Courts have repeatedly moved to curb excessive traditional Korean medicine billing tied to minor traffic accidents, yet inadequate sanctions and toothless standards have failed to stop the practice. A rule limiting treatment for minor-injury patients to eight weeks takes effect next month, but its scope is limited, and discussions on sharing public and private medical data remain deadlocked. [Getty Images Bank]
Courts have repeatedly moved to curb excessive traditional Korean medicine billing tied to minor traffic accidents, yet inadequate sanctions and toothless standards have failed to stop the practice. A rule limiting treatment for minor-injury patients to eight weeks takes effect next month, but its scope is limited, and discussions on sharing public and private medical data remain deadlocked. [Getty Images Bank]

As controversy over excessive traditional Korean medicine billing under auto insurance grows, courts have been stepping in to block unnecessary hospitalizations and diagnostic tests for patients involved in minor accidents. The rulings reflect a judicial view that admitting patients solely because they report pain — or repeatedly ordering costly tests — does not constitute professional medical treatment.

On the ground, however, little has changed. When overbilling is caught, practitioners typically face nothing more than repayment orders. Standards meant to prevent duplicate procedures carry no binding force, and discussions on linking public and private medical data — central to detecting insurance fraud — have gone nowhere for two months.

Courts repeatedly block hospitalizations, MRI scans for minor accidents

Courts have recently issued a series of rulings against prolonged and excessive treatment of patients injured in minor traffic accidents, according to the insurance industry.

The Seoul Central District Court ordered a traditional Korean medicine practitioner to repay treatment costs after the practitioner hospitalized a patient involved in a minor accident and ordered an MRI scan, yet could not offer any professional opinion on whether the patient's pain stemmed from the accident or a pre-existing condition. The court found the conduct fell short of what could be considered professional medical treatment by a licensed practitioner.

The court also spelled out what medical professionals are expected to do. Admitting a patient who reports pain but shows no external signs of trauma, it said, is not an appropriate response from a medical expert. Costly MRI scans should be ordered only when professional judgment genuinely requires confirming whether symptoms are accident-related. If a condition is found to be pre-existing, the court added, the practitioner should refuse both hospitalization and auto insurance billing.

In a separate case, a court ordered a man in his 50s to repay 12.1 million won ($8,530) in treatment costs after he spent 41 days hospitalized and made 96 outpatient visits following a minor rear-end collision. The man had claimed the accident completely ruptured a knee ligament, but a physical examination found the condition was a pre-existing injury unrelated to the crash.

In yet another case, a couple in their 30s and their 3-year-old child each spent four days in hospital after their vehicle's side mirror grazed another car. The court recognized only 150,000 won in consolation damages per person.

Repay and repeat: penalties fail to deter

The core problem is that sanctions have not kept pace with the courts. One non-life insurer filed a complaint against a traditional Korean medicine hospital that had pre-compounded large batches of herbal medicine, but police declined to refer the case for prosecution, acknowledging the compounding had occurred while finding insufficient evidence of intent to deceive. Proving fraudulent intent is required to bring insurance fraud charges, yet insurers — which have no investigative authority — struggle to secure that evidence. The result is that insurers follow through with formal complaints or criminal referrals in fewer than 10 to 20 percent of cases where they identify wrongdoing.

License sanctions have gaps as well. Disciplinary proceedings against medical professionals can begin only after investigative agencies notify health authorities, and that notification is sometimes skipped. Industry officials say it is not uncommon for practitioners to repeat the same conduct even after being penalized for insurance fraud or violations of medical law.

Standards meant to curb duplicate procedures also lack teeth. In December 2024, the Health Insurance Review and Assessment Service ruled that performing acupuncture, moxibustion and cupping on the same day could not be considered appropriate care, and decided to recognize only two of the three. Similarly, chuna manipulation and pharmacopuncture applied to multiple areas simultaneously are reimbursed for only one area.

That determination remains a non-binding "public deliberation case" — the weakest category of guidance. It cannot be enforced unless elevated to a Ministry of Land, Infrastructure and Transport directive or a formal Health Insurance Review and Assessment Service review guideline. In the meantime, so-called bundle billing — claiming multiple procedures together in a single charge — has grown at an average annual rate of 30.3 percent over the past five years.

Medical data-sharing talks deadlocked for two months

The government has moved to tighten oversight of long-term treatment. The Ministry of Land, Infrastructure and Transport pushed through an amendment to the enforcement decree of the Guarantee of Automobile Accident Compensation Act at a Cabinet meeting Tuesday. Starting Sept. 10, patients with minor injuries classified at grades 12 to 14 who seek treatment beyond eight weeks from the date of their accident must undergo a review by the Korea Road Transport Authority.

The government had required patients to submit a medical certificate if treatment exceeded four weeks, starting in 2023, but the measure had little effect. The number of minor-injury patients who submitted 18 or more certificates jumped from 140 in 2023 to 1,800 in the first nine months of 2024 — nearly 13 times as many.

Within the insurance industry, concern is growing that the so-called eight-week rule could backfire. Most minor-injury patients complete treatment within three weeks of an accident, and industry officials worry that setting an eight-week threshold could be read as a signal that treatment is acceptable up to that point.

"With private health insurance, once a cap was set on manual therapy sessions, some patients took it to mean that amount was guaranteed without additional scrutiny," an insurance industry official said. "There could be clinics that treat the eight-week rule as effectively a guaranteed treatment window."

Building the information infrastructure needed to detect fraud is also moving slowly. Insurers have limited access to hospitals' internal records. Industry officials have long argued that cross-referencing medical data held by the National Health Insurance Service and the Health Insurance Review and Assessment Service against insurer billing records could filter out a significant share of false and inflated claims.

The Financial Services Commission launched a task force in June to build an AI-based insurance fraud prevention system, with cross-verification of public and private data as a central goal. Two months on, however, no meaningful progress has been made.

"With so many agencies involved, it takes time to align interests," a financial regulatory official said. "As far as I know, there have been no visible results since the launch."


psj@heraldcorp.com