National Health Insurance Service opens two-month reporting period for unlicensed medical facilities; whistleblowers protected by law

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A non-medical operator identified as A borrowed a dentist's license to open and run a dental clinic, disguising it as a legitimate medical institution and fraudulently collecting about 500 million won ($361,000) in national health insurance reimbursements. He also impersonated a dentist and performed unlicensed medical procedures on patients thousands of times. When the scheme came to light, he attempted to forge the license and destroy evidence.

A licensed physician identified as B, fearing forced collection proceedings over unpaid taxes, borrowed another doctor's name to open a new hospital and ran it for a year, filing fraudulent claims by fabricating inpatient records. After the one-year arrangement ended, B leased the hospital space to a non-medical operator — a so-called "samu-jang," or administrative manager — in exchange for a fixed monthly cut of revenues. That operator ran the facility as an illegal samu-jang hospital and defrauded the National Health Insurance Service of about 3 billion won in reimbursements. The operator also concealed the criminal proceeds by drawing up a fictitious contract between the nominal license holder and B's wife.

Authorities are now moving to crack down on such illegal practices that drain national health insurance finances, starting with a campaign to encourage voluntary disclosures and offering whistleblowers rewards of up to 3 billion won.

The National Health Insurance Service said Monday it would run a two-month "intensive and voluntary reporting period for illegally established institutions" from Monday through Nov. 20.

Illegally established institutions refer to so-called samu-jang hospitals or license-lending pharmacies — facilities opened and operated under the name of a hired doctor or pharmacist by someone who has no legal right to establish a medical institution or pharmacy.

The service already operates a standing reporting center for suspected illegally established institutions and said it is running the intensive reporting period as part of the government's national policy agenda to transition to a sustainable healthcare system.

Tipsters can submit reports with specific details and supporting materials — including documents, photographs and bank transaction records — that reveal signs of illegal establishment. Each report will prompt a detailed on-site investigation.

When a whistleblower's report leads to a confirmed case of illegal establishment, a reward of up to 3 billion won will be paid based on the amount of improper payments recovered. The identities of whistleblowers and the contents of their reports are protected under the Public Interest Whistleblower Protection Act.

Those who participated in illegally establishing or operating such facilities may have their repayment obligations reduced if they come forward voluntarily, in accordance with relevant regulations. Reports can be submitted through the service's website, its mobile app or the Anti-Corruption and Civil Rights Commission.

"Eradicating illegally established institutions is a core task for protecting public safety and the fiscal health of national health insurance," said Kim Nam-hun, the service's standing executive director for benefits. "Through this intensive reporting period, we will actively uncover illegally established medical institutions, establish a sound medical order, and enhance the long-term sustainability of national health insurance finances."


thlee@heraldcorp.com