Policy, purpose, and legal foundation
- Executive Order No. 192 transfers HMO regulation to the Insurance Commission to regulate and supervise the establishment, operations, and financial activities of HMOs.
- Executive Order No. 192 is anchored on the President’s powers under Article VII, Sec. 17 of the Constitution to control executive departments and reorganize executive agencies under existing law.
- Executive Order No. 192 cites Sec. 31, Chapter 10, Title III, Book III of EO No. 292 (Administrative Code of 1987) as recognizing continuing presidential reorganization authority.
- Executive Order No. 192 cites Sec. 3(8), Chapter 1, Title IX, Book IV of the Administrative Code of 1987 mandating DOH to regulate operations of hospitals, clinics, dispensaries, and other establishments, including HMOs.
- Executive Order No. 192 cites PD No. 612 (s. 1974), as amended (Insurance Code of the Philippines) and Republic Act No. 9829 (Pre-Need Code of the Philippines) as bases for Insurance Commission supervision over entities operating under common concepts of premium/contributions and future contractual benefits.
Definition of an HMO
- An HMO refers to a juridical entity legally organized to provide or arrange for the provision of pre-agreed or designated health care services to enrolled members.
- The services must be provided for a fixed pre-paid fee for a specified period of time.
- The definition is applied in accordance with DOH Administrative Order No. 34 (s. 1994).
Transfer of HMO jurisdiction
- Jurisdiction over HMOs is transferred from the DOH to the Insurance Commission for regulation and supervision of establishment, operations, and financial activities.
- All HMOs are required to operate under the IC’s regulatory framework as described in Executive Order No. 192.
- Regulatory functions and related records that were under DOH jurisdiction for HMOs must be turned over to the IC under the transitory rules.
- The DOH retains referral responsibility for medical matters under Section 10.
IC regulatory powers over HMOs
- The IC must issue rules and guidelines on:
- HMO minimum capitalization, net worth, reserve funds, and security deposit requirements; and
- criteria for qualification and disqualification of directors, officers, and marketing personnel, and
- procedure for submission of reportorial and/or examination requirements, registration of contracts and plans, adjudication of claims, and other relevant matters.
- The IC must approve, amend, renew, decline, suspend, or revoke any license, registration, or certificate of authority issued in favor of HMOs.
- The IC must have authority to fix, assess, collect, and utilize fees and/or charges it finds reasonable in the exercise of its regulatory powers.
- The IC must regulate, supervise, and monitor HMO operations and management to ensure compliance with:
- Executive Order No. 192,
- existing laws, rules, and regulations, and
- directives and circulars issued by the Insurance Commissioner.
- The IC must issue orders to prevent fraud and injury to HMO plan holders and industry stakeholders.
- The IC may order the examination of documents, papers, files, tax returns, books of accounts, and other records of any entity, person, or any HMO under investigation, including those with related interests.
- The IC must impose sanctions and/or appropriate penalties pursuant to existing laws, rules, and regulations.
- The IC may enlist aid of and/or deputize government law enforcement agencies to implement IC powers and functions under Executive Order No. 192.
- The IC may issue directives including the appointment of conservators, receivers, or liquidators for HMOs that fail to comply with Executive Order No. 192, related laws, rules, regulations, orders, and circulars.
- The IC must prepare, approve, or amend rules, regulations, orders, and circulars, and issue opinions and guidance while supervising compliance.
- The IC must formulate policies and recommendations concerning the health maintenance industry, including proposed legislation.
- The IC must exercise other powers provided by law and powers implied or necessary to achieve the objectives and purposes of Executive Order No. 192.
License to operate requirement
- All HMOs, whether investor-based, community-based, or cooperative, must comply with regulatory requirements by procuring a License to Operate from the IC.
- The IC must honor a previously issued “Clearance to Operate” by the DOH.
- The DOH clearance may be subject to modifications, revisions, adjustments, and changes in accordance with the implementing rules and regulations.
Organizational and transition mechanisms
- The IC, in coordination with the Department of Budget and Management, is authorized to streamline and augment its human resource component to perform and exercise its functions under Executive Order No. 192 effectively and efficiently.
- The DOH and the IC may enter into inter-agency agreements to ensure full and appropriate transfer of HMO functions, including temporary detail of DOH personnel to the IC for implementation.
- The IC must constitute a special team to handle all matters related to HMOs.
Transitory transfer of DOH functions and records
- All books, contracts, correspondences, documents, papers, records, other associated items, and pending business pertaining to DOH powers, duties, rights, and responsibilities over HMOs must be turned over, transferred, and delivered to the IC for continuation, modification, or termination.
- Transfer of information must not violate any applicable confidentiality constraints.
- The IC special team must secure and transfer all HMO-related files and records of the DOH to the IC within ninety (90) days from the effectivity of Executive Order No. 192.
- Personnel under the DOH affected by the order must continue their service with the DOH.
- Affected DOH personnel may be detailed to the IC for efficient transition and effective discharge of functions under Executive Order No. 192.
Oversight committee and DOH medical role
- An Oversight Committee is created to ensure effective transfer of jurisdiction and regulation over HMOs.
- The Oversight Committee is composed of:
- Secretary of Finance as Chairman;
- Secretary of Health as member; and
- Insurance Commissioner as member.
- The Oversight Committee exists until 30 June 2016.
- All issues relating to medical matters—including but not limited to:
- practice of the medical profession,
- medical procedures and standards,
- health programs, policies, services, and facilities
— must be referred to the DOH.
Funding and implementing issuances
- Funding required to carry out Executive Order No. 192 must be taken from the current appropriations of the IC.
- Subsequent funding requirements must be incorporated in the annual budget proposal of the IC.
- The IC must formulate, adopt, and implement rules, regulations, and other issuances necessary for effective implementation.
Repeal, separability, and compliance consequences
- All orders, issuances, or parts thereof that are inconsistent with Executive Order No. 192 are repealed or modified accordingly.
- If any provision of Executive Order No. 192 is declared invalid or unconstitutional, the remaining provisions not affected remain valid and subsisting.
- The IC has authority to impose sanctions and/or appropriate penalties pursuant to existing laws, rules, and regulations.