Health insurance fraud prompts Chinese authorities to step up supervision

Photo: Xinhua

Two hospitals in Shenyang, the capital of Northeast China's Liaoning Province, have been ordered to suspend operations and all patients have been transferred, after the state broadcaster China Central Television (CCTV) reported on possible health insurance frauds.

According to CCTV, the hospitals hired healthy seniors who were covered by the country's basic health insurance system to be hospitalized, so that they could use fake medical records to claim subsidies from the government.

"The seniors stayed at the hospitals all day without receiving any actual treatment," said the report. "They were offered free lunches and paid up to 50 yuan ($7.20) one time."

CCTV noted that for each fake patient, the hospitals can earn over 1,000 yuan.

As of press time, 37 suspects have been arrested by local police, and 19.9 million yuan of subsidies have been frozen, according to the report.

China's National Health Care Security Administration held a news conference to respond to the case last week.

"We have ordered inspections of hospitals and pharmacies nationwide to spot possible health insurance frauds," said Huang Huabo, an official of the newly founded administration.

"The subsidies are life-saving fund for the public. Ensuring their security is significant for people's livelihoods, and also an important political task for us," Huang added.

He also revealed that they will target hospitals that encourage patients to use other people's social security cards or make false reports on their medical expenses.

China began to establish a nationwide basic medical insurance system for its urban and rural residents in 2007.

Over 1.35 billion people have been covered by the system, accounting for 95 percent of the country's population, according to the National Health Commission.

However, health insurance frauds can be found in many cities.

According to Huang, 761 hospitals, clinics and pharmacies in Chuangchun, the capital of Northeast China's Jilin Province, were confirmed to be involved in illegal practices, and local government agencies refused to grant subsidies of over 10 million yuan to them.

Some 92 hospitals in Tianjin were disqualified from making health insurance claims. Nearly 18 million yuan was recovered, he revealed.

Hundreds of hospitals and pharmacies in North China's Hebei Province and Shanxi Province were also disciplined, Huang said.

In an attempt to explain the frequent occurrence of health insurance frauds, Jiang Yu, a researcher at the Development Research Center of the State Council, China's cabinet, said the fast-expanding and profit-seeking private hospitals are a main contributor.

"Inadequate funding has also led some state-owned hospitals to turn to the insurance pool for supplementary income, for which there is not enough oversight," he added.

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