PMDC need not pay interest on unpaid premiums, OGCC says; ARTA welcomes clarificationn

1 September 2021 – Secretary Jeremiah Belgica, Director General of the Anti-Red Tape Authority (ARTA), thanked the Office of Government Corporate Counsel (OGCC) after it clarified that members of the Philippine Mining Development Corporation (PMDC) do not need to pay interest on unpaid premiums by the Government Service Insurance System (GSIS).

OGCC Government Corporate Counsel Elpidio J. Vega made the clarification as PMDC is asking GSIS to cover its members.

This, after coordinations made by ARTA with the PMDC, GSIS, OGCC, and the Governance Commission for GOCCs (GCG).

“This is a high impact ARTA initiative that will benefit, not only PMDC, but all the rest of the GOCCs similarly situated. You can just imagine, there is no need for them anymore to pay back interest on the premiums. That is a huge relief,” the ARTA chief said.

In a letter addressed to Vega dated 17 August 2021, Belgica said PMDC has been asking GSIS to cover its members after OGCC issued Opinion No. 153, Series of 2021, categorically stating that PMDC members are covered by GSIS from its creation in 2003. Initially, PMDC was under the Social Security System (SSS).

During a meeting that ARTA held with PMDC, GSIS, and GCG on 6 August 2021, the question on whether GSIS can waive PMDC’s monthly 2-percent interest on unpaid premiums came up.

Although Section 7 of Republic Act No. 8291 or the Government Service Insurance System Act of 1977 as amended by Presidential Decree No. 1146 and its Implementing Rules and Regulations (IRR) state that agencies which delay the remittance of any and all monies due the GSIS shall be charged interests no less than two percent per month, the PMDC and its members cannot be made liable for the payment of interest on unpaid premiums because they originally did not expect to be subject to the coverage of the GSIS, said Vega in his reply to Belgica’s letter on 24 August 2021.

PMDC said that since its creation, its employees have been contributing to SSS because that was what GSIS rules provided for government-owned and controlled corporations (GOCCs) registered with the Securities and Exchange Commission (SEC).

The said agency began requesting for GSIS coverage for its employees on July 2019. However, because of an erroneous provision in the IRR of R.A. 8291, GOCCs with no original Charter, or those registered with the SEC, such as PMDC, were excluded from those that can be covered by GSIS.

Specifically, while Section 2c and d and Section 3 of R.A. 8291 provides that all GOCCs with or without Charter are covered by GSIS, Rule 1 Section 1.24 and Rule 2 Section 2.4.1 of its IRR states that only GOCCs with original Charter are within the coverage of GSIS.

“Clearly, PMDC and its employees acted in good faith when it complied with the provisions of the Social Security Act and without any intention to violate the provision of the GSIS law. It is a basic rule that mistake upon a doubtful or difficult question of law may be the basis of good faith,” Vega’s letter read.

Vega cited GSIS Memorandum Circular 25, Series of 2021 or the 2020 Guidelines on the Settlement of Unremitted Premium Contribution by Agencies through Memorandum of Agreement with GSIS and Administration of MOA Accounts, wherein those who may be exempted from the penalty for delayed remittance of premium contributions were enumerated.

Among these is if the agency made payments in good faith due to a different interpretation of an enabling law, resulting in underpayment of premium contributions; and other future analogous instances, subject to the approval of the Board, which the Government Corporate Counsel said can both be applied to PMDC.

Vega also said that it was within the powers and functions of the GSIS Board of Trustees to compromise or release any claim or settle liability of the agencies regardless of the amount involved, under such terms and conditions as it may impose for the best interest of the GSIS, as stated in its Charter.

“The interest, if it will be subjected to release or compromise, is expressly within the authority of GSIS to release or compromise and is not one of those matters proscribed by law to be compromised,” he said.


ARTA Sec. Belgica bares agency’s initial findings on PhilHealth’s unpaid hospital claims

26 August 2021 – Secretary Jeremiah Belgica, Director General of the Anti-Red Tape Authority (ARTA), identified at least three causes of delay in the Philippine Health Insurance Corporation’s (PhilHealth) processing of payments of hospital claims.

These are the agency’s issues with its Information and Communications Technology (ICT), wrong diagnoses and faulty documentation in its Return-to-Hospital applications, and Medical Prepayment Review (MPR).

ARTA also found that PhilHealth is struggling with its lack of manpower amid the COVID-19 pandemic, which is a common problem among government agencies.

Belgica cited the Authority’s said initial findings during Thursday’s hearing of the House Committee on Good Government and Accountability regarding the status of PhilHealth’s unpaid hospital claims, where he was invited to serve as a resource speaker.

The initial findings were sourced from ARTA’s series of meetings with PhilHealth and concerned public and private hospitals.

“We do support PhilHealth in its streamlining efforts,” Belgica said during the hearing. “We will be committing in helping them.”

PhilHealth has come under fire for the delays in its payment of COVID-19 reimbursement claims from both public and private hospitals.

In a previous meeting with ARTA, PhilHealth officials pointed out their problematic internet connection and lack of cloud storage that hampers their operations.

Belgica connected the said PhilHealth officials to the Department of Information and Communications Technology (DICT) that pledged to assist them with their storage concerns. However, PhilHealth will have to resolve its internet speed issues on its own since they will be coordinating with their internet service provider.

Data from PhilHealth showed that of the number of applications with them, 76.35 percent have been paid, 11.88 percent are being processed, and 3.47 percent have been denied.

Only 8.30 percent are RTH applications. Of this figure, approximately .64 percent are because of wrong diagnoses.

ARTA recommended PhilHealth to conduct a streamlined pre-assessment or pre-payment review of documentary materials, post-evaluation audit, and automation to improve their services.

“For pre-payment assessment, they can do risk-based assessment. Sino unang babayaran? Baka may maliliit na health institutions na magsasara kung hindi binayaran. Or they can apply credit standing-based. Historically, sino ang maganda ang submission, hindi nagfe-fail sa diagnosis? Makikita natin sino ang luluwagan at ire-red flag. These are some of the things that they can do,” Belgica said.

Another issue that was taken up during the hearing was PhilHealth’s 60-day period to liquidate its cash advances to the Commission on Audit (COA) after distribution to regional hospitals and offices.

Marikina 2nd District Representative Stella Quimbo cited the 3-7-20 rule in the Republic Act No. 11032 or the Ease of Doing Businesses and Efficient Government Service Delivery Act of 2018, wherein simple government transactions must be finished in three days, complex transactions in seven days, and highly technical transactions in 20 days.

However, Belgica said this is “water under the bridge” because the process requires even more than 60 days to finish.

He recommended the creation of a legislation regarding the 60-day period to liquidate cash advances to COA for PhilHealth to follow. Belgica said government transactions that do not indicate the period needed to finish them are illegal.

In the meantime, ARTA will summon all regional offices of PhilHealth to ensure the speedy payment of hospital claims following the directive of President Rodrigo Duterte.

“Since the special law of the PhilHealth prescribes a specific period of 60 days for processing claims then it is the applicable period instead of the 3, 7, 20 days processing time stated in more general ARTA law,” Belgica said in a separate statement.

The ARTA chief, however, said that if the state insurer’s regional offices fail to act within the 60-day period, then the Authority will be compelled to implement its enforcement function as mandated by R.A. 11032.

“If the 60 days is not followed, they may be held accountable by ARTA,” he warned.


ARTA-CIDG nabs student permit fixer outside LTO Tayuman

26 August 2021 – A student permit fixer was arrested outside the Land Transportation Office in Tayuman, Manila in an entrapment operation on Thursday morning.

Authorities identified the suspect as alias “Tapong.”

Investigation showed that an agent from the Anti-Red Tape Authority (ARTA) was deployed to survey the area after the office received information on alleged fixing activities there on 26 July 2021.

“Tapong” approached the agent on 30 July 2021 and offered to fast track the processing of their application for student permit in exchange for P4,500. Normally, a student permit only costs P317.63.

The plan to launch an entrapment operation against the suspect was postponed following the implementation of the enhanced community quarantine (ECQ) in Metro Manila from 6 to 20 August.

The agent agreed to meet with the fixer outside the LTO Tayuman on Thursday morning.

“Tapong” was eventually arrested by elements of ARTA and the Criminal Investigation and Detection Group (CIDG) at around 9:27 a.m. after receiving the marked money.

The suspect is now under custody of the CIDG and will be facing charges for violation of Republic Act No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.

ARTA has been intensifying its crackdown on fixers lurking around government offices in the past few months.

Earlier, the Department of Transportation signified its support for the Authority’s anti-fixer campaign and assured that the LTO and Land Transportation Franchising and Regulatory Board (LTFRB) will also participate in the campaign.