Refer China: New China Psychiatric Hospitals Exposed in Insurance Fraud Scam

Summary: An investigation reveals psychiatric hospitals in Hubei province recruiting healthy people as fake patients to fraudulently claim public medical insurance funds. Patients receive little to no treatment while hospitals bill for fabricated procedures.

A number of psychiatric hospitals in central China have been exposed over a scam in which they lure healthy people to become patients in a bid to defraud the public medical insurance scheme.

According to an undercover report by the Beijing News, most of the patients in such privately run psychiatric institutions in Xiangyang, Hubei province, do not show any abnormal behaviour and receive little treatment.

The healthy individuals told the newspaper that they stayed there because of a "free hospitalisation, free living costs" promise on offer.

In China, patients have to bear a percentage of their medical bills; public insurance covers the rest.

Many of the so-called patients, like those above, have little idea what is going on. Photo: bjnews

After they are admitted, they become cash cows for the hospital because the institutions use their personal information and fabricate medical treatments to swindle funds from the medical insurance scheme, the report said.

There are more than 20 psychiatric hospitals in Xiangyang, a city with a population of 5.3 million. Most of them opened in recent years.

When the reporter posed as a relative of a patient and checked with over 10 psychiatric centres, all of them told him that they would not charge the patient anything and that he was only required to pay a small amount for living costs.

"What we hope is that your relative can live here for a long period of time," one worker told the reporter. "He can live here for however long he wants."

A group of "mentally ill" men play cards in one of the hospitals implicated in the scam. Photo: bjnews

In early December, the reporter was recruited as a nurse at Xiangyang Hongan Psychiatric Hospital, which opened last summer and accommodates about 50 patients.

Most of the patients have zero or very light symptoms, a senior nurse told him.

Some patients in their 70s are not able to move around independently.

"They are tended by us. They regard our hospital as a nursing centre because it is much cheaper than ordinary nursing homes," said the senior nurse.

Another nurse who worked alongside the undercover reporter said he was also "hospitalised" and his personal information has been retained by the institution's patient system.

A cramped ward in one of the institutions which are now under investigation by the authorities. Photo: bjnews

"I do not need to take any medicine or receive any treatment. I can enter and leave the hospital freely. I work as normally as others," he was quoted as saying. "I cooperated with them to cheat the insurance authority ."

In the hospital's inpatient charging system, the reporter found a patient who stayed for 90 days was required to pay 12,426 yuan (US$1,800).

This included only 500 yuan (US$70) for medication and expenses of more than 6,000 yuan (US$900) for various treatments.

However, the patient told the reporter that he only took the medicine and had never heard of the treatments.

"I only had the medicine every day, without even having an injection. It is like staying at home," said the patient.

Medical equipment at this hospital is scarce, a doctor told the reporter.

Many of the psychiatric institutions in Xiangyang apply to the medical insurance authority saying that they charge a patient a medical treatment fee of 130 yuan (US$20) a day.

"The hospitals will be compensated by the insurance for this amount. So the more patients and the longer they stay in hospitals, the more money they can make," another hospital employee said.

A patient lies strapped to a bed in one of the hospitals. They are usually allowed little contact with their families. Photo: bjnews

Hospitals award their staffers between 400 and 1,000 yuan (US$60 and US$145) commission for recruiting each new patient.

The reporter also found nurses at Hongan hospital often slapped patients in the face, kicked them and beat them with a water pipe.

In Yiling Caring Hospital in Yichang, a city near Xiangyang, where the reporter performed a stint as a nurse, the insurance fraud and beatings of patients also occurred.

Both hospitals seized patients' mobile phones and limited their time communicating with their families.

Hospital workers tried every means to prevent patients from being discharged.

A patient who stayed at Yiling hospital for five years told the reporter: "The rules here are strict. I have no freedom. It feels like I have been in jail for five years."

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Editor: Crystal H