China aims to rein in fraud in healthcare insurance funds
New rules implemented to prevent drug resale, fabrication of medical records
China will implement detailed rules for supervising healthcare insurance funds, pledging a tougher crackdown on fraudulent activities such as fabricating medical records and illegally reselling drugs.
The rules, which take effect on Wednesday, expand on the existing regulations for supervising and administering healthcare security funds released in 2021. They provide a clearer list of fraudulent activities that have emerged in recent years.
For instance, designated medical institutions and their personnel who entice others to seek medical treatment or purchase drugs under another person's name, or who create fake medical records, will be considered as committing insurance fraud.
Gu Rong, head of the National Healthcare Security Administration's fund supervision department, said the stipulation is aimed at addressing fraudulent activities that use inducements such as door-to-door transportation services, waiving or reducing fees, offering kickbacks, or giving away rice, cooking oil and flour.
To intensify the crackdown on drug resale, the rules state that designated medical institutions that organize others to purchase drugs or medical consumables using insurance funds and then resell them will be deemed to have committed fraud. Assisting others in doing so, despite knowing their illegal purpose, is also defined as fraud.
"We have found that when some drug traffickers bring more than a dozen health insurance slips to hospitals to obtain prescriptions, some doctors issue prescriptions without checking their personal information or verifying whether there is a valid authorization letter," he said.
The rules also highlight a number of fraud cases committed by individuals, such as purchasing or reselling drugs on the national basic reimbursement list, entrusting their healthcare insurance credentials to others for use in exchange for cash or goods, and providing false materials or concealing relevant facts to obtain benefits such as medical assistance, coverage for chronic or special outpatient diseases, and maternity allowances.
They also specify 12 types of serious conduct suspected of violating the law that should be promptly referred to public security authorities. These include organizing healthcare insurance fraud and organizing the resale of drugs covered by healthcare insurance.
Huang Huabo, deputy director of the administration, said that more than 120 billion yuan ($17.4 billion) in misused funds has been recovered, and losses of 9.5 billion yuan have been prevented as a result of intelligent supervision tools.
As part of efforts to eliminate drug resale, the administration has also collected more than 100 billion drug traceability codes.
In one of the most recent medical insurance fraud cases published in March by authorities in Shanghai, several individuals defrauded about 8.6 million yuan in insurance funds by purchasing drugs obtained through fake medical records or directly using other people's credentials from January 2020 to March 2024.
The ringleader, surnamed Wang, targeted elderly people at hospitals and induced them to cooperate by offering small kickbacks.
He was sentenced to 13 years in prison and fined 250,000 yuan for fraud.
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