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Case No. 1: Hospital A offered non-covered treatment packages tiered by length of stay — marketed like hotel products — and directed its medical staff to provide care according to whichever package a patient had selected. The hospital is also suspected of refunding patients the equivalent of their legally required co-payments when those patients held private health insurance.

Case No. 2: Hospital B is suspected of issuing receipts inflated beyond the actual amount charged, enabling patients to file larger insurance claims, while collecting only 70 percent of the actual treatment cost. The hospital is also alleged to have told inpatients they were free to leave the premises at will.

Authorities referred additional medical facilities to police after uncovering further suspected cases of so-called "payback" schemes — arrangements in which clinics refund part of a patient's medical bill or offer other financial incentives to attract patients.

The Ministry of Health and Welfare's abnormal and fake treatment administrative investigation unit said Wednesday it had referred 12 additional clinics and hospitals suspected of offering fee refunds to cancer patients to police for investigation. The unit had previously referred six facilities on July 1.

The 12 facilities were identified from reports submitted to a tip-off center that has been operating since June 18, and were deemed credible enough to warrant prompt investigation.

Payback schemes violate the Medical Service Act's prohibition on soliciting or brokering patients. Violations carry a penalty of up to three years in prison or a fine of up to 30 million won ($20,100).

The 12 facilities referred this time comprise five convalescent hospitals, six traditional Korean medicine hospitals and one clinic. By region, two are in the Greater Seoul area, five in the Gyeongsang provinces and five in the Jeolla provinces.

The investigation unit plans to refer cases to police immediately whenever credible tip-offs involving suspected payback schemes or illegally operated hospitals arise during its nationwide on-site administrative inspections, so that criminal investigations can proceed in parallel.

The unit conducted on-site administrative inspections last week at six hospitals and clinics in the Greater Seoul area, North Gyeongsang Province, South Jeolla Province and North Chungcheong Province, and said it would soon decide what action to take based on those findings.

When a medical professional is found to have violated medical ethics guidelines, the unit also plans to refer the case to the ethics committees of relevant associations — including the Korean Medical Association, the Korean Hospital Association and the Korean Long-Term Care Hospital Association — following a peer review process conducted with those bodies' cooperation.

Kwak Sun-heon, head of the ministry's abnormal and fake treatment administrative investigation unit, said the ban on soliciting and brokering patients "is a foundational principle of the Medical Service Act, designed to protect the professional judgment of medical practitioners and patients' right to make sound treatment choices." He added that the unit would "continue to respond firmly to any conduct suspected of violating medical laws and regulations by closely coordinating tip-offs, on-site inspections and cooperation with investigative agencies."


thlee@heraldcorp.com