Limitations of Fee-For-Service Payment Mechanism
- Fee-for-Service (FFS) leads to prolonged hospital stays, overutilization of diagnostics, unnecessary healthcare services.
- Resulted in wasted payments, straining PhilHealth’s financial and administrative resources.
- Inequity observed as private HCIs receive higher payment than government HCIs for similar conditions, disadvantaging indigent members.
- Sponsored members still face cost-sharing, limiting access to quality care.
Advantages and Rationale for Case-Based Payment Mechanism
- Aligns with the global trend towards Universal Health Care (Kalusugan Pangkalahatan Program).
- Case-based payments, especially Case Rates (CR), provide one uniform rate covering essential health services.
- Promotes equitable basic benefits regardless of member category or type of healthcare institution.
- Improves administrative efficiency and reduces claims processing turnaround times.
- Enables No Balance Billing (NBB) policy for indigent members in government hospital wards.
- Strengthens members’ knowledge and control over their entitlements.
Initial Implementation and Board Directives
- Case Rates initially covered only 23 medical conditions, limiting full realization.
- Turnaround time for claims improved from 70+ to as low as 17 days in some regions.
- PhilHealth Board approved full shift from FFS to Case Rates to expand coverage and efficiency.
- Extensive nationwide consultations guided policy development.
Objectives of the Case Rate Policy
- Phase out fee-for-service payment mechanism.
- Simplify reimbursement rates understandable to all sectors.
- Improve turnaround time for claims processing.
Scope and Coverage
- Case rate payments apply uniformly to all medical conditions and selected procedures admitted in accredited health care institutions.
- Includes day surgeries and select procedures.
- Applicable to directly filed claims by members subject to rules.
Key Definitions
- Case-Based Payment: Fixed-rate payment per treated case/disease.
- Case Rate (CR): Fixed amount covering all fees including professional fees, room, diagnostics, drugs, and other related expenses.
- Day Surgery: Elective surgical procedures allowing same-day discharge.
- Relative Value Scale (RVS) and Units (RVU): Coding system assigning complexity values to surgical procedures.
- ICD-10: Statistical classification for diseases.
- Critical Poor: Poor patients identified by hospital social workers who can avail benefits.
- Sponsored Members: Members whose contributions are paid by third parties.
- Geographically Isolated and Disadvantaged Areas (GIDA): Communities characterized by physical and socioeconomic isolation.
- Charge to Future Claims: Recovery method for sanctions or prior incorrect payments.
- No Balance Billing (NBB): Policy prohibiting extra charges beyond case rates for indigents.
General Policies on Case Rate Payments
- Fee-for-service phased out; case rates preferred and mandatory for all claims.
- Aim to reduce out-of-pocket expenses for patient-members.
- Surgical case rates payable fully regardless of inpatient or outpatient status.
- Payments made directly to health care institutions, which are accountable for the care and disbursement to health professionals.
- Health Care Institutions must facilitate timely payment to professionals (within 30 days).
- PhilHealth communicates payment details to professionals.
- Institutions must withhold taxes (withholding tax, VAT, and income tax) as per regulations.
- Credentialing and privileging of doctors delegated to healthcare institutions; no tiered payments by specialization.
- Claims filing by institutions within 60 days; direct member filing allowed only under specific conditions.
- NBB policy applies to indigent and sponsored members.
- Specific guidelines for special situations like GIDA, health human resource shortages, and emergency care.
Member Benefits Under Case Rates
- Health care institutions must deduct the entire case rate amount from patient’s hospital bills including professional fees.
- Services must be provided by PhilHealth-accredited professionals for claims to be reimbursed.
- Claims denied if services provided only by non-accredited professionals.
- For patients with co-morbidities or multiple procedures, PhilHealth may pay for admissible conditions within Board-set limits.
- Further details on multiple case payments to be published separately.
System Enhancements
- PhilHealth database improvements to generate real-time, quality, evidence-based information for policy and rate adjustments.
Compliance Monitoring
- Regular monitoring and evaluation of healthcare provider compliance.
- Post-audit of claims according to existing guidelines.
Periodic Review and Adjustments
- Annual review of case rate policy and rates.
- Use of costing surveys, medical society proposals, monitoring outcomes, and stakeholder feedback for rate enhancements.
Penalties and Sanctions
- Violations subject to penalties under Republic Act 7875 as amended and PhilHealth issuances.
- Inclusion of violations in healthcare provider performance evaluations (PEACHeS).
- Penalties charged to future healthcare institution claims.
- Decisions shared with DOH, PRC, and other agencies for further action.
Repealing Clause
- All previous inconsistent provisions amended, modified, or repealed.
Separability Clause
- Invalidity of part of the Circular does not affect remaining provisions.
Effectivity
- The Circular takes effect 15 days after publication and registration with the National Administrative Register.