Legal basis and regulation transfer
- The circular is issued pursuant to Section 4 of Executive Order No. 192, Series of 2015, which transfers regulation and supervision of Health Maintenance Organizations (HMOs) to the Insurance Commission.
- The Rules establish the procedure for adjudicating certain disputes involving HMOs under the Commission’s regulatory authority.
Policy and procedural character
- Rule V, Section 1 provides that proceedings before the Commission are non-litigious in nature.
- The Commission must observe due process, but technicalities of law and procedure and court rules do not apply strictly.
- The Hearing Officer may use reasonable means to ascertain facts speedily, including ocular inspection and examination of well-informed persons.
Definitions and covered disputes
- A “Complainant” is a member (natural or juridical person) who initiates a complaint against an HMO doing business in the Philippines for membership issues or denial of benefits and services under an HMO agreement (Rule III, Section 1(a)).
- A “Respondent” is the HMO against whom relief is sought (Rule III, Section 1(b)).
- A “Person” includes a natural individual, corporation, partnership, limited liability partnership, association, or other juridical entity endowed with personality by law (Rule III, Section 1(c)).
- An “HMO” is a juridical entity legally organized to provide or arrange pre-agreed or designated health care services to enrolled members for a fixed pre-paid fee for a specified period (Rule III, Section 1(d)).
- A “Member” is the principal and/or dependent eligible for membership, accepted after complying with the Eligibility Provision, and currently enrolled under an HMO agreement (Rule III, Section 1(e)).
- A “Complaint” is a verified pleading alleging the complainant’s causes of action, stating names and addresses of all complainants and respondents, and verified under oath with a certificate of non-forum shopping; it includes all causes of action arising out of the same HMO Agreement (Rule III, Section 1(f)).
- An “Answer” is a respondent’s defenses, verified under oath by the respondent’s authorized representative (Rule III, Section 1(g)).
- A “Certificate to File Action” is a certification issued by the Public Assistance and Mediation Division certifying mediation occurred and failed to reach an amicable settlement (Rule III, Section 1(h)).
- Membership Issues include: eligibility for enrollment; cancellation of membership; return of membership fees upon cancellation; effective date and expiry date of membership; and membership fees (Rule III, Section 1(i)).
- Benefits and Services Issues include: coverage determination for an injury, illness, disability, or defect; annual benefit limit; eligible expenses; issuance/non-issuance of letter of authority; maximum benefit limit; medical necessity; and room and board accommodation (Rule III, Section 1(j)).
- Commission refers to the Insurance Commission and its District Offices; Commissioner refers to the Insurance Commissioner; Hearing Officer refers to lawyers under the Claims Adjudication Division and District Offices with a position of at least IC Attorney I (Rule III, Section 1(k)-(m)).
- “Doctor’s Affidavit” is an affidavit executed by the attending physician or company physician submitted by both parties to support why a condition is covered or not covered under the HMO agreement (Rule III, Section 1(n)).
Scope, jurisdiction, and damages limits
- The Rules govern hearings of claims and complaints where issues pertain to membership issues or benefits and services issues with an HMO under an HMO agreement (Rule II, Section 1).
- The Rules apply only to complaints filed by a member against an HMO (Rule II, Section 1).
- The Rules do not cover disputes arising from the contractual relations between HMOs and affiliated hospitals, medical clinics, and physicians (Rule II, Section 1).
- For any case under these Rules, only actual damages, attorney’s fees, and costs are recoverable; no other form of damages shall be recoverable except as to actual damages, attorney’s fees and costs (Rule II, Section 1).
Pleadings, notices, and representation
- Only complaints and answers are allowed as pleadings, and both must be verified under oath (Rule IV, Section 1).
- In Commission cases, the initiating party is the “Complainant” and the opposing party is the “Respondent” (Rule IV, Section 2).
- The full names of all real parties in interest must appear in the caption of the complaint and in the Commission’s decisions, resolutions, or orders (Rule IV, Section 2).
- All pleadings must be filed with the Commission and the filing party must serve opposing parties with a copy and supporting documents; no pleading is considered without proof of service, except when filed simultaneously during a Commission schedule (Rule IV, Section 3).
- Notices and copies of resolutions or orders must be served by registered mail or private courier (Rule IV, Section 4(a)).
- Decisions must be served on both parties and their counsel or representative by registered mail or private courier; for personal service sought by a party or counsel after inquiry, service is deemed effected as provided; if parties are numerous, service is made on counsel and on such number of complainants as practicable (Rule IV, Section 4(b)).
- For appeal purposes, the period counts from receipt of decisions/resolutions/orders by counsel or representative of record (Rule IV, Section 4(b)).
- A lawyer appearing for a party is presumed properly authorized and must indicate Attorney’s Roll Number, PTR, IBP, and MCLE compliance for the current year in pleadings and motions (Rule IV, Section 5(a)).
- Non-lawyer appearances in contravention of the Rules are not recognized in Commission proceedings (Rule IV, Section 5(b)).
- Appearances may be oral or in writing; counsel/authorized representative must state complete name and office address and ensure adverse party or counsel is properly notified (Rule IV, Section 5(c)).
- Counsel or representative must file a notice of address change, with copies furnished to the adverse party and counsel or representative, if any (Rule IV, Section 5(d)).
- Change or withdrawal of counsel or authorized representative must comply with the Rules of Court (Rule IV, Section 5(e)).
- Counsel and other authorized representatives may bind clients on procedural matters, but cannot enter into a compromise agreement in full or partial discharge of the client’s claim without a Special Power of Attorney or express consent (Rule IV, Section 6).
Commencement, summons, answers, and pre-trial
- An action commences upon filing a verified complaint with certificate of non-forum shopping, certificate to file action, and payment of docket fees (Rule V, Section 2).
- If the complaint omits the certificate to file action, the Hearing Officer must endorse the complaint to the Public Assistance and Mediation Division for mediation if none has been had, or for issuance of a certificate to file action if mediation was already conducted and terminated (Rule V, Section 2).
- Docket fees are based on principal amount claimed, exclusive of interest and attorney’s fees (Rule V, Section 3), using the following schedule:
- P100,000.00 and below: P1,000.00
- More than P100,000.00 up to P200,000.00: P2,000.00
- More than P200,000.00 up to P300,000.00: P3,000.00
- More than P300,000.00 up to P400,000.00: P4,000.00
- More than P400,000.00 up to P500,000.00: P5,000.00
- More than P500,000.00 up to P600,000.00: P6,000.00
- More than P600,000.00 up to P700,000.00: P7,000.00
- More than P700,000.00 up to P800,000.00: P8,000.00
- More than P800,000.00 up to P900,000.00: P9,000.00
- More than P900,000.00 up to P1,000,000.00: P10,000.00
- More than P1,000,000.00 up to P2,000,000.00: P15,000.00
- More than P2,000,000.00 up to P3,000,000.00: P20,000.00
- More than P3,000,000.00 up to P4,000,000.00: P25,000.00
- More than P4,000,000.00 up to P5,000,000.00: P30,000.00
- More than P5,000,000.00: P35,000.00
- A Legal Research Fund Fee is collected as one percent (1%) of the filing fee, but in no case shall be less than Ten Pesos (P10.00), in accordance with Republic Act No. 3870, as amended by President Decree No. 1856 dated December 26, 1982 (Rule V, Section 3).
- A party may seek authorization to litigate as an indigent by ex parte application and hearing where the Commission is satisfied the party has no money or property sufficient for food, shelter and basic necessities for himself and his family (Rule V, Section 4).
- Indigent authorization includes exemption from payment of docket and other lawful fees and transcripts of stenographic notes; exempted amounts become a lien on any judgment favorable to the indigent (Rule V, Section 4).
- After payment, the Commission enters the case in its docket book and inscribes the case number in the complaint (Rule V, Section 5).
- Within five (5) days from receipt of a complaint or amended complaint, the Hearing Officer issues summons attaching a copy of the complaint and annexes; summons directs the respondent to file an answer within ten (10) days from receipt (Rule V, Section 6).
- Summons must be served personally by a duly authorized public officer or by registered mail/private courier within three (3) days from issuance; service may follow the Rules of Court in special circumstances (Rule V, Section 7).
- Within ten (10) days from service, the respondent must file the answer and serve a copy on the complainant; unpleaded affirmative and negative defenses are deemed waived except lack of jurisdiction over the subject matter (Rule V, Section 8).
- No motion for extension of time to file an answer is allowed (Rule V, Section 8).
- If the respondent fails to answer within the period, the Commission must render judgment warranted by the facts alleged and limited to what is prayed for; the Commission may reduce interests and attorney’s fees claimed as excessive or otherwise unconscionable (Rule V, Section 9).
- The following are prohibited and shall not be allowed or acted upon (Rule V, Section 10):
- Motion to dismiss except on grounds of lack of jurisdiction over the subject matter, res judicata, prescription, extinguishment of liability by payment, and forum shopping
- Motion for Extension of Time to file an answer
- Motion for bill of particulars
- Motion for new trial
- Petition for Relief from Judgment
- Motion to declare respondent in default
- Motion for reconsideration of any decision or order of the Hearing Officer
- Appeal from any interlocutory order of the Hearing Officer, including denial of motions to dismiss, inhibit, issuance of writ of execution, and denial of motion to quash writ of execution
- Appeal from orders issued by the Hearing Officer in execution proceedings
- Any other similar pleadings or motions intended to circumvent the prohibitions
- A motion to dismiss may be filed within the answer period only on the allowed grounds; it must be resolved immediately by written order; denial or suspension until final determination is not appealable (Rule V, Section 11).
- No motion to dismiss may be allowed or entertained after the lapse of the Section 8 answer period (Rule V, Section 12).
Pre-trial, position papers, hearing, and decision timing
- A pre-trial conference must be held not later than thirty (30) days after the last answer is filed (Rule V, Section 13).
- The Hearing Officer must personally preside and control the pre-trial conference (Rule V, Section 13).
- The pre-trial conference aims to: (1) explore amicable settlement via fair compromise; (2) identify the real parties in interest; (3) determine necessity of amending the complaint and including all causes of action; (4) define and simplify issues; (5) enter admissions or stipulations of facts; (6) mark supporting documents and affidavits as evidence; and (7) address all other preliminary matters (Rule V, Section 13(a)).
- If parties fail to settle during pre-trial, the Hearing Officer continues with the remaining pre-trial purposes (Rule V, Section 14).
- Non-appearance of the complainant at the pre-trial conference despite due notice is a ground for dismissal of the case without prejudice (Rule V, Section 15).
- If the respondent fails to appear, the Hearing Officer terminates pre-trial, directs the complainant to file a verified position paper and submit evidence, and then renders decision based on evidence on record (Rule V, Section 15).
- After termination of the pre-trial conference without settlement, the Hearing Officer directs simultaneous verified position papers with supporting documents and affidavits (including doctors’ affidavits) on a date set within fifteen (15) calendar days from termination (Rule V, Section 16(a)).
- No amendment of the complaint is allowed after filing position papers unless the Hearing Officer grants leave (Rule V, Section 16(b)).
- Position papers must cover only claims and causes of action in the complaint or amended complaint, with supporting documents and marked affidavits that take the place of direct testimony, excluding settled matters (Rule V, Section 16(c)).
- A reply may be filed within fifteen (15) days from receipt of the adverse party’s position paper on a date set by the Hearing Officer; the reply must not allege or prove new facts or new causes of action beyond those in the original or amended complaint or raised in the position paper (Rule V, Section 16(d)).
- Immediately after position paper and reply submission, the Hearing Officer determines motu proprio whether a hearing or clarificatory conference is needed and may ask clarificatory questions, including requesting relevant documentary evidence (Rule V, Section 17).
- In hearing or clarificatory conference, the Hearing Officer personally conducts proceedings, may ask questions to clarify law or facts, may allow testimonial evidence with right of cross-examination, and must limit evidence to matters relevant and necessary for a just and speedy disposition (Rule V, Section 18(a)).
- The Hearing Officer issues a written summary of proceedings including substance of evidence, signed by the parties, and it forms part of the record (Rule V, Section 18(b)).
- No postponement or continuance is allowed except on meritorious grounds under expeditious disposition requirements; the hearing or clarificatory conference must be terminated within thirty (30) calendar days from the initial clarificatory conference (Rule V, Section 19(a)).
- If any party and counsel fail to appear during hearing or clarificatory conference despite due notice, proceedings continue ex parte, and the case is deemed submitted for decision (Rule V, Section 19(b)).
- Once position papers or replies or objections to a medical consultant’s recommendation are submitted (or the period to submit lapses), the case is deemed submitted for decision unless the Hearing Officer calls a hearing/clarificatory conference under Section 17; after termination, the case is deemed submitted for decision (Rule V, Section 20).
- The Commission must render its decision within sixty (60) working days, with no extension, after submission of the case for decision even without stenographic notes (Rule V, Section 21).
- Decisions must be clear and concise and include: (a) facts; (b) issues; (c) applicable laws or rules; (d) conclusions and reasons; and (e) the specific remedy or relief granted (Rule V, Section 22).
Finality, reconsideration, and appellate review
- A Decision or Order determining merits must be in writing, signed by the Commissioner, and served personally or by registered mail or private courier (Rule V, Section 23(a)).
- A Decision or Order becomes final and executory after fifteen (15) days from receipt by the parties unless a motion for reconsideration or an appeal is filed within the prescribed period (Rule V, Section 23(a)).
- Upon expiration of the period, the Commission may issue a certificate of finality upon written request by any party (Rule V, Section 23(b)).
- A motion for reconsideration must be filed within fifteen (15) calendar days from receipt of the decision or order, upon payment of P500.00 (Rule VI, Section 1).
- If the motion for reconsideration is denied, the movant may appeal under Rule VII (Rule VI, Section 1).
- No second motion for reconsideration is allowed (Rule VI, Section 1).
- The opposing party must file opposition within fifteen (15) calendar days from receipt of the motion for reconsideration and serve a copy on the movant (Rule VI, Section 2).
- The motion for reconsideration is deemed submitted for resolution after opposition is filed or after expiration of the opposition period without opposition, unless the Commission needs oral arguments and issues a corresponding order/notice (Rule VI, Section 3).
- Any party affected by a final order, ruling, or decision may appeal by filing a verified petition for review with the Court of Appeals within fifteen (15) days from notice, in seven (7) legible copies, serving the Commission and adverse party in accordance with Rule 43 of the Rules of Court (Rule VII, Section 1).
- The petition for review must contain a concise statement of facts and issues, grounds for review, and be accompanied by a duplicate original or certified true copy of the appealed ruling plus certified true copies of relevant record portions and other supporting papers, and must state specific material dates showing timely filing (Rule VII, Section 2).
- An appeal does not stay the award/judgment/final order/resolution unless the Court of Appeals directs otherwise on just terms (Rule VII, Section 3).
Contempt and execution mechanics
- The Commissioner or authorized Hearing Officer may summarily adjudge direct contempt for misbehavior committed in presence and while proceedings are ongoing, including disrespect, offensive personalities, or refusal to be sworn, answer as witness, or subscribe to affidavits/depositions when lawfully required (Rule VIII, Section 1).
- Direct contempt committed against the Commissioner is punishable by a fine not exceeding Two Thousand Pesos (P2,000.000).
- Direct contempt committed against a Hearing Officer is punishable by a fine not exceeding One Thousand Pesos (P1,000.000) (Rule VIII, Section 1).
- A person adjudged in direct contempt may not appeal but may seek certiorari or prohibition; execution is suspended pending resolution if a bond fixed by the Commission is filed conditioned on compliance with judgment if the petition is denied (Rule VIII, Section 2).
- The Commissioner or Hearing Officer may cite a person for indirect contempt under Rule 71 of the Rules of Court (Rule VIII, Section 3).
- A writ of execution may issue motu proprio or on motion upon a decision or order that has become final and executory (Rule VIII, Section 1).
- If appeal was duly perfected and finally resolved by the Court of Appeals, a motion for execution may be filed before the Commission with certified true copies of decisions/final orders sought to be enforced, including notice of decision/order and entry of judgment, with copies furnished to the adverse party (Rule VIII, Section 1(b)).
- Within ten (10) working days from receipt of a motion for issuance of writ of execution accompanied by a computation (if necessary), the Commission may schedule a pre-execution conference; orders issued in the pre-execution conference are not appealable (Rule VIII, Section 2).
- A writ of execution must issue in the name of the Republic of the Philippines, be signed by the Commission, order a duly authorized public officer to execute the decision/order/award, and state the complete name of the judgment debtor, the dispositive portion, the amount demanded (if any), and all legal fees to be collected (Rule VIII, Section 3).
- A writ of execution is effective for five (5) years from issuance, and if there is partial satisfaction, the Commission must motu proprio issue an updated writ reflecting collected amounts and remaining balance (Rule VIII, Section 3).
- The authorized public officer acting as Sheriff must serve the writ within five (5) days from receipt and must follow strictly the Rules of Court as amended (Rule VIII, Section 4).
Separability and publication effectivity
- If any provision of the Rules is declared invalid or unconstitutional, the remainder remains valid and subsisting (Rule IX, Section 1).
- Publication in top three (3) major broadsheet newspapers circulated nationwide is required, and the Rules take effect on March 1, 2018 (Rule IX, Section 2).