Courts intensify insurance fraud fight

China's top court has directed courts nationwide to intensify their crackdown on crimes related to medical insurance fraud, stressing the need to safeguard public health rights and ensure the security of the national insurance fund.

In a statement released on Tuesday, alongside details of four prominent cases, the Supreme People's Court described the fund as people's "life-saving money" and emphasized the importance of protecting it.

"The fund concerns the basic interests of the public and relate to the healthy and sustainable development of the medical security system. It is also crucial for the long-term stability of the country," the court said.

It cited data showing that courts across China concluded 1,156 criminal cases of medical insurance fraud last year, up 131.2 percent from the previous year. Authorities recovered more than 402 million yuan ($55.9 million) in losses.

The court called on judges to swiftly resolve disputes involving the national insurance fund and to place greater focus on organizers or repeat perpetrators of fraud.

One of the cases involved a man surnamed Ai, a former controller of a private hospital in Datong, Shanxi province, who was sentenced to 13 years and six months in prison and fined 500,000 yuan for fraud.

According to the Shanxi court judgement, Ai and six others solicited patients for unnecessary hospitalizations in order to defraud the national insurance fund by inflating drug prices, increasing medication and examination fees, submitting false bed occupancy reports, fabricating medical records and data, and exaggerating medical expenses.

By the end of 2020, the hospital had falsely claimed more than 9.7 million yuan from the fund. Ai received the heaviest sentence due to his role as an organizer of the scheme and the massive amount of money involved in it. The other six were sentenced to between four and 11 years and fined between 30,000 and 200,000 yuan.

"Legal support should be provided for private hospitals that enrich medical resources and ensure public access to healthcare and medications," the top court said. "But for those engaging in fraudulent activities to obtain money from the national medical insurance fund for personal gain and who are seriously undermining the development of the healthcare system, harsh punishments will be imposed."

The top court also noted the growing severity of offenses involving the illegal resale of drugs acquired through medical insurance and urged courts to strengthen efforts against the practice.

In another case, a man surnamed Dai in Fuliang county, Jiangxi province, was sentenced to six years in prison and fined 120,000 yuan for profiting from the illegal resale of medical insurance drugs.

Dai, who did not have a drug distribution license, bought drugs via WeChat and made more than 3.4 million yuan in profit by selling them to others through the platform between June 2020 and December 2021. He earned another 750,000 yuan from July 2022 until his arrest.

"Dai's actions not only caused losses to the insurance fund, but also led to improper storage and wastage of drugs," the top court said. "If expired drugs re-enter the market, public health will face a threat."

The top court urged judges to watch out for new fraud tactics and called on government departments to step up oversight of medical insurance funds.