Section 38. Penal Provisions.— Any violation of the provisions of this Act, after due notice and hearing, shall suffer the corresponding penalties as herein provided:

1. A health care provider of population-based health services who violates any of the provision in its respective contract shall be subject to sanctions and penalties under its respective contracts without prejudice to the right of the government to institute any criminal or civil action before the proper judicial body.

2. A health care provider contracted for the provision of individual-based health services who commits an unethical act, abuses the authority vested upon the health care provider, or performs a fraudulent act shall be punished by a fine of Two hundred thousand pesos (₱200,000.00) for each count, or suspension of contract up to three (3) months or the remaining period of its contract or accreditation whichever is shorter, or both, at the discretion of the PhilHealth, taking into consideration the gravity of the offense.

   The same shall also constitute a criminal violation punishable by imprisonment for six (6) months and one (1) day up to six (6) years, upon discretion of the court without prejudice to criminal liability defined under the Revised Penal Code.

   If the health care provider is a juridical person, its officers and employees or other representatives found to be responsible, who acted negligently or with intent, or have directly or indirectly caused the commission of the violation, shall be liable. Recidivists may no longer be contracted as participants of the Program.

3. A member who commits any violation of this Act or knowingly and deliberately cooperates or agrees, whether explicitly or implicitly, to the commission of a violation by a contracted health care provider or employer as defined in this section, including the filing of a fraudulent claim for benefits or entitlement under this Act, shall be punished by a fine of Fifty thousand pesos (₱50,000.00) for each count or suspension from availment of the benefits of the Program for not less than three (3) months but not more than six (6) months, or both, at the discretion of PhilHealth.

4. Any employer who:

   1. Deliberately or through inexcusable negligence, fails or refuses to register employees regardless of their employment

      status, accurately and timely deduct contributions from the employee’s compensation or to accurately and timely remit or submit the report of the same to PhilHealth shall be punished with a fine of Fifty thousand pesos (₱50,000.00) for every violation per affected employee, or imprisonment of not less than six (6) months but not more than one (1) year, or both such fine and imprisonment, at the discretion of the court.

      Any employer or any officer authorized to collect contributions under this Act who, after collecting or deducting the monthly contributions from the employee’s compensation, fails or refuses for whatever reason to accurately and timely remit the contributions to PhilHealth within thirty (30) days from due date shall be presumed prima facie to have misappropriated the same and is obligated to hold the same in trust for and in behalf of the employees and PhilHealth, and is immediately obligated to return or remit the amount.

      If the employer is a juridical person, its officers and employees or other representatives found to be responsible, whether they acted negligently or with intent, or have directly or indirectly caused the commission of the violation, shall be liable.

   2. Deducts, directly or indirectly, from the compensation of the covered employees or otherwise recover from them the employer’s own contribution on behalf of such employees shall be punished with a fine of Five thousand pesos (₱5,000.00) multiplied by the total number of affected employees or imprisonment of not less than six (6) months but not more than one (1) year, or both such fine and imprisonment, at the discretion of the court.

      If the unlawful deduction is committed by an association, partnership, corporation or any other institution, its managing directors or partners or president or general manager, or other persons responsible for the commission of the act shall be liable for the penalties provided for in this Act.

5. Any director, officer or employee of PhilHealth who:

   1. Without prior authority or contrary to the provisions of this Act or its IRR, wrongfully receives or keeps funds or property payable or deliverable to the PhilHealth, and who appropriates and applies such fund or property for personal use, or shall willingly or negligently consents either expressly or implicitly to the misappropriation of funds or property without objecting to the same and promptly reporting the. matter to proper authority, shall be liable for misappropriation of funds under this Act and shall be punished with a fine equivalent to triple the amount misappropriated per count and suspension for three (3) months without pay.

   2. Commits an unethical act, abuse of authority, or performs a fraudulent act shall be punished by a fine of Two hundred thousand pesos (₱200,000.00) or suspension for three

   3. months without pay, or both, at the discretion of PhilHealth, taking into consideration the gravity of the offense. The same shall also constitute a criminal violation punishable by imprisonment for six (6) months and one (1) day up to six (6) years, upon discretion of the court without prejudice to criminal liability defined under the Revised Penal Code.

Other violations of the provisions of this Act or of the rules and regulations promulgated by PhilHealth shall be punished with a fine of not less than Five thousand pesos (₱5,000.00) but not more than Twenty thousand pesos (₱20,000.00).

All other violations involving funds of PhilHealth shall be governed by the applicable provisions of the Revised Penal Code or other laws, taking into consideration the rules on collection, remittances, and investment of funds as may be promulgated by PhilHealth.

PhilHealth may enumerate circumstances that will mitigate or aggravate the liability of the offender or erring health care provider, member or employer.

Despite the cessation of operation by a health care provider or termination of practice of an independent health care professional while the complaint is being heard, the proceeding shall continue until the resolution of the case.