G.R. No. 193158 November 11, 2015
PHILIPPINE HEALTH INSURANCE CORPORATION, Petitioner, vs. OUR LADY OF LOURDES HOSPITAL, Respondent.

FACTS

Petitioner Philippine Health Insurance Corporation (PHIC) is a government corporation created under Republic Act No. 7875 , as amended, to administer the National Health Insurance Program. Respondent Our Lady of Lourdes Hospital (OLLH) is an institutional health care provider accredited with PHIC. On May 14, 2009, PHIC filed an administrative complaint with its Legal Sector – Prosecution Department against OLLH for the offense of filing multiple claims under the Implementing Rules and Regulations of R.A. No. 7875 . The case, docketed as HCP-NCR-09-082, alleged that OLLH filed two claims for the same amount of PhilHealth benefits involving the same patient, diagnosis, and period of confinement. After OLLH filed its Verified Answer, the parties were directed to submit Position Papers. PHIC complied, but OLLH moved to defer submission pending the answer of the PHIC President and CEO to written interrogatories and the inspection and copying of the original transmittal letter and other claims accompanying Annex B of the Complaint. OLLH claimed it resorted to these discovery modes because its representatives were denied access to documents and not allowed to talk to PHIC personnel regarding the charge. The PHIC Arbitration Department, through Senior Arbiter Atty. Darwin G. De Leon, denied OLLH’s motion via an August 11, 2009 Resolution, stating that the administrative proceedings were summary in nature and allowing discovery would undermine the objective of immediate resolution, and that OLLH’s allegations were self-serving and designed to delay. OLLH’s Motion for Reconsideration was denied in a September 4, 2009 Order, which emphasized that the Arbiter had discretion under the IRR to resolve the case after submission of position papers and that discovery procedures were not mandatory, citing that the Supreme Court ruling relied upon by OLLH pertained to a civil case, not an administrative one. OLLH filed a petition for certiorari with the Court of Appeals, which annulled and set aside the PHIC Arbitration Department’s Resolution and Order, ruling that grave abuse of discretion was committed in denying OLLH’s resort to modes of discovery as it was necessary for OLLH to intelligently prepare its position paper and defense. PHIC filed the present petition for review on certiorari.

ISSUE

Whether the PHIC Arbitration Department committed grave abuse of discretion in denying respondent OLLH’s resort to modes of discovery (written interrogatories and motion for production and inspection of documents) in the administrative proceedings for filing multiple claims.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals Decision. The Court held that the PHIC Arbitration Department committed grave abuse of discretion in denying OLLH’s resort to modes of discovery. The Court ruled that while administrative bodies like PHIC have quasi-judicial powers and can prescribe their own procedural rules, the denial of OLLH’s motion for discovery was not in accordance with due process. OLLH showed good cause for resorting to discovery, as it was denied access to pertinent documents and PHIC personnel, which was necessary to intelligently prepare its position paper and defense. The information and documents sought were relevant and material to the case. The Court emphasized that the right to due process includes the opportunity to be heard and to present evidence, which encompasses the right to avail of discovery procedures to ascertain the truth. The summary nature of administrative proceedings does not justify denying a party the opportunity to properly prepare its defense. The Court also noted that the rules on discovery under the Rules of Court may be applied suppletorily in administrative proceedings. The Arbiter’s denial, based on the mere perception that the motion was designed to delay, without substantial evidence, constituted a capricious and whimsical exercise of judgment equivalent to grave abuse of discretion.