[Bottomless Jar 'Hanbang Hospital' Part 2] Outdated 'Car Insurance Fees'... Led to Over-treatment (Comprehensive)

Unlike Advanced Countries, Health Insurance Fees and Dual System Cause Confusion
Lack of Standardized Treatment and Clinical Guidelines... System Support Needed
Growing Need for Collaboration Among Insurance Industry, Ministry of Land, and Health Insurance Review & Assessment Service

[Editor's Note] The 31st confirmed case (female, 61), presumed to have a significant epidemiological link to the spread of the Shincheonji Church of Jesus in the novel coronavirus disease (COVID-19), visited a church located in Nam-gu, Daegu, four times before and after the onset of symptoms. Although she was hospitalized for treatment at a Korean medicine hospital due to a traffic accident on the 7th, it was confirmed that she frequently left the hospital to visit the church and hotels. This incident has brought to light the poor management of Korean medicine hospitals regarding "malingerers," a long-standing headache for the insurance industry. Korean medicine hospitals have been known for easy admissions and lax management, often cited as major contributors to insurers' worsening loss ratios due to excessive treatment. Experts point out that if the management system of Korean medicine hospitals had functioned properly, the spread of COVID-19 could have been largely controlled. This article analyzes the issues of excessive treatment in Korean medicine hospitals and explores possible solutions through this case.

[Asia Economy Reporter Oh Hyung-gil] Self-employed individual Choi Mun-seok (51, pseudonym) received 94 outpatient treatments at a Korean medicine hospital from November 2017 to February last year due to a traffic accident. Although the car repair cost was a minor 540,000 KRW, the total medical expenses covered by his automobile insurance reached 6.5 million KRW. The Korean medicine hospital reduced the number of outpatient visits per month for Choi while extending the treatment period over a long time. They also explained to other patients that at least 4 to 5 months of treatment were necessary, thereby inducing excessive treatment. An investigation by insurance companies revealed that this hospital operated on a large scale, accommodating about 25% of traffic accident patients in the area.

Korean medicine hospitals, which significantly impact the sharp increase in automobile insurance loss ratios, have become hotbeds of insurance fraud. Illegal medical practices such as false patient recruitment and excessive treatment by some hospitals are shaking the foundation of the insurance system.

Under medical law, only doctors can prescribe physical therapy or manual therapy, but there are many nominal co-treatment cases where doctors who received prescriptions from Korean medicine doctors input them without diagnosis. This is a clear illegal medical act directly linked to insurance fraud. Experts agree that clarifying the automobile insurance treatment fee standards is essential to prevent excessive treatment.

According to the Financial Supervisory Service's Insurance Fraud Prevention Center on the 27th, the amount detected for insurance fraud due to false (excessive) hospitalization reached 100.2 billion KRW, accounting for 12.6% of the total amount, highlighting the severity. Experts emphasize that institutional support, such as concretely establishing the 'automobile insurance treatment fee (automobile insurance fee)' standards, is essential to reduce excessive treatment in Korean medicine hospitals.

Currently, Korea's automobile insurance fees are dualized and separate from health insurance fees, unlike major advanced countries. The automobile insurance fee standards are determined by the Ministry of Land, Infrastructure and Transport (MOLIT), which delegates the review of treatment fees to the Health Insurance Review and Assessment Service (HIRA). There is criticism that the authority to decide fee standards lies with MOLIT, which lacks medical expertise, making it inadequate.

Unlike Western medicine, the lack of medical standardization or clinical guidelines is also cited as a problem in Korean medicine. Therefore, even if Korean medicine hospitals mainly provide non-reimbursable items, there are no preventive measures in place beforehand, effectively allowing excessive treatment.

In contrast, major countries determine automobile insurance fees based on health insurance. This approach focuses more on treating the victim's injuries rather than the cause of the accident, stemming from the principle that treatment should primarily be covered by health insurance.

In the United States, automobile insurance treatment fees and health insurance treatment fees are operated identically. There is no separate medical fee for traffic accidents. This allows for non-discriminatory treatment between public and private insurance. Additionally, the UK, Canada, and Australia cover all medical expenses under their National Health Service systems, with automobile insurers paying a certain share of these costs.

In other words, major countries pay for traffic accident patients' treatment costs through the state and exercise subrogation rights against insurance companies when necessary, whereas in Korea, insurers pay medical institutions directly. This results in a lack of institutional mechanisms to prevent excessive treatment midway.

Therefore, collaboration among not only the insurance industry but also MOLIT and HIRA is becoming increasingly important. The non-life insurance industry has proposed to the government the need to establish detailed review guidelines for Korean medicine treatment items, which currently lack sufficient review standards, and has requested improvements in the timing of treatment fee access.

To improve the treatment fee review process, MOLIT recently amended the 'Regulations on the Handling of Automobile Insurance Treatment Fee Review Work.' The main content is to establish an automobile insurance fee review committee within HIRA to prepare fee guidelines. This aims to secure medical expertise and fairness in automobile insurance treatment fee reviews and ensure consistent assessments. HIRA is also developing review indicators to enhance the efficiency of automobile insurance treatment fee review work.

A MOLIT official said, "Automobile insurance treatment fees are operated following health insurance treatment fees, but it is expected to take time to establish Korean medicine medical fees. Before that, we plan to operate a committee to promote more systematic automobile insurance fee reviews."

Song Yoon-ah, a research fellow at the Korea Insurance Research Institute, pointed out, "It is difficult to objectively prove minor injuries and treatment completion in minor accidents, so treatment fee standards that consider this are necessary. While specifying fee standards for Korean medicine treatment, guidelines for concurrent treatment with Western and Korean medicine are also needed."

This content was produced with the assistance of AI translation services.