News Life and Health23 Nov 2018

China:Hundreds of medical centres caught for insurance fraud

23 Nov 2018

China has ordered a review of hospitals and pharmacies nationwide to ferret out health insurance scams, a week after the national broadcaster China Central Television exposed two suspicious cases in northeast China.

Mr Huang Huabo, an official with the newly created National Healthcare Security Administration, said that the new review follows a national inspection in September which probed fraudulent practices in the sector, according to a report by China News Service.

Two hospitals in Shenyang, the capital of Liaoning province, were accused of hiring people who were covered by the government-run basic health insurance system and hospitalised them using fake medical records to claim insurance money from social health insurance funds, CCTV reported last week.

As of 19 November, 37 suspects had been detained by police in Shenyang, and CNY19.9m ($2.87m) of insurance money had been frozen, the broadcaster said.

China began to establish a nationwide basic medical insurance scheme in 2007 that covers urban and rural residents, and coverage has expanded over time. More than 1.35bn people, or about 95% of China's population, are currently covered by the system, which provides reimbursement of a certain percentage of a patient's medical expenses.

During earlier inspections, a number of hospitals were found to have defrauded the basic health insurance fund. According to the Aadministration, 761 hospitals, clinics and pharmacies in Chuangchun, the capital of Jilin province, were disciplined during that inspection, and government agencies refused to reimburse more than CNY10m of insurance claims.

Ninety-two hospitals in Tianjin were disqualified from making health insurance claims. Almost CNY18m of falsely claimed money was recovered. Hundreds of errant hospitals and pharmacies in Hebei and Shanxi provinces were also disciplined.

Mr Huang said the upcoming review will target hospitals that convince patients to receive unnecessary treatment or that fake medical records to cheat the government. Hospitals that encourage patients to use other people's social security cards or make false reports on their medical expenses will also be targeted, along with pharmacies and individuals involved in such scams, he said.

The Administration will also set up a reward system for whistleblowers.

Mr Jiang Yu, a researcher in the State Council's Development Research Centre, said that health insurance scams are not a new phenomenon and have increased in recent years.

"The growth of private hospitals is a main contributor," he said, adding that many are profit-seeking. At the same time, the threshold for entering the sector is relatively low, he said.

Mr Jiang added that inadequate healthcare financing has also led some public hospitals to turn to the insurance fund for supplementary income, over which there is inadequate oversight.

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