G.R. No. 193158 - Philippine Health Insurance Corp. vs. Our Lady of Lourdes Hospital

Case Summary (G.R. No. 193158)

Petitioner’s claim and legal basis

PHIC filed an administrative complaint (HCP‑NCR‑09‑082) against OLLH for the administrative offense of filing multiple claims, a violation penalized under Section 145, Rule XXVIII of the Implementing Rules and Regulations (IRR) of R.A. No. 7875.

Procedural background in the Arbitration Department

PHIC served summons on OLLH. OLLH filed a Verified Answer on June 23, 2009. The Arbiter directed submission of Position Papers. PHIC submitted its Position Paper; OLLH moved to defer its Position Paper pending resolution of written interrogatories directed to PHIC’s President and CEO and a motion for production/inspection/copying of the original transmittal letter and other claims accompanying Annex B of the Complaint.

OLLH’s stated reasons for discovery

OLLH alleged denial of access to documents and prevention of its representatives from talking to PHIC personnel about the charged claim; it sought interrogatories and production/inspection of documents to intelligently prepare its defense and to obtain material and relevant information.

Arbitration Department’s denial (August 11, 2009 Resolution; September 4, 2009 Order)

Arbiter De Leon denied OLLH’s motions on the ground that the administrative proceedings before PHIC are summary in nature and governed by its IRR, which prioritize immediate resolution. The Arbiter characterized OLLH’s discovery motions as potentially dilatory and self‑serving and emphasized the Arbiter’s original and exclusive jurisdiction (Section 96, 2004 IRR) and discretion to resolve cases after submission of position papers or to hold hearings when necessary (Section 112, 2004 IRR).

Rationale given by the Arbitration Department

The Arbiter observed that discovery procedures are not mandatory in administrative proceedings and stressed the Corporation’s power to prescribe rules for its adjudication (citing Angara v. Electoral Commission). The Arbiter also noted that the interrogatories were addressed to the PHIC President and CEO, who was not the most competent official to answer operational questions about claim processing, and suggested that any necessary clarifications could be obtained at a hearing after submission of position papers.

Court of Appeals decision

The CA reversed the Arbiter, holding that PHIC gravely abused its discretion by denying OLLH’s resort to modes of discovery. The CA found that OLLH demonstrated good cause: it could not intelligently prepare its position paper without access to pertinent documents and PHIC personnel; the interrogatories sought non‑privileged, relevant information about PHIC’s claim processing procedures; and the requested production of the transmittal letter and accompanying claims was material to PHIC’s charge of multiple claims.

PHIC’s arguments before the Supreme Court

PHIC argued that the Arbiter complied with the IRR (Sections 109, 111, 112) which recognize only an Answer and Position Paper as pleadings before the Arbiter, and that discovery is neither a right under the PHIC Charter nor the IRR. PHIC maintained that the Arbiter’s exercise of discretion to deny discovery was consistent with the summary nature and expeditious objectives of administrative adjudication and relied on precedents recognizing the Arbiter’s discretion. PHIC further contended OLLH’s motives were dilatory and that the information sought was already in OLLH’s possession or publicly accessible and immaterial to its defense.

Certification against forum shopping issue and Court’s resolution

OLLH contended that PHIC’s petition should be dismissed for defective certification against forum shopping because the verification was signed by Alex B. Canaveral purportedly without proper authorization. The SC found substantial compliance: PHIC subsequently submitted Board Resolutions (Nos. 694 and 1105) indicating authority to sign verifications and represent the Corporation in legal proceedings, and Canaveral, by virtue of his office, could verify the petition’s allegations. The SC relied on prior jurisprudence permitting substantial compliance in such circumstances.

Governing legal principles on discovery in administrative proceedings

The SC reiterated that written interrogatories and production/inspection of documents are discovery tools intended to elicit non‑privileged facts material and relevant to the pending action and to clarify issues and ascertain facts. However, discovery is subject to limitations: documents and questions must be shown to be material and relevant; discovery procedures are not mandatory in administrative proceedings; and the administrative tribunal may adopt rules and exercise discretion tailored to the summary and expeditious nature of the proceedings.

Application of principles to the facts (Supreme Court analysis)

The SC held that many of OLLH’s interrogatories sought information apparent from the Complaint and Verified Answer or concerned entries in validation reports that were immaterial to the core issue (whether OLLH filed multiple claims or whether the second PhilHealth Claim Form 2 was inadvertently attached). The SC deemed the interrogatories frivolous or self‑explanatory, and therefore not requiring answer. The Court emphasized that the interrogatories were misdirected to the PHIC President and CEO, who was not the competent official to address operational claim processing questions. The SC also found OLLH’s assertion of denial of access to documents and inability to consult PHIC personnel unsubstantiated by evidence.

Availability of alternative procedures and powers of the Arbiter

The SC noted that the Ar

Case Syllabus (G.R. No. 193158)

Case Title, Citation, and Court

Supreme Court of the Philippines, Third Division decision rendered November 11, 2015; reported at 773 Phil. 28; G.R. No. 193158.
Decision authored by Justice Peralta. Concurring: Chief Justice Velasco, Jr. (Chairperson), and Justices Villarama, Jr., Reyes, and Jardeleza.
Procedural context: Petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse a July 27, 2010 Court of Appeals decision (CA-G.R. SP No. 110444).

Parties and Nature of the Case

Petitioner: Philippine Health Insurance Corporation (PHIC), a government corporation created under Republic Act No. 7875 (as amended by R.A. No. 9241 and R.A. No. 10606), charged with administering and implementing the National Health Insurance Program.
Respondent: Our Lady of Lourdes Hospital (OLLH), an institutional health care provider accredited with PHIC.
Primary subject: Whether the PHIC Arbitration Department committed grave abuse of discretion by denying OLLH’s resort to modes of discovery (written interrogatories and production/inspection of documents) in an administrative complaint for filing multiple claims.

Factual Background

May 14, 2009: PHIC filed an administrative Complaint (docketed HCP-NCR-09-082) through its Legal Sector — Prosecution Department against OLLH for the administrative offense of filing multiple claims, penalized under Section 145, Rule XXVIII of the Implementing Rules and Regulations (IRR) of R.A. No. 7875.
Allegation: OLLH allegedly filed two claims of the same amount involving the same patient, same diagnosis, and for the same confinement period.
Case assigned to Senior Arbiter Atty. Darwin G. De Leon; summons duly served on OLLH.
June 23, 2009: OLLH filed a Verified Answer.
Parties were directed to file respective Position Papers. PHIC filed its Position Paper; OLLH moved to defer its Position Paper pending answers to written interrogatories addressed to PHIC’s President and CEO and pending inspection/copying of the original transmittal letter and all other claims that accompanied Annex B of the Complaint (including the PhilHealth Claim Form 2 received June 19, 2007).

OLLH’s Motion for Discovery (Modes of Discovery Sought)

Written interrogatories to elicit facts and clarifications to enable intelligent preparation of a position paper and defense.
Motion for production and inspection of documents: specifically the transmittal letter and other claims that accompanied the alleged second claim dated June 19, 2007 (the PhilHealth Claim Form 2 and associated transmittal).
Stated grounds: OLLH alleged its representatives were denied access to documents and were not allowed to speak to PHIC personnel regarding the charge.

PHIC’s Response and Arbitration Department Rulings

PHIC filed a Comment opposing OLLH’s motion.
August 11, 2009 Resolution (Arbiter De Leon) denied OLLH’s motion, reasoning:
- Administrative proceedings before PHIC are summary in nature; interrogatories and motion for production/inspection cannot be given due course because allowing them would not hasten disposition but would undermine the IRR provisions (Sections 91 and 92 of the 2004 IRR as amended by R.A. No. 9241) calling for immediate resolution.
- OLLH’s allegations of denial of access were characterized as bare, unsubstantiated, and self-serving; the pleadings were perceived as designed to delay proceedings.
OLLH filed a Motion for Reconsideration; denied by the September 4, 2009 Order, which held:
- Koh v. Intermediate Appellate Court recognizes discovery’s importance but its recourse is not mandatory; the cited case pertained to civil court procedure and was not dispositive of administrative proceedings.
- Administrative bodies vested with adjudicatory power (citing Angara v. Electoral Commission) have implied power to prescribe their rules; PHIC is vested with quasi‑judicial power under Section 17 of R.A. No. 7875 and may provide its own rules.
- IRR provisions relevant to the Arbiter: Section 96 (original and exclusive jurisdiction of the Arbiter over complaints) and Section 112 (Arbiter’s discretion to resolve after submission of position papers or to conduct hearing when necessary).
- Interrogatories were improperly addressed to the President and CEO, who was not the most competent to answer technical questions about claims processing; resort to modes of discovery should be addressed to the competent party.
- The Arbiter believed the issues could be addressed in a hearing after submission of position papers; discovery pleadings were likely to delay resolution.

Court of Appeals Ruling

OLLH filed a petition for certiorari to the Court of Appeals.
July 27, 2010 CA Decision annulled and set aside the PHIC Arbitration Department’s Resolution and Order, holding:
- OLLH showed good cause for resort to modes of discovery because it needed to intelligently prepare its position paper and was allegedly denied access to pertinent documents and to PHIC personnel.
- The interrogatories sought information relevant and not privileged, pertaining to PHIC’s procedure in processing and evaluating claims.
- The transmittal letter and other claims accompanying the alleged second claim were material and relevant, being the basis for the charge of filing multiple claims.
- OLLH’s resort to discovery was necessary for preparation of its defense and the full determination of the issues in the administrative case.
CA Decision was penned by Associate Justice Ramon R. Garcia, with Associate Justices Rosmari D. Carandang and Manuel M. Barrios concurring (per footnote).

Questions Presented to the Supreme Court

Whether the Court of Appeals correctly found that the PHIC Arbitration Department gravely abused its discretion in denying OLLH’s motion for written interrogatories and production/inspection of documents.
Whether PHIC’s petition should be dismissed for alleged defecti