G.R. No. 181174 - Braza vs. City Civil Registrar of Himamaylan City

Urdaneta Sacred Heart Hospital (USHH) is an accredited health care institution under the Philippine Health Insurance Corporation (Philhealth or PHIC).
USHH provided treatments and procedures to Philhealth members, filing 374 reimbursement claims from December 2008 to April 2010 for cataract surgeries.
Out of 374 claims, Philhealth reimbursed 199, denied 15, and left 160 unacted upon.

PHIC Board, through a July 30, 2009 Resolution, refused to act on some claims and denied 60 claims on the basis that treatments were conducted during medical missions (December 2008-March 2009), contrary to PHIC Circulars Nos. 17 and 19, series of 2007, which prohibit payment for claims during medical missions or recruitment schemes.
USHH was informed of claim rejections three months after the denial and wrote to PHIC on October 15, 2009, pointing out that PHIC’s own Fact-Finding Verification Report of March 25, 2009 did not identify these claims as part of medical missions, urging PHIC to process them.
Philhealth paid some of the claims during the court proceedings, with outstanding claims reduced to P1,475,988.42 at the trial’s end.

USHH filed a Complaint in the Regional Trial Court (RTC) of Pasig for failure of Philhealth to act or pay for the unprocessed claims within the required 60 calendar days under PHIC rules.
RTC noted that USHH did not comply with procedural rules requiring exhaustion of administrative remedies through the PHIC Regional Office (RO), Motion for Reconsideration (MR), and Protest and Appeals Review Department (PARD). Nonetheless, RTC took cognizance due to strong public interest.
RTC ordered PHIC to pay USHH the outstanding amount plus interest, attorney’s fees, and appearance fees.
PHIC appealed the RTC Decision to the Court of Appeals (CA).

CA affirmed the RTC Decision, holding that USHH should generally follow PHIC rules for claims and appeals, but an exception to exhaustion of administrative remedies applied due to strong public interest.
CA held that USHH’s claims for surgeries from December 2008 to March 2009 were not performed during medical missions per PHIC’s Fact-Finding Verification Report.
PHIC’s motion for reconsideration before the CA was denied.

PHIC filed a Petition for Review on Certiorari contesting the CA rulings, raising several issues including jurisdiction, exhaustion of administrative remedies, finality of PHIC Board decisions, violation of NHI laws, and failure of RTC to clearly state facts and law.
PHIC argued that USHH claims were administrative matters under exclusive PHIC jurisdiction requiring prior exhaustion of remedies, that many claims were still undecided and under investigation, and that USHH violated laws by participating in or benefiting from medical missions or recruitment schemes, contravening Circular Nos. 17 and 19.
PHIC emphasized that claims under the NHI Program are statutory privileges, not absolute rights, and that PHIC regularly performs its functions with presumption of regularity.
PHIC further argued several of USHH’s claims were invalid as they were part of medical missions or recruitment schemes and that PHIC properly denied and investigated such claims.
USHH, on the other hand, contended it properly filed claims and was forced to bring the case to RTC after denial by the PHIC Board, which USHH claimed is without exclusive jurisdiction over the matter, and maintained the doctrine of exhaustion of administrative remedies did not apply due to public interest and prior denial without due process.

Whether the RTC has jurisdiction over the complaint filed by USHH.
Whether the complaint should be dismissed for lack of cause of action on grounds that:

USHH failed to exhaust existing administrative remedies.
The case does not qualify for an exception to the doctrine on exhaustion of administrative remedies.
USHH’s claim for reimbursement under the NHIP is a statutory privilege and not an established right.

Whether PHIC’s decision on USHH’s non-compensable claims is final and executory.
Whether USHH violated NHIP laws, rules and regulations making it not entitled to reimbursement.
Whether the RTC failed to comply with Rule 36, Section 1 of the Rules of Court by failing to distinctly state the facts and law in the decision.
Whether USHH failed to overcome the presumption that PHIC regularly performed its duties and functions.