The Parliamentary Committee to Monitor Public Expenditure Development and Control Plans met today, Thursday, February 17, 2022, in the presence of the Ministers of Finance and Health, the Auditor General, the Chairman of the Board and the Deputy Director General of the Health Insurance Agency (HIA) and other stakeholders, for an ex officio review of the Auditor General's Annual Report for the year 2020 [HEALTH INSURANCE AGENCY MANAGEMENT AUDIT SPECIAL REPORT 4.2.2022 (OAS/01/2022)] (File No. 23.04.039.002-2022, 05.14.007.001), which discussed the findings of this report in relation to the audit covering the period from the launch of the General Health Plan (GHP) in June 2019 to December 2021, and whether these findings are in accordance with the legislative framework governing the operation of the GHP.
In particular, the discussion focused on the responsibility of the OAI for the proper implementation of the GHS, as well as the finding of a large increase in OAI spending, which is disproportionate to the growth of the country's gross national product (GNP) and may become a source of fiscal risk. Furthermore, the risks that threaten the sustainability of the GEF and which can only be addressed by the GEF by taking serious measures to prevent and suppress abuses, distortions, fraud and corruption, so that the budget does not put further strain on public finances, were mentioned.
In the context of the debate, the Auditor General provided information on the reasons for the increase in the expenditure of the OAS and stated that the organisation follows a policy of non-transparency with regard to the award of contracts to hospitals, based on arbitrary and non-objective criteria, with different unit prices for each hospital. He added that the OAI acts in flagrant and blatant violation of fundamental provisions and the whole philosophy of the General Health Care Law, without taking measures to comply with the legislation, and pointed to the increase in the OAI's expenditure to such an extent that it becomes disproportionate even to the increase in its revenue, with the result that the organisation operates on the basis of a deficit budget, which constitutes a substantial risk and threatens the sustainability of the General Health Care Law. On the basis of these observations, he recommended that the controls carried out be intensified to ensure the correctness of payments to health care providers and to strengthen the internal control of the agency.
The Minister of Finance said that he agrees with the findings and recommendations of the Audit Office that the legislation of the FTA is not sufficiently implemented and, as a result, the State is required to cover costs that should be covered through the agency's global budget. The Health Minister also said that in the context of a relevant opinion of the Attorney General of the Republic, a meeting will be held with the stakeholders to review the terms of the new contracts to be negotiated by the OAI with private hospitals. Finally, the chairman of the OAI's board of directors pointed out that abuses are observed in all health systems and that it was to be expected that problems would arise with the start of the implementation of the PPA, which is why the OAI, in order to ensure the proper functioning of the system, is making efforts to limit them.
The Commission decided to continue discussing this issue at a future meeting.
Secretariat of the Parliamentary Committee Monitoring of Public Expenditure Development and Control Plans Email: parliamentary-commitees@parliament.cy
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