A Chinese Hospital’s Fraudulent Scheme to Acquire Money

By Annie Wu, Epoch Times
January 23, 2018 Last Updated: January 30, 2018

A recent exposé has revealed the ways in which hospitals scam the insurance system to get insurance payments, akin to running a business operation to profit off patients.

An article published in the state mouthpiece news agency, Xinhua, on Jan. 18 detailed how staff at the Anhui University of Chinese Medicine No. 3 Affiliated Hospital colluded to give false diagnoses to patients, in order to acquire insurance funds.

A Xinhua reporter went undercover to pose as a relative of a patient, identified as Mr. Li (a pseudonym). When Li visited the hospital, the doctor asked simple questions about his symptoms, but did not conduct a physical exam or inquire about his medical history—and proceeded to fill out forms for him to be hospitalized.

When Li expressed that he did not wish to be hospitalized, the staff still made him fill out a note for leave of absence, telling him to leave the dates blank so that if the insurance center staff checks the records, the hospital can fill in the date themselves.

It turns out that the hospital can get more insurance payments from patients’ hospital stays. The reporter accompanied a female patient to the dermatology department, where the doctor explained that if the patient used only outpatient services, the ointment for her treatment would cost 8,000 to 9,000 yuan—whereas if she stayed at the hospital, the government-funded insurance would reimburse 90 percent of the cost.

The female patient revealed that she previously stayed at the hospital twice, but did not receive any treatment. But that way, the hospital would get the insurance payment. She ended up paying under 1,000 yuan for her stay and received medicines worth 1,700 yuan and a voucher for a massage service worth 3,000 yuan.

The hospital also took advantage of a provision in China’s medical system that allows patients diagnosed with “special illnesses” to be reimbursed for the money they spend on medicine. Doctors gave certain regular patients fake diagnoses in order for them to benefit from this.

These arrangements allowed the hospital to get revenue for treatment and attract more “customers,” while the patients themselves receive compensation and other health benefits—while the country’s insurance funds are depleted.

An injured woman arrives at a hospital in China’s southwestern Sichuan Province on August 9, 2017. (STR/AFP/Getty Images)

An anonymous insider source told Xinhua that the staff engaged in this fraud because each medical department is assigned quota targets, so the staff feel pressured to bring in more patients.

The source also revealed that the hospital would accept any person who carried a social welfare card without checking to see if the person matched the name on the card. Thus, a patient could pass the card on to their relatives for them to get medicine, treatment services, and hospital stays at a discounted price.

Some doctors even have kept the patients’ insurance cards with them, so the hospital could make all sorts of insurance claims on behalf of the patients, the source said. Meanwhile, patients would get some of the cash back.

Xinhua learned that one patient who kept his insurance card at the hospital later found out that his hospital record showed him using outpatient services every month.

Another patient found out that his insurance card was used more than 800 times within 11 years.

This type of fraud is not uncommon. In December 2017, China Business News Daily and the state-run The Paper reported on hospitals in Zhengzhou City, Henan Province and Xiangtan City, Hunan Province that engaged in similar fraud in order to attract patients.

The Paper noted that after the report was published, the hospital punished nurse staff, but hospital management and supervisors of the insurance system were not held responsible.

Li Tianyu contributed to this report.