at 32.

40.Id. at 33.

41.Id. at 33-34.

42.Id. at 34.

43.Rollo, pp. 37-38.

44.Id. at 26-35.

45.Id. at 37-38.

46.Commissioner of Internal Revenue v. Bicolandia Drug, 528 Phil. 613 (2006).

47.Miners Association of the Phils., Inc. v. Factoran, Jr., 310 Phil. 129 (1995).

48.Bernardo v. Court of Appeals, 473 Phil. 300 (2004).

n Note from the Publisher: Copied verbatim from the official document.