Republic of the Philippines

Court of Appeals
Cagayan de Oro City

SPECIAL TWENTY-THIRD DIVISION

DRAZEN COMMUNITY HOSPITAL, CA-G.R. SP NO. 07334-MIN

Petitioner,
Members:

LLOREN, J., Chairperson

*
ATAL-PAÑO &
- versus - ACOSTA, JJ.

PHILIPPINE HEALTH INSURANCE Promulgated:

CORPORATION (PHILHEALTH),
Respondent. July 13, 2017

DECISION

ACOSTA, J.:

In this Petition for Review under Rule 43 of the Rules of Court,

petitioner Drazen Community Hospital (DCH) challenges the Decision
dated 26 February 20161 of the Philippine Health Insurance
Corporation (Philhealth), Pasig City, in PHIC Case No. HCP-X-10-
307, sustaining the Decision dated 17 July 20122 of Arbiter Michael
Troy A. Polintan which found it guilty of an administrative offense
under Section 141, Rule XXVIII of the 2004 Implementing Rules and
Regulations of Republic Act No. 7875.

The facts of this controversy are simple and straightforward –

*
Vice Justice Ronaldo B. Martin, per Office Order No. 1013-2017-RVB.
1
Rollo, pp. 18-23.
2
Rollo, p. 19.
CA-G.R. SP No. 07334-MIN Page 2 of 7
Decision

On 23 March 2009, DHC filed a benefit claim relative to the

confinement of one Fabia Labastida Yap from 28 February to 3 March
2009 due to a complete diagnosis of CAP. After finding the claim to be
meritorious, Philhealth paid the same.3

On 15 October 2009, the Legal Sector Unit of Philhealth- Region

10 (LSU-Philhealth 10) conducted a domiciliary visit and interview on
Fabia. In the course of the interview, she revealed that she was not
hospitalized in 2009. She clarified that it was her son, Lloyd Van L.
Yap, who got admitted in DHC.4

Fabia’s statement triggered an investigation.5 After the end of

said investigation, Senior Prosecutor Dexter L. Navarro issued a
Resolution6 finding probable cause to institute a case against DHC.

Consequently, on 8 November 2010, the LSU-Philhealth 10 filed

a Complaint for Misrepresentation by False or Incorrect Information
and Breach of the Warranties of Accreditation7 against DHC before the
Legal Sector-Prosecution Department of Philhealth. LSU-Philhealth 10
alleged that DHC “manufactured and fabricated medical records in
order to justify the alleged confinement of” Fabia.8

In its Explanation/Evidence,9 DHC countered that “the statement

found in x x x the DOMICIALRY VISIT UNDERTAKING of Patient
Fabia L. Yap to the effect that “I was not hospitalized this year”, arose
out of pure misunderstanding and misapprehension or mistake of fact
which do not give rise to a valid cause of action”.

On 17 July 2012, Arbiter Michael Troy A. Polintan rendered a

Decision,10 disposing as follows –

WHEREFORE, premises considered, respondent

Drazen Community Hospital is hereby adjudged guilty
and liable for the administrative offense of “claims for
non-admitted patients” under Section 141, Rule XXVIII

3
Complaint, Rollo, p. 24; Petition, Rollo, p. 3.
4
Supra at p. 24; Rollo, p. 23.
5
Ibid.
6
Rollo, pp. 46-49.
7
Rollo, pp. 24-28 and pp. 75-79.
8
Rollo, p. 46.
9
Rollo, pp. 29-45 and pp. 80-99.
10
Supra note 2.
CA-G.R. SP No. 07334-MIN Page 3 of 7
Decision

of the 2004 IRR of Republic Act No. 7875, and is

accordingly meted the penalties of suspension of
accreditation for three (3) months and a fine of ten
thousand pesos (P10,000.00).

SO RESOLVED.

On appeal, Philhealth affirmed the 17 July 2012 Decision of

Arbiter Polintan,11 viz –

WHEREFORE, the Appeal of Drazen

Community Hospital is hereby DENIED for lack of
merit. The penalty of suspension of accreditation for
Three (3) months and a fine of Ten Thousand Pesos
(P10,000.00) is hereby AFFIRMED.

FURTHER, restitution for any payment made by

Philhealth for the claim/s subject of this case shall be
made by the Appellant or charged and deducted from
the proceeds of any pending or future claims of
Appellant with Philhealth. The fine imposed may
likewise be charged to the future claims of the
Appellant.

FINALLY, the Appellant is STERNLY

WARNED that a repetition of the same or similar act
shall be dealt with more severely.

SO ORDERED.12

Undeterred by the affirmance, DHC filed this Petition for

Review submitting that the “Honorable Senior Arbiter, (viz-a-viz, the
Philhealth Board of Directors who affirmed the judgment of the
former), grossly erred” –

I. IN GIVING FULL CREDENCE TO THE DVU OF

FABIA L. YAP OVER AND ABOVE HER
JUDICIAL AFFIDAVIT EXPLAINING THE
CIRCUMSTANCES BEHIND HER
MISDECLARATION THAT “I WAS NOT
HOSPITALIZED THIS YEAR.”

11
Supra note 1.
12
Id. at pp. 20-21.
CA-G.R. SP No. 07334-MIN Page 4 of 7
Decision

II. IN FINDING THE RESPONDENT GUILTY AND

LIABLE FOR THE ADMINISTRATIVE
OFFENSE OF “CLAIMS FOR NO-ADMITTED
PATIENTS” AS PENALIZED UNDER SECTION
141, RULE XXVIII OF THE IRR OF R.A. 7875,
AS AMENDED.

The Court’s Ruling

The Petition has no merit.

Nothing is more settled in this jurisdiction than the doctrine that

once a judgment had acquired finality, it becomes immutable and
unalterable. It may no longer be modified in any respect even if it is
meant to correct conclusions of fact and law.13

As elaborated in One Shipping Corp. v. Penafiel14 –

It is a hornbook rule that once a judgment has

become final and executory, it may no longer be
modified in any respect, even if the modification is
meant to correct an erroneous conclusion of fact or law,
and regardless of whether the modification is attempted
to be made by the court rendering it or by the highest
court of the land, as what remains to be done is the
purely ministerial enforcement or execution of the
judgment.

The doctrine of finality of judgment is grounded

on fundamental considerations of public policy and
sound practice that at the risk of occasional errors, the
judgment of adjudicating bodies must become final and
executory on some definite date fixed by law. [...], the
Supreme Court reiterated that the doctrine of
immutability of final judgment is adhered to by
necessity notwithstanding occasional errors that may
result thereby, since litigations must somehow come to
an end for otherwise, it would even be more intolerable
than the wrong and injustice it is designed to correct.

13
Gadrinab v. Salamanca, GR No. 194560, 11 June 2014.
14
GR No. 192406, 21 January 2015.
CA-G.R. SP No. 07334-MIN Page 5 of 7
Decision

This Court notes from the records herein that DHC failed to
perfect its memorandum of appeal of the Arbiter’s 17 July 2012
Decision for non-payment of appeal bond.15 This fact was not at all
disputed by DHC.

In this connection, Sections 122 and 126 of the 2004

Implementing Rules and Regulations of R.A. 7875 provide that the
payment of appeal fee is a pre-requisite for the perfection of the appeal.
Viz –

SECTION 122. Appeal Fee – The appellant shall pay

an appeal fee in an amount as may be determined by the
Corporation except when the appellant is the
Corporation or a member of the Indigent Program. The
official receipt of such payment shall be attached to the
records of the case. No appeal shall be entertained
without the payment of the appeal fee.

SECTION 126. Perfection of Appeal – An appeal

shall be under oath with proof of payment of the
required appeal fee. It shall be accompanied by a
Memorandum of Appeal. A mere notice of appeal
without complying with the aforesaid requisites shall
not stop the running of the period for perfecting an
appeal.

The phrase “appeal fee” embraces the deposit of an amount

equivalent to the fine imposed in the appealed decision. This deposit is
called an appeal bond. Non-compliance of such deposit shall be a
ground for the outright dismissal of the administrative case.16

The serious lapse on DHC’s part to pay appeal bond renders the
17 July 2012 Decision of the Arbiter as final and executory. As such,
all the findings and conclusions of the Arbiter therein are already
deemed immutable and can no longer be the subject of either an appeal
with the Philhealth or of a petition for review before this Court.

It bears to emphasize that the perfection of an appeal within the

period and in the manner prescribed by law is jurisdictional and non-
compliance with such requirements is considered fatal. It has the effect
15
Supra note 1 at p. 20.
16
Philippine Health Insurance Corporation Board Resolution No. 739, Series of 2004;
Rollo, p. 116.
CA-G.R. SP No. 07334-MIN Page 6 of 7
Decision

of rendering the judgment final and executory. Indeed, the right to

appeal is a statutory right and the one who seeks to avail that right must
comply with the statute or rules.17 This, DHC failed to observe.

Moreover, even if this Court would brush aside the procedural

lapse of DHC, the 24 February 2016 Decision of the Philhealth will
still be sustained. Jurisprudence instructs this Court that findings of fact
made by administrative agencies are not only entitled to great respect,
but even finality, and are considered binding if the same are supported
by substantial evidence.18

Substantial evidence is defined as such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion,
even if other minds equally reasonable might conceivably opine
otherwise.19

In this case, the Court holds that Philhealth found substantial

evidence on record sufficient for it to conclude that DHC was not able
to successfully overturn the presumption of regularity enjoyed by the
Domiciliary Visit Undertaking of Fabia apropos the veracity of her
hospitalization.20 For this reason, this Court finds no reason to deviate
from Philhealth’s affirmance of the 17 July 2012 Decision of Arbiter
Polintan.

All things told, Philhealth did not commit any grave error in
rendering the impugned 26 February 2016 Decision.

ACCORDINGLY, the Petition for Review is DISMISSED.

SO ORDERED.

ORIGINAL SIGNED
LOUIS P. ACOSTA
Associate Justice

17
Spouses Lee v. land Bank of the Philippines, GR No. 218867, 17 February 2016.
18
Malayang Manggagawa Ng Stayfast Philippines, Inc. v. NLRC, GR No. 155306, 28
August 2013.
19
Inc. Shipmanagement Inc. v. Moradas, GR No. 178564, 15 January 2014.
20
Supra note 1 at p. 20.
CA-G.R. SP No. 07334-MIN Page 7 of 7
Decision

WE CONCUR:

ORIGINAL SIGNED ORIGINAL SIGNED

EDGARDO T. LLOREN PERPETUA T. ATAL-PAÑO
Associate Justice Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is

hereby certified that the conclusions in the decision were reached in
consultation before the case was assigned to the writer of the opinion of
the Court.

ORIGINAL SIGNED
EDGARDO T. LLOREN
Associate Justice
Chairperson, Special Twenty-third Division