The Colombian government has temporarily repossessed health insurance company (EPS) Saludcoop for possible involvement in the country’s major health sector scandal.
Carlos Palacino, the insurance company’s president, retired his position Thursday, and the enterprise was immediately taken over by the state’s health superintendent.
The action took place just one day after Vice President Angelino Garzon threatened to repossess EPS companies that were proved to be involved in corrupt activities, including embezzlement and fraud.
The state intervention in Saludcoop happened as a result of investigations which took place in March 2011, during which authorities discovered inconsistencies in its financial operations and the flow of money in the treasury in regards to debt payments.
For its part, Saludcoop affirmed that the intervention in the company is only for two months and occurred only for non-payment of debts, not for other reasons.
Saludcoop is one of many of Colombia’s private insurance companies, funded by state money, that are in charge of providing health care to Colombian citizens.
Insurance companies have come under heat recently after the government began to uncover an embezzlement scheme that has allegedly cost the country as much as $2.5 billion and cheated millions of citizens out of proper health care.
According to the prosecutor general, corrupt insurance officials would reject Colombian citizens’ applications for health insurance assistance with medical bills. The act is illegal because all employed Colombians pay a percentage of their salary to the country’s health sector and, accordingly, have a right to receive help with medical fees.
After rejecting the claims, the corrupt officials apparently proceeded to use the patients’ information to file the applications as if they had been accepted, keeping the surplus money, with the patients unaware of their actions.