February 14, 1995

AN ACT INSTITUTING A NATIONAL HEALTH INSURANCE PROGRAM FOR ALL FILIPINOS AND ESTABLISHING THE PHILIPPINE HEALTH INSURANCE CORPORATION FOR THE PURPOSE

SECTION 1. Short Title. — This Act shall be known as the “National Health Insurance Act of 2013”. (As amended by RA No 10606)

ARTICLE I Guiding Principles

SECTION 2. Declaration of Principles and Policies. — It is hereby declared the policy of the State to adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost and to provide free medical care to paupers. Towards this end, the State shall provide comprehensive health care services to all Filipinos through a socialized health insurance program that will prioritize the health care needs of the underprivileged, sick, elderly, persons with disabilities (PWDs), women and children and provide free health care services to indigents. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

Pursuant to this policy, the State shall adopt the following principles:

a) Allocation of National Resources for Health — The Program shall underscore the importance for government to give priority to health as a strategy for bringing about faster economic development and improving quality of life.

b) Universality — The Program shall provide all citizens with the mechanism to gain financial access to health services, in combination with other government health programs. The National Health Insurance Program shall give the highest priority to achieving coverage of the entire population with at least a basic minimum package of health insurance benefits;

c) Equity — The Program shall provide for uniform basic benefits. Access to care must be a function of a person's health needs rather than his ability to pay;

d) Responsiveness — The Program shall adequately meet the needs for personal health services at various stages of a member's life;

e) Social Solidarity — The Program shall be guided by community spirit. It must enhance risk sharing among income groups, age groups, and persons of differing health status, and residing in different geographic areas;

f) Effectiveness — The Program shall balance economical use of resources with quality of care;

g) Innovation — The Program shall adapt to changes in medical technology, health service organizations, health care provider payment systems, scopes of professional practice, and other trends in the health sector. It must be cognizant of the appropriate roles and respective strengths of the public and private sectors in health care, including people's organizations and community-based health care organizations;

h) Devolution — The Program shall be implemented in consultation with local government units (LGUs), subject to the overall policy directions set by the National Government;

i) Fiduciary Responsibility — The Program shall provide effective stewardship, funds management, and maintenance of reserves;

j) Informed Choice — The Program shall encourage members to choose from among accredited health care providers. The Corporation's local offices shall objectively apprise its members of the full range of providers involved in the Program and of the services and privileges to which they are entitled as members. This explanation, which the members may use as a guide in selecting the appropriate and most suitable provider, shall be given in clear and simple Filipino and in the local languages that is comprehensible to the member;

k) Maximum Community Participation — The Program shall build on existing community initiatives for its organization and human resource requirements;

l) Compulsory Coverage — All citizens of the Philippines shall be required to enroll in the National Health Insurance Program in order to avoid adverse selection and social inequity;

m) Cost Sharing — The Program shall continuously evaluate its cost sharing schedule to ensure that costs borne by the members are fair and equitable and that the charges by health care providers are reasonable;

n) Professional Responsibility of Health Care Providers — The Program shall assure that all participating health care providers are responsible and accountable in all their dealings with the Corporation and its members;

o) Public Health Services — The Government shall be responsible for providing public health services for all groups such as women, children, indigenous people, displaced communities and communities in environmentally endangered areas, while the Program shall focus on the provision of personal health services. Preventive and promotive public health services are essential for reducing the need and spending for personal health services;

p) Quality of Services — The Program shall promote the improvement in the quality of health services provided through the institutionalization of programs of quality assurance at all levels of the health service delivery system. The satisfaction of the community, as well as individual beneficiaries, shall be a determinant of the quality of service delivery;

q) Cost Containment — The program shall incorporate features of cost containment in its design and operations and provide a viable means of helping the people pay for health care services; and

r) Care for the Indigent — The Government shall be responsible for providing a basic package of needed personal health services to indigents through premium subsidy, or through direct service provision until such time that the program is fully implemented.

SECTION 3. General Objectives. — This Act seeks to:

a) provide all citizens of the Philippines with the mechanism to gain financial access to health services;

b) create the National Health Insurance Program, hereinafter referred to as the Program, to serve as the means to help the people pay for health care services;

c) prioritize and accelerate the provision of health services to all Filipinos, especially that segment of the population who cannot afford such services; and

d) establish the Philippine Health Insurance Corporation, hereinafter referred to as the Corporation, that will administer the Program at central and local levels.

ARTICLE II Definitions of Terms

SECTION 4. Definitions of Terms. — For the purpose of this Act, the following terms shall be defined as follows:

a) Beneficiary — Any person entitled to health care benefits under this Act.

b) Benefit Package — Services that the Program offers to its members.

c) Capitation — A payment mechanism where a fixed rate, whether per person, family, household, or group, is negotiated with a health care provider who shall be responsible for delivering or arranging for the delivery of health services required by the covered person under the conditions of a health care provider contract.

d) Contribution — The amount paid by or in behalf of a member to the Program for coverage, based on salaries or wages in the case of formal sector employees, and on household earnings and assets, in the case of self-employed, or on other criteria as may be defined by the Corporation in accordance with the guiding principles set forth in Article 1 of this Act.

e) Coverage — The entitlement of an individual, as a member or as a dependent, to the benefits of the Program.

f) Dependent — The legal dependents of a member are: 1) the legitimate spouse who is not a member; 2) the unmarried and unemployed legitimate, legitimated, illegitimate, acknowledged children as appearing in the birth certificate; legally adopted or stepchildren below twenty-one (21) years of age; 3) children who are twenty-one (21) years old or above but suffering from congenital disability, either physical or mental, or any disability acquired that renders them totally dependent on the member of our support; (4) the parents who are sixty (60) years old or above whose monthly income is below an amount to be determined by the Corporation in accordance with the guiding principles set forth in Article I of this Act; and (5) parents with permanent disability that render them totally dependent on the member for subsistence. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

g) Diagnostic Procedure — Any procedure to identify a disease or condition through analysis and examination.

h) Emergency — An unforeseen combination of circumstances which calls for immediate action to preserve the life of a person or to preserve the sight of one or both eyes; the hearing of one or both ears; or one or two limbs at or above the ankle or wrist.

i) Employee — Any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship.

j) Employer — A natural or juridical person who employs the services of an employee.

k) Enrollment — The process to be determined by the Corporation in order to enlist individuals as members or dependents covered by the Program.

l) Fee for Service — A fee pre-determined by the Corporation for each service delivered by a health care provider based on the bill. The payment system shall be based on a pre-negotiated schedule promulgated by the Corporation. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

m) Global Budget — An approach to the purchase of medical services by which health care provider negotiations concerning the costs of providing a specific package of medical benefits is based solely on a predetermined and fixed budget.

n) Government Service Insurance System — The Government Service Insurance System created under Commonwealth Act No. 186, as amended.

o) Health Care Provider — Refers to:

(1) a health care institution, which is duly licensed and accredited devoted primarily to the maintenance and operation of facilities for health promotion, prevention, diagnosis, treatment, and care of individuals suffering from illness, disease, injury, disability or deformity, drug addiction or in need of obstetrical or other medical and nursing care. It shall also be construed as any institution, building, or place where there are installed beds, cribs, or bassinets for twenty-four hour use or longer by patients in the treatment of diseases, injuries, deformities, or abnormal physical and mental states, maternity cases or sanitarial care; or infirmaries, nurseries, dispensaries, rehabilitation centers and such other similar names by which they may be designated; or

(2) a health care professional, who is any doctor of medicine, nurse, midwife, dentist, or other health care professional or practitioner duly licensed to practice in the Philippines and accredited by the Corporation; or

(3) a health maintenance organization, which is an entity that provides, offers, or arranges for coverage of designated health services needed by plan members for a fixed prepaid premium; or

(4) a community-based health care organization, which is an association of indigenous members of the community organized for the purpose of improving the health status of that community through preventive, promotive and curative health services.

p) Health Insurance Identification (ID) Card — The document issued by the Corporation to members and dependents upon their enrollment to serve as the instrument for proper identification, eligibility verification, and utilization recording.

q) Indigent — A person who has no visible means of income, or whose income is insufficient for the subsistence of his family, as identified by the Department of Social Welfare and Development (DSWD) based on specific criteria set for this purpose in accordance with the guiding principles set forth in Article I of this Act. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

r) Inpatient Education Package — A set of informational services made available to an individual who is confined in a hospital to afford him with knowledge about his illness and its treatment, and of the means available, particularly lifestyle changes, to prevent the recurrence or aggravation of such illness and to promote his health in general.

s) Member — Any person whose premiums have been regularly paid to the National Health Insurance Program who may be a paying member, a sponsored member, or a lifetime member. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

t) Means Test — A protocol administered at the barangay level to determine the ability of individuals or households to pay varying levels of contributions to the Program, ranging from the indigent in the community whose contributions should be totally subsidized by the government, to those who can afford to subsidize part but not all the required contributions for the Program.

u) Medicare — The health insurance program currently being implemented by the Philippine Medical Care Commission. It consists of:

(1) Program I, which covers members of the SSS and GSIS including their legal dependents; and

(2) Program II, which is intended for those not covered under Program I.

v) National Health Insurance Program — The compulsory health insurance program of the government as established in this Act, which shall provide universal health insurance coverage and ensure affordable, acceptable, available and accessible health care services for all citizens of the Philippines.

w) Pensioner — An SSS or GSIS member who receives pensions therefrom.

x) Personal Health Services — Health Services in which benefits accrue to the individual person. These are categorized into inpatient and outpatient services.

y) Philippine Medical Care Commission — The Philippine Medical Care Commission created under Republic Act No. 6111, as amended.

z) Philippine National Drug Formulary — The essential drugs list for the Philippines which is prepared by the National Drug Committee of the Department of Health in consultation with experts and specialists from organized professional medical societies, medical academe and the pharmaceutical industry, and which is updated every year.

(aa) Portability — The enablement of a member to avail of Program benefits in an area outside the jurisdiction of his Local Health Insurance Office.

(bb) Prescription Drug — A drug which has been approved by the Bureau of Food and Drug and which can be dispensed only pursuant to a prescription order from a physician who is duly licensed to do so.

(cc) Public Health Services — Services that strengthen preventive and promotive health care through improving conditions in partnership with the community at large. These include control of communicable and non-communicable diseases, health promotion, public information and education, water and sanitation, environmental protection, and health-related data collection, surveillance, and outcome monitoring.

(dd) Quality Assurance — A formal set of activities to review and ensure the quality of services provided. Quality assurance includes quality assessment and corrective actions to remedy any deficiencies identified in the quality of direct patient, administrative, and support services.

(ee) Residence — The place where the member actually lives.

(ff) Retiree — A member of the Program who has reached the age of retirement as provided for by law or who was retired on account of permanent disability as certified by the employer and the Corporation. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

(gg) Self-employed — A person who works for himself and is therefore both employee and employer at the same time.

(hh) Social Security System — The Social Security System created under Republic Act No. 1161, as amended.

(ii) Treatment Procedure — Any method used to remove the symptoms and cause of a disease.

(jj) Utilization Review — A formal review of patient utilization or of the appropriateness of health care services, on a prospective, concurrent or retrospective basis.

(kk) Rehabilitation Center — Refers to a facility, which undertakes rehabilitation of drug dependents. It includes institutions, agencies and the like which have for their purpose, the development of skills, or which provides counselling, or which seeks to inculcate, social and moral values to clientele who have a drug problem with the aim of weaning them from drugs and making them drug free, adapted to their families and peers, and readjusted into the community as law-abiding, useful and productive citizens.

(ll) Home Care and Medical Rehabilitation Services — Refer to skilled nursing care, which members get in their homes/clinics for the treatment of an illness or injury that severely affects their activities or daily living. Home care and medical rehabilitation services include hospice or palliative care for people who are terminally ill but does not include custodial and non-skilled personal care. (Amendment to R.A. No. 7875, Republic Act No. 9241, [February 10, 2004])

(mm) Abandoned Children — Children who have no known family willing and capable to take care of them and are under the care of the DSWD, orphanages, churches and other institutions.

(nn) Case-based Payment — Hospital payment method that reimburses to hospitals a predetermined fixed rate for each treated case or disease; also called per case payment.

(oo) Health Technology Assessment — A field of science that investigates the value of a health technology such as procedure, process, products, or devices, specifically on their quality, relative cost-effectiveness and safety. It usually involves the science of epidemiology and economics. It has implications on policy, decision to adopt and invest in these technologies, or in health benefit coverage.

(pp) Informal Sector — Units engaged in the production of goods and services with the primary objective of generating employment and income for the persons concerned. It consists of households, unincorporated enterprises that are market and nonmarket producers of goods, as well as market producers of services.

These enterprises are operated by own-account workers, which may employ unpaid family workers as well as occasional, seasonally hired workers.

To this sector belong, among others, street hawkers, market vendors, pedicab and tricycle drivers, small construction workers and home-based industries and services.

(qq) Other Self-earning Individuals — Individuals who render services or sell goods as a means of livelihood outside of an employer-employee relationship, or as a career, but do not belong to the informal sector. These include businessmen, entrepreneurs, actors, actresses and other performers, news correspondents, professional athletes, coaches, trainers, and other individuals as recognized by the Department of Labor and Employment (DOLE) and/or the Bureau of Internal Revenue (BIR).

(rr) Out-patient Services — Health services such as diagnostic consultation, examination, treatment, surgery and rehabilitation on an out-patient basis.

(ss) Professional Practitioners — Include doctors, lawyers, certified public accountants, and other practitioners required to pass government licensure examinations in order to practice their professions.

(tt) Traditional and Alternative Health Care — The application of traditional knowledge, skills and practice of alternative health care or healing methods which include reflexology, acupuncture, massage, accupressure, chiropractics, nutritional therapy and other similar methods in accordance with the accreditation guidelines set forth by the Corporation and the Food and Drug Administration (FDA).

(uu) Lifetime Member — A former member who has reached the age of retirement under the law and has paid at least one hundred twenty (120) monthly premium contributions.

(vv) Members in the Formal Economy — Workers with formal contracts and fixed terms of employment including workers in the government and private sector, whose premium contribution payments are equally shared by the employee and the employer.

(ww) Members in the Informal Economy — Workers who are not covered by formal contracts or agreements and whose premium contributions are self-paid or subsidized by another individual through a defined criteria set by the Corporation.

(xx) Migrant Workers — Documented or undocumented Filipinos who are engaged in a remunerated activity in another country of which they are not citizens.

(yy) Sponsored Member — A member whose contribution is being paid by another individual, government agency, or private entity according to the rules as may be prescribed by the Corporation.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

ARTICLE III The National Health Insurance Program

SECTION 5. Establishment and Purposes. — There is hereby created the National Health Insurance Program which shall provide health insurance coverage and ensure affordable, acceptable, available and accessible health care services for all citizens of the Philippines, in accordance with the policies and specific provisions of this Act. This social insurance program shall serve as the means for the healthy to help pay for the care of the sick and for those who can afford medical care to subsidize those who cannot. It shall initially consist of programs I and II or Medicare and be expanded progressively to constitute one universal health insurance program for the entire population. The Program shall include a sustainable system of funds constitution, collection, management and disbursement for financing the availment of a basic minimum package and other supplementary packages of health insurance benefits by a progressively expanding proportion of the population. The Program shall be limited to paying for the utilization of health services by covered beneficiaries or to purchasing health services in behalf of such beneficiaries. It shall be prohibited from providing health care directly, from buying and dispensing drugs and pharmaceuticals, from employing physicians and other professionals for the purpose of directly rendering care, and from owning or investing in health care facilities.

SECTION 6. Mandatory Coverage. — All citizens of the Philippines shall be covered by the National Health Insurance Program. In accordance with the principles of universality and compulsory coverage enunciated in Section 2(b) and 2(l) hereof, implementation of the Program shall ensure sustainability of coverage and continuous enhancement of the quality of service: Provided, That the Program shall be compulsory in all provinces, cities and municipalities nationwide, notwithstanding the existence of LGU-based health insurance programs: Provided, further, That the Corporation, Department of Health (DOH), local government units (LGUs), and other agencies including nongovernmental organizations (NGOs) and other national government agencies (NGAs) shall ensure that members in such localities shall have access to quality and cost-effective health care services. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 7. Enrollment. — The Corporation shall enroll beneficiaries in order for them to avail of benefits under this Act with the assistance of the financial arrangements provided by the Corporation under the following categories:

(a) Members in the formal economy;

(b) Members in the informal economy;

(c) Indigents;

(d) Sponsored members; and

(e) Lifetime members.

The process of enrollment shall include the identification of beneficiaries, issuance of appropriate documentation specifying eligibility to benefits, and indicating how membership was obtained or is being maintained.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 8. Health Insurance Identification (ID) Card and ID Number. — In conjunction with the enrollment provided above, the Corporation through its local office shall issue a health insurance ID with a corresponding ID number which shall be used for purposes of identification, eligibility verification, and utilization recording. The issuance of this ID card shall be accompanied by a clear explanation to the enrollee of his rights, privileges and obligations as a member. A list of health care providers accredited by the Local Health Insurance Office shall likewise be provided to the member together with the ID card.

The absence of the ID card shall not prejudice the right of any member to avail of benefits or medical services under the National Health Insurance Program (NHIP).

This health insurance ID card with a corresponding ID number shall be recognized as a valid government identification and shall be presented and honored in transactions requiring the verification of a person's identity.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 9. Change of Residence. — A citizen can be under only one Local Health Insurance Office which shall be located in the province or city of his place of residence. A person who changes residence, becomes temporarily employed, or for other justifiable reasons, is transferred to another locality should inform said Office of such transfer and subsequently transfer his Program membership.

SECTION 10. Benefit Package. — Members and their dependents are entitled to the following minimum services, subject to the limitations specified in this Act and as may be determined by the Corporation:

(a) Inpatient hospital care:

(1) room and board;

(2) services of health care professionals;

(3) diagnostic, laboratory, and other medical examination services;

(4) use of surgical or medical equipment and facilities;

(5) prescription drugs and biologicals, subject to the limitations stated in Section 37 of this Act; and

(6) inpatient education packages;

(b) Outpatient care:

(1) services of health care professionals;

(2) diagnostic, laboratory, and other medical examination services;

(3) personal preventive services; and

(4) prescription drugs and biologicals, subject to the limitations described in Section 37 of this Act;

(c) Emergency and transfer services; and

(d) Such other health care services that the Corporation and the DOH shall determine to be appropriate and cost-effective.

These services and packages shall be reviewed annually to determine their financial sustainability and relevance to health innovations, with the end in view of quality assurance, increased benefits and reduced out-of-pocket expenditure.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 11. Excluded Personal Health Services. — The Corporation shall not cover expenses for health services which the Corporation and the DOH consider cost-ineffective through health technology assessment.

The Corporation may institute additional exclusions and limitations as it may deem reasonable in keeping with its protection objectives and financial sustainability. (Amendment to R.A. No. 7875, Republic Act No. 9241, [February 10, 2004], as further amended by National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 12. Entitlement to Benefits. — A member whose premium contributions for at least three (3) months have been paid within six (6) months prior to the first day of availment, including those of the dependents, shall be entitled to the benefits of the Program: Provided, That such member can show that contributions have been made with sufficient regularity: Provided, further, That the member is not currently subject to legal penalties as provided for in Section 44 of this Act.

The following need not pay the monthly contributions to be entitled to the Program's benefits:

(a) Retirees and pensioners of the SSS and GSIS prior to the effectivity of this Act; and

(b) Lifetime members.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 13. Portability of Benefits. — The corporation shall develop and enforce mechanisms and procedures to assure that benefits are portable across Offices.

ARTICLE IV The Philippine Health Insurance Corporation

SECTION 14. Creation and Nature of the Corporation. — There is hereby created a Philippine Health Insurance Corporation, which shall have the status of a tax-exempt government corporation attached to the Department of Health for Policy coordination and guidance.

SECTION 15. Exemption from Taxes and Duties. — The Corporation shall be exempt from the payment of taxes on all contributions thereto and all accruals on its income or investment earnings.

Any donation, contribution, bequest, subsidy or financial aid which may be made to the Corporation shall constitute as allowable deduction from the income of the donor for income tax purposes and shall be exempt from donor's tax, subject to such conditions as provided in the National Internal Revenue Code, as amended.

SECTION 16. Powers and Functions. — The Corporation shall have the following powers and functions:

a) to administer the National Health Insurance Program;

b) to formulate and promulgate policies for the sound administration of the Program;

c) To supervise the provision of health benefits and to set standards, rules, and regulations necessary to ensure quality of care, appropriate utilization of services, fund viability, member satisfaction, and overall accomplishment of Program objectives; (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

d) to formulate and implement guidelines on contributions and benefits; portability of benefits, cost containment and quality assurance; and health care provider arrangements, payment methods; and referral systems;

e) to establish branch offices as mandated in Article V of this Act;

f) to receive and manage grants, donations, and other forms of assistance;

g) to sue and be sued in court;

h) to acquire property, real and personal, which may be necessary or expedient for the attainment of the purposes of this Act;

i) to collect, deposit, invest, administer, and disburse the National Health Insurance Fund in accordance with the provisions of this Act;

j) To negotiate and enter into contracts with health care institutions, professionals, and other persons, juridical or natural, regarding the pricing, payment mechanisms, design and implementation of administrative and operating systems and procedures, financing, and delivery of health services in behalf of its members; (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

k) to authorize Local Health Insurance Offices to negotiate and enter into contracts in the name and on behalf of the Corporation with any accredited government or private sector health provider organization, including but not limited to health maintenance organizations, cooperatives and medical foundations, for the provision of at least the minimum package of personal health services prescribed by the Corporation;

l) to determine requirements and issue guidelines for the accreditation of health care providers for the Program in accordance with this Act;

m) To visit, enter and inspect facilities of health care providers and employers during office hours, unless there is reason to believe that inspection has to be done beyond office hours, and where applicable, secure copies of their medical, financial, and other records and data pertinent to the claims, accreditation, premium contribution, and that of their patients or employees, who are members of the Program; (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

n) to organize its office, fix the compensation of and appoint personnel as may be deemed necessary and upon the recommendation of the president of the Corporation;

o) to submit to the President of the Philippines and to both Houses of Congress its Annual Report which shall contain the status of the National Health Insurance Fund, its total disbursements, reserves, average costings to beneficiaries, any request for additional appropriation, and other data pertinent to the implementation of the Program and publish a synopsis of such report in two (2) newspapers of general circulation;

p) To keep records of the operations of the Corporation and investments of the National Health Insurance Fund;

(q) To establish and maintain an electronic database of all its members and ensure its security to facilitate efficient and effective services;

(r) To invest in the acceleration of the Corporation's information technology systems;

(s) To conduct an information campaign on the principles of the NHIP to the public and to accredited health care providers. This campaign must include the current benefit packages provided by the Corporation, the mechanisms to avail of the current benefit packages, the list of accredited and disaccredited health care providers, and the list of offices/branches where members can pay or check the status of paid health premiums;

(t) To conduct post-audit on the quality of services rendered by health care providers;

(u) To establish an office, or where it is not feasible, designate a focal person in every Philippine Consular Office in all countries where there are Filipino citizens. The office or the focal person shall, among others, process, review and pay the claims of the overseas Filipino workers (OFWs);

(v) Notwithstanding the provisions of any law to the contrary, to impose interest and/or surcharges of not exceeding three percent (3%) per month, as may be fixed by the Corporation, in case of any delay in the remittance of contributions which are due within the prescribed period by an employer, whether public or private. Notwithstanding the provisions of any law to the contrary, the Corporation may also compromise, waive or release, in whole or in part, such interest or surcharges imposed upon employers regardless of the amount involved under such valid terms and conditions it may prescribe;

(w) To endeavor to support the use of technology in the delivery of health care services especially in farflung areas such as, but not limited to, telemedicine, electronic health record, and the establishment of a comprehensive health database;

(x) To monitor compliance by the regulatory agencies with the requirements of this Act and to carry out necessary actions to enforce compliance;

(y) To mandate the national agencies and LGUs to require proof of PhilHealth membership before doing business with a private individual or group;

(z) To accredit independent pharmacies and retail drug outlets; and

(aa) To perform such other acts as it may deem appropriate for the attainment of the objectives of the Corporation and for the proper enforcement of the provisions of this Act.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 17. Quasi-Judicial Powers. — The Corporation, to carry out its tasks more effectively, shall be vested with the following powers:

a) Subject to the respondent's right to due process, to conduct investigations for the determination of a question, controversy, complaint, or unresolved grievance brought to its attention, and render decisions, orders, or resolutions thereon. It shall proceed to hear and determine the case even in the absence of any party who has been properly served with notice to appear. It shall conduct its proceedings or any part thereof in public or in executive session; adjourn its hearings to any time and place; refer technical matters or accounts to an expert and to accept his reports as evidence; direct parties to be joined in or excluded from the proceedings; and give all such directions as it may deem necessary or expedient in the determination of the dispute before it; (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

b) to summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the production of documents and other materials necessary to a just determination of the case under investigation;

c) Subject to the respondent's right to due process, to suspend temporarily, revoke permanently, or restore the accreditation of a health care provider or the right to benefits of a member and/or impose fines. The decision shall immediately be executory, even pending appeal, when the public interest so requires and as may be provided for in the implementing rules and regulations. Suspension of accreditation shall not exceed six (6) months. Suspension of the rights of members shall not exceed six (6) months.

The revocation of a health care provider's accreditation shall operate to disqualify him from obtaining another accreditation in his own name, under a different name, or through another person, whether natural or juridical.

The Corporation shall not be bound by the technical rules of evidence.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 18. The Board of Directors. —

a) Composition — The Corporation shall be governed by a Board of Directors hereinafter referred to as the Board, composed of the following members:

The Secretary of Health;

The Secretary of Labor and Employment or a permanent representative;

The Secretary of the Interior and Local Government or a permanent representative;

The Secretary of Social Welfare and Development or a permanent representative;

The Secretary of the Department of Finance (DOF) or a permanent representative;

The President and Chief Executive Officer (CEO) of the Corporation;

The SSS Administrator or a permanent representative;

The GSIS General Manager or a permanent representative;

The Vice Chairperson for the basic sector of the National Anti-Poverty Commission or a permanent representative;

The Chairperson of the Civil Service Commission (CSC) or a permanent representative;

A permanent representative of Filipino migrant workers;

A permanent representative of the members in the informal economy;

A permanent representative of the members in the formal economy;

A representative of employers;

A representative of health care providers to be endorsed by their national associations of health care institutions and medical health professionals;

A permanent representative of the elected local chief executives to be endorsed by the League of Provinces, League of Cities and League of Municipalities; and

An independent director to be appointed by the Monetary Board.

The Secretary of Health shall be the ex officio Chairperson while the President and CEO of the Corporation shall be the Vice Chairperson of the Board.

(b) Appointment and Tenure. — Except for ex officio members, the other members of the Board shall be appointed by the President of the Philippines in accordance with the provisions of Republic Act No. 10149, otherwise known as the 'GOCC Governance Act of 2011': Provided, That sectoral board members shall be appointed by the President of the Philippines upon the recommendation of the Chairperson and after due consultations with the sectors concerned.

The term of office of the appointive members of the Board shall be in accordance with Republic Act No. 10149.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

c) Meetings and Quorum. — The Board shall hold regular meetings at least once a month. Special meetings may be convened at the call of the Chairperson or by a majority of the members of the Board. The presence of a majority of all the members shall constitute a quorum. In the absence of the Chairperson and Vice Chairperson, a temporary presiding officer shall be designated by the majority of the quorum.

d) Allowances and Per Diems — The members of the Board shall receive a per diem for every meeting actually attended subject to the pertinent budgetary laws, rules and regulations on compensation, honoraria and allowances. (Amendment to R.A. No. 7875, Republic Act No. 9241, [February 10, 2004])

SECTION 19. The President of the Corporation. —

a) Appointment and Tenure — The President of the Philippines shall appoint the President and CEO of the Corporation, hereinafter referred to as the President, upon the recommendation of the Board. The President shall have a tenure of one (1) year in accordance with the provisions of Republic Act No. 10149. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

b) Duties and Functions — The President shall have the duty of advising the Board and carrying into effect its policies and decisions. His functions are as follows:

1) to act as the chief executive officer of the Corporation; and

2) to be responsible for the general conduct of the operations and management functions of the Corporation and for other duties assigned to him by the Board.

c) Qualifications — The President must a Filipino citizen and must possess adequate and appropriate training and at least five (5) years experience in the field of health care financing and corporate management.

d) Salary — The President shall receive a salary to be fixed by the Board, with the approval of the President of the Philippines, payable from the funds of the Corporation.

e) Prohibition — To avoid conflict of interest, the President must not be involved in any health care institution as owner or member of its board.

SECTION 20. Health Finance Policy Research. — Among the staff departments that will be established by the Corporation shall be the Health Finance Policy Research Department, which shall have the following duties and functions:

a) development of broad conceptual framework for implementation of the Program through a national health finance master plan to ensure sustained investments in health care, and to provide guidance for additional appropriations from the National Government;

b) conduct of researches and studies toward the development of policies necessary to ensure the viability, adequacy and responsiveness of the Program;

c) review, evaluation, and assessment of the Program's impact on the access to as well as the quality and cost of health care in the country;

d) periodic review of fees, charges, compensation rates, capitation rates, medical standards, health outcomes and satisfaction of members, benefits, and other matters pertinent to the operations of the Program;

e) comparison in the delivery, quality, use, and cost of health care services of the different Offices;

f) submission for consideration of program of quality assurance, utilization review, and technology assessment;

(g) submission of recommendations on policy and operational issues that will help the Corporation meet the objectives of this Act; and

(h) conduct of client-satisfaction surveys and research in order to assess outcomes of service rendered by health care providers.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 21. Actuary of the Corporation. — An Office of Actuary shall be created within the Corporation to conduct the necessary actuarial studies and present recommendations on insurance premium, investments and other related matters.

ARTICLE V Local Health Insurance Office

SECTION 22. Establishment. — The Corporation shall establish a Local Health Insurance Office, hereinafter referred to as the Office, in every province or chartered city, or wherever it is deemed practicable, to bring its services closer to members of the Program. However, one office may serve the needs of more than one province or city when the merged operations will result in lower administrative cost and greater cross-subsidy between rich and poor localities.

Provinces and cities where prospective members are organized shall receive priority in the establishment of local health insurance offices.

SECTION 23. Functions. — Each Office shall have the following powers and functions:

a) to consult and coordinate, as needed, with the local government units within its jurisdiction in the implementation of the Program;

b) to recruit and register members of the Program from all areas within its jurisdiction;

c) to collect and receive premiums and other payment contributions to the Program;

d) to maintain and update the membership eligibility list at community levels;

e) to supervise the conduct of means testing which shall be based on the criteria set by the Corporation and undertaken by the Barangay Captain in coordination with the social welfare officer and community-based health care organizations to determine the economic status of all households and individuals, including those who are indigent;

f) to issue health insurance ID cards to persons whose premiums have been paid according to the requirements of the Office and the guidelines issued by the Board;

g) to recommend to the Board premium schedules that provide for lower rates to be paid by members whose dependents include those with reduced probability of utilization, as in fully immunized children;

h) to recommend to the Board a contribution schedule which specifies contribution levels by individuals and households, and a corresponding uniform package of personal health service benefits which is at least equal to the minimum package of such benefits prescribed by the Board as applying to the nation;

i) to grant or deny accreditation to health care providers in their area of jurisdiction, subject to the rules and regulations to be issued by the Board;

j) to process, review and pay the claims of providers, within a period not exceeding sixty (60) days whenever applicable in accordance with the rules and guidelines of the Corporation;

k) to pay fees, as necessary, for claims review and processing when such are conducted by the central office of the Corporation or by any of its contractors;

l) to establish referral systems and network arrangements with other Offices, as may be necessary and following the guidelines set by the Corporation;

m) to establish mechanisms by which private and public sector health facilities and human resources may be shared in the interest of optimizing the use of health resources;

n) to support the management information system requirements of the Corporation;

o) to serve as the first level for appeals and grievance cases;

p) to tap community-based volunteer health workers and barangay officials, if necessary, for member recruitment, premium collection and similar activities, and to grant such workers incentives according to the guidelines set by the Corporation and in accordance with applicable laws. However, the incentives for the barangay officials shall accrue to the barangay and not to the said officials.

q) to participate in information and education activities that are consistent with the government's priority programs on disease prevention and health promotion; and

r) to prepare an annual report according to guidelines set by the Board and to submit the same to the central office of the Corporation.

ARTICLE VI The National Health Insurance Fund

SECTION 24. Creation of the National Health Insurance Fund. — There is hereby created a National Health Insurance Fund, hereinafter referred to as the Fund, that shall consist of:

(a) Contribution from Program members;

(b) Other appropriations earmarked by the national and local governments purposely for the implementation of the Program;

(c) Subsequent appropriations provided for under Sections 46 and 47 of this Act;

(d) Donations and grants-in-aid; and

(e) All accruals thereof.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 25. Components of the National Health Insurance Fund. — The National Health Insurance Fund shall have the following components:

a) The Basic Benefit Fund. — This Fund shall finance the availment of the basic minimum benefit package by eligible beneficiaries. All liabilities associated with the extension of entitlement to the basic minimum benefit package to the enrolled population shall be borne by the basic benefit fund. It shall be constituted and maintained through the following process:

1) upon the determination of the amount of government subsidies and donations available for paying fully or partially the premium of indigent beneficiaries, a basic minimum benefit package affordable for enrolling as many of the indigent beneficiaries as possible shall be defined. The government subsidies will then be constituted as premium payments for enrolled indigents and contributed into the basic benefit fund.

2) for extending coverage of this same minimum benefit package to non-indigents who are not members of Medicare, premium prices for specific population shall be actuarially determined based on variations in risk, capacity to pay, and projected costs of services utilized. The amounts corresponding to the premium required, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves, for extending the coverage of the basic minimum benefit package for such population groups shall be contributed into the basic benefit fund.

3) for the population enrolled through Medicare Program I under SSS, the corresponding premium for the basic minimum benefit package, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves, shall be charged to the health insurance fund of the SSS and paid into the basic benefit fund;

4) for the population enrolled through Medicare Program I under GSIS, the corresponding premium for the basic minimum benefit package, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves, shall be charged to the health insurance fund of the GSIS and paid into the basic benefit fund; and,

5) for groups enrolled through any of the existing or future health insurance schemes and plans, including those created under Medicare Programs II and those organized by local government units, national agencies, cooperatives, and other similar organizations, the corresponding premium, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves, for extending the basic minimum benefit package to their respective enrollees will be charged to their respective funds and paid into the basic benefit fund.

b) Supplementary Benefit Funds. — These are separate and distinct supplementary benefit funds created by the Corporation as eligible for use to provide supplementary coverage to various groups of the population enjoying the basic benefit coverage as are affordable by their respective funding sources. Each supplementary benefit fund shall finance the extension and availment of additional benefits not included in the basic minimum benefit package but approved by the Board. Such supplementary benefits shall be financed by whatever amounts are available after deducting the costs of providing the basic minimum benefit package, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves. All liabilities associated with the extension of supplementary benefits to the defined group of enrollees shall be borne exclusively by the respective supplementary benefit fund. Upon the implementation of this Act, the following supplementary benefit funds shall be established:

1) supplementary benefit fund for SSS-Medicare members and beneficiaries. After deducting the amount corresponding to the premium of the basic minimum benefit package, the balance of the SSS-Health Insurance Fund (HIF) shall be constituted into a supplementary benefit fund to finance the extension of benefits in addition to the minimum basic package to SSS members and beneficiaries; and

2) supplementary benefit fund for GSIS-Medicare members and beneficiaries. After deducting the amount corresponding to the premium for the basic minimum benefit package, the balance of the GSIS-HIF plus the arrearages of the Government of the Philippines with the GSIS for the said HIF shall be constituted into a supplementary benefit fund to finance the extension of benefits in addition to the minimum basic package to GSIS members and beneficiaries.

In accordance with the principles of equity and social solidarity, as enunciated in Section 2 of this Act, the above supplementary benefit funds shall be maintained for not more than five (5) years, after which, such funds shall be merged into the basic benefit fund.

SECTION 26. Financial Management. — The use, disposition, investment, disbursement, administration and management of the National Health Insurance Fund, including any subsidy, grant or donation received for program operations shall be governed by applicable laws and in the absence thereof, existing resolutions of the Board of Directors of the Corporation, subject to the following limitations:

(a) All funds under the management and control of the Corporation shall be subject to all rules and regulations applicable to public funds.

(b) The Corporation is authorized to charge to the various funds under its control the costs of administering the Program. Such costs may include administration, monitoring, marketing and promotion, research and development, audit and evaluation, information services, and other necessary activities for the effective management of the Program. The total annual costs for these shall not exceed the sum total of the following:

(1) Four percent (4%) of the total premium contributions collected during the immediately preceding year;

(2) Four percent (4%) of the total reimbursements or total cost of health services paid by the Corporation in the immediately preceding year; and

(3) Five percent (5%) of the investment earnings generated during the immediately preceding year.

The period for implementation of the cost ceiling provided under this section shall not be later than five (5) years from the effectivity of this Act during which period, the total annual cost shall not exceed the sum total of the following:

(i) Five percent (5%) of the total contributions;

(ii) Five percent (5%) of the total reimbursements; and

(iii) Five percent (5%) of the investment earnings generated during the immediately preceding year.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 27. Reserve Fund. — The Corporation shall set aside a portion of its accumulated revenues not needed to meet the cost of the current year's expenditures as reserve funds:Provided, That the total amount of reserves shall not exceed a ceiling equivalent to the amount actuarially estimated for two (2) years' projected Program expenditures: Provided, further, That whenever actual reserves exceed the required ceiling at the end of the Corporation's fiscal year, the excess of the Corporation's reserve fund shall be used to increase the Program's benefits, decrease the member's contributions, and augment the health facilities enhancement program of the DOH.

The remaining portion of the reserve fund that are not needed to meet the current expenditure obligations or used for the abovementioned programs shall be placed in investments to earn an average annual income at prevailing rates of interest and shall be known as the 'Investment Reserve Fund' which shall be invested in any or all of the following:

(a) In interest-bearing bonds, securities or other evidences of indebtedness of the Government of the Philippines, or in bonds, securities, promissory notes and other evidences of indebtedness to which full faith and credit and unconditional guarantee of the Republic of the Philippines is pledged;

(b) In debt securities and corporate bonds issuances: Provided, That such securities and bonds are rated triple 'A' by authorized accredited domestic rating agencies: Provided, further, That the issuing or assuming entity or its predecessor shall not have defaulted in the payment of interest on any of its securities and that during each of any three (3) including last two (2) of the five (5) fiscal years next preceding the date of acquisition by the Corporation of such bonds, securities or other evidences of indebtedness, the net earnings of the issuing or assuming institution available for its recurring expenses, such as amortization of debt discount and rentals for leased properties, including interest on funded and unfunded debt, shall have been not less than one and one quarter (1 1/4) times the total of the recurring expenses for such year: Provided, further, That such investment shall not exceed fifteen percent (15%) of the investment reserve fund;

(c) In interest-bearing deposits and loans to or securities in any domestic bank doing business in the Philippines: Provided, That in the case of such deposits, this shall not exceed at any time the unimpaired capital and surplus or total private deposits of the depository bank, whichever is smaller: Provided, further, That said bank shall first have been designated as a depository for this purpose by the Monetary Board of the Bangko Sentral ng Pilipinas;

(d) In preferred stocks of any solvent corporation or institution created or existing under the laws of the Philippines: Provided, That the issuing, assuming, or guaranteeing entity or its predecessor has paid regular dividends upon its preferred or guaranteed stocks for a period of at least three (3) years immediately preceding the date of investment in such preferred or guaranteed stocks: Provided, further, That if the stocks are guaranteed the amount of stocks so guaranteed is not in excess of fifty percent (50%) of the amount of the preferred common stocks as the case may be of the issuing corporation: Provided, furthermore, That if the corporation or institution has not paid dividends upon its preferred stocks, the corporation or institution has sufficient retained earnings to declare dividends for at least two (2) years on such preferred stocks and in common stocks of any solvent corporation or institution created or existing under the laws of the Philippines in the stock exchange with proven track record of profitability and payment of dividends over the last three (3) years; and

(e) In bonds, securities, promissory notes or other evidences of indebtedness of accredited and financially sound medical institutions exclusively to finance the construction, improvement and maintenance of hospitals and other medical facilities: Provided, That such securities and instruments are backed up by the guarantee of the Republic of the Philippines or the issuing medical institution and the issued securities and bonds are both rated triple 'A' by authorized accredited domestic rating agencies: Provided, further, That said investments shall not exceed ten percent (10%) of the total investment reserve fund.

As part of its investments operations, the Corporation may hire institutions with valid trust licenses as its external local fund managers to manage the investment reserve fund, as it may deem appropriate, through public bidding. The fund managers shall submit annual reports on investment performance to the Corporation.

The Corporation shall set up the following funds:

(1) A fund to secure benefit payouts to members prior to their becoming lifetime members;

(2) A fund to secure payouts to lifetime members; and

(3) A fund for any optional supplemental benefits that are subject to additional contributions.

A portion of each of the above funds shall be identified as current and kept in liquid instruments. In no case shall said portion be considered part of invested assets.

Another portion of the said funds shall be allocated for lifetime members within six (6) months after the effectivity of this Act. Said amount shall be determined by an actuary or pre-calculated based on the most recent valuation of liabilities.

The Corporation shall allocate a portion of all contributions to the fund for lifetime members based on an allocation to be determined by the PHIC actuary based on a pre-determined percentage using the current average age of members and the current life expectancy and morbidity curve of Filipinos.

The Corporation shall manage the supplemental benefits and the lifetime members' fund in an actuarially sound manner.

The Corporation shall manage the supplemental benefits fund to the minimum required to ensure that the supplemental benefit payments are secure.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

ARTICLE VII Financing

SECTION 28. Contributions. — All members who can afford to pay shall contribute to the Fund, in accordance with a reasonable, equitable and progressive contribution schedule to be determined by the Corporation on the basis of applicable actuarial studies and in accordance with the following guidelines:

(a) Members in the formal economy and their employers shall continue paying the same monthly contributions as provided for by law until such time that the Corporation shall have determined a new contribution schedule: Provided, That their monthly contributions shall not exceed five percent (5%) of their respective monthly salaries. AcEIHC

It shall be mandatory for all government agencies to include the payment of premium contribution in their respective annual appropriations: Provided, further, That any increase in the premium contribution of the national government as employer shall only become effective upon inclusion of said amount in the annual General Appropriations Act.

(b)Contributions from members in the informal economy shall be based primarily on household earnings and assets. Those from the lowest income segment who do not qualify for full subsidy under the means test rule of the DSWD shall be entirely subsidized by the LGUs or through cost sharing mechanisms between/among LGUs and/or legislative sponsors and/or other sponsors and/or the member, including the national government: Provided, That the identification of beneficiaries who shall receive subsidy from LGUs shall be based on a list to be provided by the DSWD through the same means test rule or any other appropriate statistical method that may be adopted for said purpose.

(c) Contributions made in behalf of indigent members shall not exceed the minimum contributions for employed members.

(d) The required number of monthly premium contributions to qualify as a lifetime member may be increased by the Corporation to sustain the financial viability of the Program: Provided, That the increase shall be based on actuarial estimate and study

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 29. Payment for Indigent Contributions. — Premium contributions for indigent members as identified by the DSWD through a means test or any other appropriate statistical method shall be fully subsidized by the national government. The amount necessary shall be included in the appropriations for the DOH under the annual General Appropriations Act. (Amendment to R.A. No. 7875, Republic Act No. 9241, [February 10, 2004], as further amended by National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 29-A. Payment for Sponsored Members' Contributions. —

(a) The premium contributions of orphans, abandoned and abused minors, out-of-school youths, street children, PWDs, senior citizens and battered women under the care of the DSWD, or any of its accredited institutions run by NGOs or any nonprofit private organizations, shall be paid by the DSWD and the funds necessary for their inclusion in the Program shall be included in the annual budget of the DSWD.

(b) The needed premium contributions of all barangay health workers, nutrition scholars and other barangay workers and volunteers shall be fully borne by the LGUs concerned.

(c) The annual premium contributions of househelpers shall be fully paid by their employers, in accordance with the provisions of Republic Act No. 10361 or the 'Kasambahay Law'.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 29-B. Coverage of Women About to Give Birth. — The annual required premium for the coverage of unenrolled women who are about to give birth shall be fully borne by the national government and/or LGUs and/or legislative sponsor which shall be determined through the means testing protocol recognized by the DSWD. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

ARTICLE VIII Health Care Providers

SECTION 30. Free Choice of Health Facility, Medical or Dental Practitioner. — Beneficiaries requiring treatment or confinement shall be free to choose from accredited health care providers. Such choice shall, however, be subject to limitations based on the area of jurisdiction of the concerned Office and on the appropriateness of treatment in the facility chosen or by the desired provider.

SECTION 31. Authority to Grant Accreditation. — The Corporation shall have the authority to grant to health care providers accreditation which confers the privilege of participating in the Program.

SECTION 32. Accreditation Eligibility. — All health care providers, as enumerated in Section 4(o) hereof and operating for at least three (3) years may apply for accreditation: Provided, That a health care provider which has not operated for at least three (3) years may likewise apply and qualify for accreditation if it complies with all the other accreditation requirements of and further meets any of the following conditions:

(a) Its managing health care professional has had a working experience in another accredited health care institution for at least three (3) years;

(b) It operates as a tertiary facility or its equivalent;

(c) It operates in a LGU where the accredited health care provider cannot adequately or fully service its population; and

(d) Other conditions as may be determined by the Corporation.

A health care provider found guilty of any violation of this Act shall not be eligible to apply for the renewal of accreditation.

(Amendment to R.A. No. 7875, Republic Act No. 9241, [February 10, 2004], further amended by National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 33. Minimum Requirements for Accreditation. — The minimum accreditation requirements for health care providers are as follows:

a) human resource, equipment and physical structure in conformity with the standards of the relevant facility, as determined by the Department of Health;

b) acceptance of formal program of quality assurance and utilization review;

c) acceptance of the payment mechanisms specified in the following section;

d) adoption of referral protocols and health resources sharing arrangements;

e) recognition of the rights of patients; and

f) acceptance of information system requirements and regular transfer of information.

SECTION 34. Provider Payment Mechanisms. — The following mechanisms for public and private providers shall he allowed in the Program:

(a) Fee-for-service payments — payments made by the Corporation for professional fees or hospital charges, or both, based on arrangements with health care providers. This fee shall be based on a schedule to be established by the Board which shall be reviewed periodically but hot less than every three (3) years;

(b) Capitation of health care professionals and facilities, or networks of the same including HMOs, medical cooperatives, and other legally formed health service groups;

(c) Case-based payment;

(d) Global budget; and

(e) Such other provider payment mechanisms that may be determined and adopted by the Corporation.

Subject to the approval of the Board, the Corporation may adopt other payment mechanism that are most beneficial to the members and the Corporation.

Each PhilHealth local office shall recommend the appropriate payment mechanism within its jurisdiction for approval by the Corporation. Special consideration shall be given to payment for services rendered by public and private health care providers serving remote or medically underserved areas.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 34-A. Other Provider Payment Guidelines. — No other fee or expense shall be charged to the indigent patient, subject to the guidelines issued by the Corporation.

All payments for professional services rendered by salaried public providers shall be allowed to be retained by the health facility in which services are rendered and be pooled and distributed among health personnel. Charges paid to public facilities shall be retained by the individual facility in which services were rendered and for which payment was made. Such revenues shall be used to primarily defray operating costs other than salaries, to maintain or upgrade equipment, plant or facility, and to maintain or improve the quality of service in the public sector.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 35. Fee-for-service Payments and Payments in General. — Fee-for-service payments may be made separately for professional fees and hospital charges, or both, based on arrangements with health care providers. This fee shall be based on a schedule to be established by the Board which shall be reviewed every three (3) years. Fees paid for professional services rendered by salaried public providers shall be allowed to be retained by the health facility in which services are rendered and be pooled and distributed among health personnel. Charges paid to public facilities shall be allowed to be retained by the individual facility in which services were rendered and for which payment was made. Such revenues shall be used to defray operating costs other than salaries, to maintain or upgrade equipment, plant or facility, and to maintain or improve the quality of service in the public sector.

SECTION 36. Role of Local Government Units (LGUs). — Consistent with the mandates for each political subdivision under Republic Act No. 7160 or 'The Local Government Code of 1991', LGUs shall provide basic health care services.

To augment their funds, LGUs shall invest the capitation payments given to them by the Corporation on health infrastructures or equipment, professional fees, drugs and supplies, or information technology and database: Provided, That basic health care services, as defined by the DOH and the Corporation, shall be ensured especially with the end in view of improving maternal, infant and child health: Provided, further, That the capitation payments shall be segregated and placed into a special trust fund created by LGUs and be accessed for the use of such mandated purpose.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 37. Quality Assurance. — Under the guidelines approved by the Corporation and in collaboration with their respective Offices, health care providers shall take part in programs of quality assurance, utilization review, and technology assessment that have the following objectives:

a) to ensure that the quality of personal health services delivered, measured in terms of inputs, process, and outcomes, are of reasonable quality in the context of the Philippines over time;

b) to ensure that the health care standards are uniform within the Office's jurisdiction and eventually throughout the nation; and

c) to see to it that the acquisition and use of scarce and expensive medical technologies and equipment are consistent with actual needs and standards of medical practice, and that:

1) the performance of medical procedures and the administration of drugs are appropriate, necessary and unquestionably consistent with accepted standards of medical practice and ethics. Drugs for which payments will be made shall be those included in the Philippine National Drug Formulary, unless explicit exception is granted by the Corporation.

2) the performance of medical procedures and the administration of drugs are appropriate, consistent with accepted standards of medical practice and ethics, and respectful of the local culture.

SECTION 38. Safeguards Against Over and Under Utilization. — It is incumbent upon the Corporation to set up a monitoring mechanism to be operationalized through a contract with health care providers to ensure that there are safeguards against:

a) over-utilization of services;

b) unnecessary diagnostic and therapeutic procedures and intervention;

c) irrational medication and prescriptions;

d) under-utilization of services; and

e) inappropriate referral practices.

The Corporation may deny or reduce the payment for claims when such claims are attended by false or incorrect information and when the claimants fails without justifiable cause to comply with the pertinent rules and regulations of this Act.

ARTICLE IX Grievance and Appeal

SECTION 39. Grievance System. — A system of grievance is hereby established, wherein members, dependents, or health care providers of the Program who believe they have been aggrieved by any decision of the implementors of the Program, may seek redress of the grievance in accordance with the provisions of this Article.

SECTION 40. Grounds for Grievances. — The following acts shall constitute valid grounds for grievance action:

a) any violation of the rights of patients;

b) a willful neglect of duties of Program implementors that results in the loss or non-enjoyment of benefits by members or their dependents;

c) unjustifiable delay in actions on claims;

d) delay in the processing of claims that extends beyond the period agreed upon; and

e) any other act or neglect that tends to undermine or defeat the purposes of this Act.

SECTION 41. Grievance and Appeal Procedures. — A member, a dependent, or a health care provider may file a complaint for grievance based on any of the above grounds, in accordance with the following procedures:

(a) A complaint for grievance must be filed with the Corporation which shall refer such complaint to the Grievance and Appeal Review Committee. The Grievance and Appeal Review Committee shall rule on the complaint through a notice of resolution within sixty (60) calendar days from receipt thereof.

(b) Appeals from the decision of the Grievance and Appeal Review Committee must be filed with the Board within thirty (30) calendar days from receipt of the notice of resolution.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

c) The Offices shall have no jurisdiction over any issue involving the suspension or revocation of accreditation, the imposition of fines, or the imposition of charges on members or their dependents in case of revocation of their entitlement.

d) All decisions by the Board as to entitlement to benefits of members or to payments of health care providers shall be considered final and executory.

SECTION 42. Grievance and Appeal Review Committee. — The Board shall create a Grievance and Appeal Review Committee, composed of five (5) members, hereinafter referred to as the Committee, which, subject to the procedures enumerated above, shall receive and recommend appropriate action on complaints from members and health care providers relative to this Act and its implementing rules and regulations.

The Committee shall have as one of its members a representative of any of the accredited health care providers as endorsed by the DOH.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 43. Hearing Procedures of the Committee. — Upon the filing of the complaint, the Grievance and Appeal Review Committee, from a consideration of the allegations thereof, may dismiss the case outright due to lack of verification, failure to state the cause of action, or any other valid ground for the dismissal of the complaint after consultation with the Board; or require the respondent to file a verified answer within five (5) days from service of summons.

Should the defendant fail to answer the complaint within the reglementary five-day period herein provided, the Committee, motu proprio or upon motion of the complainant, shall render judgments as may be warranted by the facts alleged in the complainant and limited to what is prayed for therein.

After an answer is filed and the issues are joined, the Committee shall require the parties to submit, within ten (10) days from receipt of the order, the affidavits of witnesses and other evidence on the factual issues defined therein, together with a brief statement of their positions setting forth the law and the facts relied upon by them. In the event the Committee finds, upon consideration of the pleadings, the affidavits and other evidence, and position statements submitted by the parties, that a judgment may be rendered thereon without need of a formal hearing, it may proceed to render judgment not later than ten (10) days from the submission of the position statements of the parties.

In cases where the Committee deems it necessary to hold a hearing to clarify specific factual matters before rendering judgment, it shall set the case for hearing for the purpose. At such hearing, witnesses whose affidavits were previously submitted may be asked clarificatory questions by the proponent and by the Committee and may be cross-examined by the adverse party. The order setting the case of hearing shall specify the witnesses who will be called to testify, and the matters on which their examination will deal. The hearing shall be terminated within fifteen (15) days, and the case decided by the Committee within fifteen (15) days from such termination.

The decision of the Committee shall become final and executory fifteen (15) days after notice thereof: Provided, however, That it is appealable to the Board by filing the appellant's memorandum of appeal within fifteen (15) days from receipt of the copy of the judgment appealed from. The appellees shall be given fifteen (15) days from notice to file the appellee's memorandum after which the Board shall decide the appeal within thirty (30) days from the submittal of the said pleadings.

The decision of the Board shall also become final and executory fifteen (15) days after notice thereof: Provided, however, That it is reviewable by the Supreme Court on purely questions of law in accordance with the Rules of Court.

The Committee and the Board, in the exercise of their quasi-judicial function, as specified in Section 17 hereof, can administer oaths, certify to official acts and issue subpoena to compel the attendance and testimony of witnesses, and subpoena duces tecum or ad testificandum to enjoin the production of books, papers and other records and to testify therein on any question arising out of this Act. Any case of contumacy shall be dealt with in accordance with the provisions of the Revised Administrative Code and the Rules of Court. The Board or the Committee, as the case may be, shall prescribe the necessary administrative sanctions such as fines, warnings, suspension or revocation of the right to participate in the Program.

In all its proceedings, the Committee and the Board shall not be bound by the technical rules of evidence: Provided, however, That the Rules of Court shall apply with suppletory effect.

ARTICLE X Penalties

SECTION 44. Penal Provisions. — Any violation of the provisions of this Act, after due notice and hearing, shall suffer the following penalties:

(a) Violation by an Accredited Health Care Provider — Any accredited health care provider who commits a violation, abuse, unethical practice or fraudulent act which tends to undermine or defeat the objectives of the Program shall be punished with a fine of not less than Fifty thousand pesos (P50,000.00) but not more than One hundred thousand pesos (P100,000.00) or suspension of accreditation from three (3) months to the whole term of accreditation, or both, at the discretion of the Corporation: Provided, That recidivists may no longer be accredited as a participant of the Program;

(b) Violations of a Member — Any member who commits any violation of this Act independently or in connivance with the health care provider for purposes of wrongfully claiming NHIP benefits or entitlement shall be punished with a fine of not less than Five thousand pesos (P5,000.00) or suspension from availment of NHIP benefits for not less than three (3) months but not more than six (6) months, or both, at the discretion of the Corporation.

(c) Violations of an Employer —

(1) Failure/Refusal to Register/Deduct/Remit the Contributions — Any employer who fails or refuses to register employees, regardless of their employment status, or to deduct contributions from the employee's compensation or remit the same to the Corporation shall be punished with a fine of not less than Five thousand pesos (P5,000.00) multiplied by the total number of employees of the firm.

Any employer or any officer authorized to collect contributions under this Act who, after collecting or deducting the monthly contributions from his employee's compensation, fails to remit the said contributions to the Corporation within thirty (30) days from the date they become due shall be presumed to have misappropriated such contributions.

(2) Unlawful Deductions — Any employer or officer who shall deduct directly or indirectly from the compensation of the covered employees or otherwise recover from them his own contribution on behalf of such employees shall be punished with a fine of Five thousand pesos (P5,000.00) multiplied by the total number of affected employees.

If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing directors or partners or president or general manager, or other persons responsible for the commission of the said act shall be liable for the penalties provided for in this Act.

(3) Misappropriation of Funds by Employees of the Corporation — Any employee of the Corporation who receives or keeps funds or property belonging, payable or deliverable to the Corporation, and who shall appropriate the same, or shall take or misappropriate or shall consent, or through abandonment or negligence shall permit any other person to take such property or funds wholly or partially, shall likewise be liable for misappropriation of funds or property and shall be punished with a fine not less than Ten thousand pesos (P10,000.00) nor more than Twenty thousand pesos (P20,000.00). Any shortage of the funds or loss of the property upon audit shall be deemed prima facie evidence of the offense.

(d) Other Violations — Other violations of the provisions of this Act or of the rules and regulations promulgated by the Corporation shall be punished with a fine of not less than Five thousand pesos (P5,000.00) but not more than Twenty thousand pesos (P20,000.00).

All other violations involving funds of the Corporation shall be governed by the applicable provisions of the Revised Penal Code or other laws, taking into consideration the rules on collection, remittances, and investment of funds as may be promulgated by the Corporation.

The Corporation may enumerate circumstances that will mitigate or aggravate the liability of the offender or erring health care provider, member or employer.

Despite the cessation of operation by a health care provider or termination of practice of an independent health care professional while the complaint is being heard, the proceeding against them shall continue until the resolution of the case.

The dispositive part of the decision requiring payment of fines, reimbursement of paid claim or denial of payment shall be immediately executory.

(National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

ARTICLE XI Appropriations

SECTION 45. Initial Appropriation. — The unexpended portion of the budget of the Philippine Medical Care Commission (PMCC) for the year during which this Act was approved shall be utilized for establishing the Corporation and initiating its operations, including the formulation of the rules and regulations necessary for the implementation of this Act. In addition, initial funding shall come from any unappropriated but available fund of the Government.

SECTION 46. Subsequent Appropriations. — Starting 1995 and thereafter, twenty-five percent (25%) of the increment in total revenue collected under Republic Act No. 7654 shall be appropriated in the General Appropriations Act solely for the National Health Insurance Fund.

In addition, starting 1996 and thereafter, twenty-five percent (25%) of the incremental revenue from the increase in the documentary stamp taxes under Republic Act No. 7660 shall likewise be appropriated solely for the said fund.

SECTION 47. Additional Appropriations. — The Corporation may request Congress to appropriate supplemental funding to meet targeted milestones of the Program in accordance with Section 10(d) of this Act.

ARTICLE XII Transitory Provisions

SECTION 48. Appointment of Board Members. — Within thirty (30) days from the date of effectivity of this Act, the President of the Philippines shall appoint the members of the Board and the President of the Corporation.

SECTION 49. Implementing Rules and Regulations. — Within sixty (60) days from the effectivity of this Act, the Corporation, in coordination with the DOH, shall issue the necessary rules and regulations for its effective implementation. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 50. Promulgation. — Within one (1) year from its initial meeting, the Board shall promulgate the aforementioned rules and regulations in at least two (2) national newspapers of general circulation. But until such time that the Corporation shall have promulgated said rules and regulations, the existing rules and regulations of the PMCC shall be followed. The present Medicare Program shall continue to be so administered, until the Corporation's Board deems the new system as ready for implementation in accordance with the provisions of this Act.

SECTION 51. Merger. — Within sixty (60) days from the promulgation of the implementing rules and regulations, all functions and assets of the Philippine Medical Care Commission shall be merged with those of the Corporation without need of conveyance, transfer or assignment. The PMCC shall thereafter cease to exist.

The liabilities of the PMCC shall be treated in accordance with existing laws and pertinent rules and regulations.

To the greatest extent possible and in accordance with existing laws, all employees of the PMCC shall be absorbed by the Corporation.

SECTION 52. Transfer of Health Insurance Funds of the SSS and GSIS . — The Health Insurance Funds being administered by the SSS and GSIS shall be transferred to the Corporation within sixty (60) days from the promulgation of the implementing rules and regulations. The SSS and GSIS shall, however, continue to perform Medicare functions under contract with the Corporation until such time that such functions are assumed by the Corporation, in accordance with the following Section.

SECTION 53. Transfer of the Medicare Functions of the SSS and GSIS . — Within five (5) years from the promulgation of the implementing rules and regulations, the functions, assets, equipment, records, operating systems, and liabilities, if any, of the Medicare operations of the SSS and GSIS shall be transferred to the Corporation;Provided, however, That the SSS and GSIS shall continue performing its Medicare functions beyond the stipulated five-year period if such extension will benefit Program members, as determined by the Corporation.

Personnel of the Medicare departments of the SSS and GSIS shall be given priority in the hiring of the Corporation's employees.

ARTICLE XIII Miscellaneous Provisions

SECTION 54. Oversight Provision. — There is hereby created a Joint Congressional Oversight Committee to conduct a regular review of the NHIP which shall entail a systematic evaluation of the Program's performance, impact or accomplishments with respect to its objectives or goals. The Oversight Committee shall be composed of five (5) members from the Senate and five (5) members from the House of Representatives to be appointed by the Senate President and the Speaker of the House of Representatives, respectively. The Oversight Committee shall be jointly chaired by the Chairpersons of the Senate Committee on Health and Demography and the House of Representatives Committee on Health.

The National Economic and Development Authority, in coordination with the National Statistics Office and the National Institutes of Health of the University of the Philippines shall undertake studies to validate the accomplishments of the Program. Such validation studies shall include an assessment of the enrollees' satisfaction of the benefit package and services provided by the Corporation. These validation studies, as well as an annual report on the performance of the Corporation, shall be submitted to the Congressional Oversight Committee.

The Corporation shall annually transfer 0.001% of its income in the previous year for the purpose of conducting these studies.

(Amendment to R.A. No. 7875, Republic Act No. 9241, [February 10, 2004], further amended by National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 55. Information Campaign. — There shall be provided a substantial period of time to undertake an intensive public information campaign prior to the implementation of the rules and regulations of this Act.

SECTION 56. Requisites for Issuance or Renewal of License or Permits. — Notwithstanding any law to the contrary, all government agencies issuing professional or business license or permit, shall require all applicants to submit certificate or proof of payment of PhilHealth premium contributions, prior to the issuance or renewal of such license or permit. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

SECTION 57. Separability Clause. — In the event any provision of this Act or the application of such provision to any person or circumstances is declared invalid, the remainder of this Act or the application of said provisions to other persons or circumstances shall not be affected by such declaration.

SECTION 58. Repealing Clause. — Executive Order 119, Presidential Decree 1519 and other laws currently applying to the administration of Medicare are hereby repealed. All other laws, executive orders, administrative rules and regulations or parts thereof which are inconsistent with the provisions of this Act also hereby amended, modified, or repealed accordingly.

SECTION 59. Government Guarantee. — The Government of the Philippines guarantees the financial viability of the Program.

SECTION 60. Effectivity. — This Act shall take effect fifteen (15) days after its publication in at least three (3) national newspapers of general circulation.

Approved: February 14, 1995

Published in the Philippine Times Journal, Malaya and the Manila Times on February 18, 1995.

(National Health Insurance Act of 1995, Republic Act No. 7875, [February 14, 1995])