"SEC. 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;

"(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."

SEC. 12. Section 18 of the same Act is hereby further amended to read as follows:

"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 permanent representative;

a

"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.

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SEC. 13. Section 19 of the same Act is hereby amended to read as follows:

"SEC. 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.

"

SEC. 14. Section 20 of the same Act is hereby amended to read as follows:

"SEC. 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:

*

"(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."

SEC. 15. Section 24 of the same Act is hereby amended to read as follows:

"SEC. 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."

SEC. 16.Section 26 of the same Act is hereby amended to read as follows:

"SEC. 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."

SEC. 17. Section 27 of the same Act is hereby amended to read as follows:

"SEC. 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 (11/4) 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

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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."

SEC. 18. Section 28 of the same Act is hereby amended to read as follows:

"SEC. 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.

"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."

SEC. 19. Section 29 of the same Act is hereby further amended to read as follows:

"SEC. 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."

SEC. 20. A new Section 29-A shall be added to read as follows:

"SEC. 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