Since 1 September 2011, the state-run health insurance organization in the Philippines, the Philippine Health Insurance Corporation (PhilHealth), began implementing case rates payment, a new payment scheme that pays health care providers a pre-determined fixed rate for each treated case regardless of hospital category and length of stay in the hospital.

The case rates payment scheme covers 11 common medical cases and 12 surgical cases. Medical cases that have pre-determined rates are dengue, pneumonia, essential hypertension, cerebral infarction, cerebrovascular accident, acute gastroenteritis, asthma, typhoid fever and new-born care. Surgical procedures covered by the new payment scheme are radiotherapy, haemodialysis, maternity care, normal spontaneous delivery, caesarean section, appendectomy, cholecystectomy, dilatation and curettage, thyroidectomy, herniorrhaphy, mastectomy, hysterectomy and cataract surgery.

Under the new scheme, a patient diagnosed and confined for typhoid fever, for example, is covered 14,000 Philippine pesos (PHP) (USD332) as a PhilHealth benefit while a patient who undergoes hysterectomy is covered PHP30,000 (USD710).

The new case rates were determined on the basis of a PhilHealth study of tariff rates, contracting rates for public and private hospitals, and average value per claims. The highest computed rates were used based on the top conditions and procedures that comprised 49 per cent of the total claims paid by PhilHealth nationwide in the recent past. The rates are inclusive of the amounts to be paid to hospital facilities and professional fees.

In addition to the case rate payments, PhilHealth is implementing a no balance billing (NBB) policy for the most common medical and surgical conditions. Under this policy, no other fees or expenses can be charges or paid for by PhilHealth members or dependents over and above the packaged rates. In instances where out-of-pocket spending is incurred for health facility costs or professional fees, reimbursements to PhilHealth members or dependents are deducted from the case payment to be paid to the health facility.

The simplicity and transparency of the new payment scheme is anticipated to benefit members, providers and PhilHealth itself. The new payment scheme is also seen to improve the turn-around time for claims processing and payments to providers, faster reimbursements for accredited providers and member, and achieve cost efficiencies for PhilHealth.

The new payment scheme is a departure from the fee-for-service scheme where providers are paid for each unit of service and hence may be prone to abuse through the provision of services in excess of what are required.

PhilHealth has a national mandate to attain universal health coverage by end-2013.

Source: http://www.pia.gov.ph; PhilHealth Circular No. 011-2011, http://www.philhealth.gov.ph

Implementation date: 09.2011