41 hospitals in CV to pilot PhilHealth's new payment system

CEBU, Philippines — At least 41 hospitals and health facilities in Central Visayas have joined Philippine Health Insurance Corporation (PhilHealth)’s pilot implementation of a new payment system that will no longer be on a fixed case rate but based on the complexity of a patient’s illness.

PhilHealth is now preparing healthcare facilities for the shift from the current All Case Rates (ACR) payment mechanism to the Diagnosis-Related Groups (DRG) payment system as part of the government’s health financing reforms under the Universal Health Care (UHC) Act.

In a statement, PhilHealth-7 said that under the DRG system, inpatient cases will be classified according to diagnosis, treatment, procedures performed, age, sex, and length of hospital stay.

Unlike the existing ACR scheme, which reimburses hospitals based on a fixed case rate covering up to two diagnosis or procedure codes, the DRG system considers the full complexity of a patient’s condition and the actual resources required for treatment.

This new payment mechanism is expected to result in more accurate hospital reimbursements while promoting a more patient-centered healthcare system.

To prepare healthcare providers for the transition, PhilHealth-7 has been conducting orientation sessions and capacity-building activities for hospitals, infirmaries, and primary care facilities across Cebu, Bohol, Negros Oriental, and Siquijor.

The regional office also began implementing “Shadow Billing” in 2024, a simulation process that allows hospitals to generate hypothetical DRG claims while continuing to receive reimbursements under the existing ACR system.

PhilHealth-7 said the exercise enables the agency to collect data needed to develop DRG payment rates, refine patient classifications, and test systems for future electronic claims processing.

It also allows participating hospitals to familiarize themselves with the new requirements before the DRG system is fully rolled out.

Participation in Shadow Billing is mandatory for healthcare facilities that admit inpatients and those who are capable of submitting claims through PhilHealth’s Electronic Claims (eClaims) system.

As of July 29, 2026, PhilHealth-7 has designated 41 health facilities in Central Visayas as Shadow Billing Sites.

Among the private hospitals participating are Chong Hua Hospital, Chong Hua Hospital Mandaue, Perpetual Succour Hospital of Cebu, Cebu (Velez) General Hospital Inc., Adventist Hospital-Cebu Inc., Cardinal Rosales Memorial Hospital Inc., and Medical Mission Group Hospital and Health Services Cooperative.

Government hospitals that have joined the initiative include Vicente Sotto Memorial Medical Center, Cebu South Medical Center, Governor Celestino Gallares Memorial Medical Center, Lapu-Lapu City Hospital, Siquijor Provincial Hospital, Cebu Provincial Hospital in Balamban and Carcar City, Cebu North General Hospital Inc., and several district and community hospitals across the region. - Mitchelle L. Palaubsanon /IHM