Introduction

In the Philippine healthcare system, hospital bills can accumulate rapidly, especially during emergencies or prolonged treatments. For patients enrolled in Health Maintenance Organizations (HMOs), coverage is intended to alleviate financial burdens, but gaps in coverage, delays in approvals, or disputes over benefits can lead to outstanding balances. In such scenarios, requesting a promissory note becomes a critical mechanism to facilitate hospital discharge without immediate full payment. This article explores the legal framework, procedures, rights, obligations, and practical considerations surrounding promissory notes for hospital bills when HMOs are involved, grounded in Philippine law and regulations.

Legal Basis for Promissory Notes in Hospital Settings

The primary legislation governing the use of promissory notes for unpaid hospital bills is Republic Act No. 9439, also known as the "Anti-Hospital Detention Law," enacted in 2007. This law prohibits hospitals and medical clinics from detaining patients or their companions solely due to nonpayment of bills. Instead, it mandates that facilities allow patients to leave upon the execution of a promissory note covering the unpaid amount.

Key provisions of RA 9439 include:

Prohibition on Detention: No hospital or clinic may refuse to issue a death certificate, transfer records, or release a patient (or their remains) based on unpaid bills. Violations can result in fines up to PHP 50,000, imprisonment up to six months, or revocation of the facility's license.
Promissory Note Requirement: The note must specify the unpaid balance and be signed by the patient or their authorized representative. It must be secured by either:
- A mortgage on real property, or
- A guarantee from a co-maker who assumes joint and several liability.
Exceptions for Indigents: For patients certified as indigent by the hospital's social welfare officer or the Department of Social Welfare and Development (DSWD), no security is required, and the bill may be covered by government assistance programs.

This law intersects with HMO regulations under the Insurance Code of the Philippines (Presidential Decree No. 612, as amended) and oversight by the Insurance Commission (IC). HMOs are required to provide timely coverage for accredited services, but patients may still face out-of-pocket expenses for non-covered items, such as room upgrades or experimental treatments.

Additionally, the Universal Health Care Act (Republic Act No. 11223, 2019) enhances integration between PhilHealth (the national health insurance program) and private HMOs, mandating coordination to minimize patient costs. However, disputes over HMO denials can trigger the need for promissory notes as a temporary bridge.

The Role of HMOs in Hospital Billing

HMOs in the Philippines, such as Maxicare, PhilCare, or Medicard, operate as prepaid health plans where members pay premiums for access to a network of providers. Coverage typically includes inpatient and outpatient services, but limitations exist:

Pre-Approval Requirements: For non-emergency admissions, HMOs often require prior authorization. Delays in this process can lead to hospitals billing patients directly.
Coverage Caps and Exclusions: Annual benefit limits, waiting periods for pre-existing conditions, or exclusions for certain procedures (e.g., cosmetic surgery) may result in uncovered portions.
Coordination with PhilHealth: HMOs must deduct PhilHealth benefits first, but mismatches in reimbursement can create balances.

When an HMO is involved, hospitals may issue a "Letter of Authorization" (LOA) from the HMO confirming coverage. If the LOA is delayed or insufficient, patients can request a promissory note to cover the gap, with the expectation that the HMO will reimburse later. Under IC Circular Letter No. 2016-41, HMOs must resolve claims within 30 days, but failures can lead to patient liability.

Process for Requesting a Promissory Note

Requesting a promissory note involves a structured procedure to ensure compliance with RA 9439 and protect all parties:

Assessment of Bill: Upon discharge, the hospital's billing department calculates the total bill, deducting any HMO or PhilHealth payments received or anticipated.
Notification of Unpaid Balance: If a balance remains, the hospital informs the patient or representative. Patients should review the itemized bill for accuracy, disputing any errors (e.g., double-billing or non-covered items misclassified).
Request Submission: The patient formally requests a promissory note, often via a written letter or hospital form. Include details such as:
- Patient's full name and contact information.
- Hospital admission details.
- HMO membership information (policy number, provider).
- Reason for the request (e.g., HMO delay or partial coverage).
- Proposed payment terms (installments, due dates).
Security Arrangement: Provide either:
- A mortgage deed on real property, registered with the Registry of Deeds.
- A co-maker's guarantee, including their ID, contact details, and consent to liability.
Execution and Notarization: The note is drafted by the hospital (or patient's lawyer) and signed. Notarization is advisable for enforceability under the Civil Code (Articles 1156-1162 on obligations).
HMO Coordination: Simultaneously, notify the HMO in writing about the promissory note, attaching copies of the bill and LOA. This preserves the right to reimbursement.
Discharge: Once executed, the hospital must allow immediate discharge. Retention beyond this point violates RA 9439.

For HMO-specific issues, patients can escalate to the IC if the HMO denies coverage unreasonably, potentially voiding the promissory note if the denial is overturned.

Rights and Obligations of Parties Involved

Patient's Rights:

Right to Discharge: Immediate release upon promissory note execution, without harassment.
Right to Dispute: Challenge bill accuracy or HMO denials through hospital grievance mechanisms or IC complaints.
Confidentiality: Protection under the Data Privacy Act (RA 10173) for health records.
Government Assistance: Eligibility for DSWD's Assistance to Individuals in Crisis Situation (AICS) or PhilHealth enhancements if low-income.

Patient's Obligations:

Payment Commitment: Fulfill the note's terms; default can lead to civil collection suits under the Civil Code.
Accuracy in Information: Provide truthful details; fraud can invalidate the note and invite penalties.
HMO Follow-Up: Pursue reimbursement from the HMO diligently.

Hospital's Rights and Obligations:

Right to Payment: Enforce the promissory note via court if unpaid.
Obligation to Comply: Adhere to RA 9439; non-compliance risks sanctions from the Department of Health (DOH).
Transparency: Provide itemized bills and explain HMO interactions.

HMO's Rights and Obligations:

Right to Deny: For non-covered services, but must justify in writing.
Obligation to Pay: Timely settlement of approved claims; delays can be reported to the IC, with fines up to PHP 500,000.
Coordination: Work with hospitals to minimize patient out-of-pocket costs under UHC guidelines.

Challenges and Common Issues

Several pitfalls arise in this context:

HMO Delays: Processing times can extend hospital stays; patients may seek IC intervention for expedited reviews.
Disputed Coverages: If an HMO denies a claim post-discharge, the patient remains liable under the promissory note but can sue the HMO for breach of contract.
High-Interest Notes: Hospitals may impose interest (up to 6% per annum under usury laws, unless agreed otherwise), but excessive rates are voidable.
Indigent Misclassification: Hospitals sometimes overlook indigent status, requiring advocacy from DSWD.
COVID-19 Legacy: During the pandemic, DOH issuances (e.g., Department Circular 2020-0070) expanded promissory note flexibilities for quarantine-related bills, setting precedents for emergencies.

In litigation, courts (e.g., via small claims for amounts under PHP 400,000) prioritize patient welfare, often ruling against hospitals for RA 9439 violations.

Practical Tips and Best Practices

Preparation: Maintain updated HMO cards and know policy details. During admission, confirm LOA promptly.
Documentation: Keep copies of all communications, bills, and the promissory note.
Legal Assistance: Consult free legal aid from the Integrated Bar of the Philippines or Public Attorney's Office if disputes arise.
Alternatives: Explore hospital charity funds, medical assistance from politicians' offices, or crowdfunding, but these don't replace promissory notes.
Prevention: Opt for HMOs with strong track records; review annual IC reports on complaint resolutions.

Conclusion

Requesting a promissory note for hospital bills involving HMOs in the Philippines serves as a vital safeguard against financial distress, enshrined in RA 9439 and supported by broader health laws. While it bridges gaps in coverage, it underscores the need for robust HMO accountability and patient awareness. By understanding the legal intricacies, patients can navigate these situations effectively, ensuring access to care without undue hardship. For complex cases, professional legal advice is indispensable to tailor solutions to individual circumstances.