COMMISSION ON AUDIT CIRCULAR NO.

76-31 May 28, 1976

TO : All Heads of Departments, Chiefs of Bureaus, Agencies and Offices; Provincial

Governors and City and Municipal Mayors, Managing Heads of Government-
Owned or Controlled Corporations and Self-Governing Boards, Agencies and
Commissions; COA Managers; COA Regional Directors; Corporation, Provincial,
City and National Auditors and Others Concerned.

SUBJECT : Presidential policy on the matter of disallowance of continuous reimbursement of

medical expenses under the Workmen's Compensation Act after retirement in
certain exceptional cases.

Quoted hereunder in full is a 14th Indorsement, dated November 17, 1975, of the Office
of the President, which is self-explanatory:

"14th Indorsement
Nov. 17, 1975

Respectfully returned, through the Honorable Secretary, Department of

Local Government and Community Development, to the Honorable Acting
Chairman, Commission on Audit, both in Quezon City.

This refers to the claim of Andres Sumayod for further reimbursement of

medical expenses he incurred to cure his service-connected illness during the
protracted treatment of which he was previously paid considerable amounts by
way of refund of similar expenses.

Sometime in 1965, Sumayod suffered a cerebrovascular accident while in

the course of performing his official duties as assistant chief deputy in the Office
of the Provincial Treasurer of Leyte. Consequently, he filed a claim for benefits
under Act No. 3428, otherwise known as the Workmen's Compensation Act, as
amended, with the Department of Labor regional office in Tacloban City which, in
a decision dated February 12, 1968, awarded him diisability benefits and ordere
that in case he "continued to purchase (after December 5, 1967) the prescribed
medicines for his sickness, then respondent (Province of Leyte) should
reimburse him of such expenses." In the meantime or on February 9, 1966,
Sumayod retired from the service upon reaching the age of 65 years.

Accordingly, Sumayod claimed reimbursement and was refunded the

medical expenses he allegedly incurred for the periods from December 6, 1967
to December 31, 1969, and from March 18, 1969 to June 10, 1972 in the
amounts of P4,240.92 and P14,989.35, respectively, itemized as follows:

December 6, 1967 December 31, 1968 P2,302.40

January 1, 1969 June 30, 1969 (partial) 307.52
do (balance) 544.00
 July 1, 1969 December 31, 1969 1,087.00

TOTAL P4,240.92

March 18, 1969 2,819.41

May 13, 1969 2,820.14
August 21, 1969 2,302.40
October 15, 1969 307.52
April 3, 1970 544.48
May 6, 1970 1,087.00
August 5, 1970 1,390.87
January 28, 1971 266.45
March 16, 1971 1,200.00
July 14, 1972 1,212.25
June 10, 1972 1,039.10

TOTAL P14,989.35

However, his subsequent additional claim did not meet the same favorable action
from the Provincial Board of Leyte as the latter passed a resolution on August 30,
1972 "establishing a policy of limitation to the payment of medical expenses due
to the precarious financial condition of the province," and indorsing the case to
the Auditor General, now Acting Chairman of the Commission on Audit, with a
request for opinion as to whether the Provincial Government of Leyte should still
continue to pay the claim after it had already refunded Sumayod the sums
referred to above.

Without giving his view on the matter, the Acting Chairman of the
Commission on Audit decided on March 29, 1973 to elevate the same, through
the Secretary of Local Government and Community Development, to this Office
to seek from the latter a policy ruling thereon. Cognizant of the controversial
nature of the policy ruling solicited, this Office sought the comment and
recommendation of the Secretary of Labor who then transmitted the case to the
Director of Workmen's Compensation for proper action.

In his March 29, 1974 indorsement to this Office, the Workmen's

Compensation Director expressed doubt as to the legality of a policy ruling
limiting the reimbursement of medical expenses under Section 13 of the
Workmen's Compensation Act, as amended, in the light of the absence of
statutory basis therefor. However, he mentioned as a possible exception the
case of "irreversible" illness which could not be relieved nor cured by any amount
of medicine or medical treatment.

Section 13 of the Workmen's Compensation Act, as amended, relevantly

reads:

"SEC. 13. Services, appliances and supplies. - Immediately after an employee has
suffered an injury or contracted sickness and during the subsequent period of disability, the
employer or insurance carrier shall provide the