[Column] Surge in Office-Holder Hospitals... Health Insurance Corporation Should Introduce Special Investigators

[Asia Economy Reporter Oh Hyung-gil] The Ministry of Health and Welfare announced that it will implement a comprehensive plan in 2018 to eradicate illegally established medical institutions, commonly known as 'Samu-jang Hospitals.' This is because they have been identified as a major cause of health insurance financial leakage and have been continuously criticized for illegal activities such as excessive treatment and patient inducement, leading to unjustified medical fee claims.

However, the Ministry's scenario to eliminate Samu-jang Hospitals did not go as planned. Even after two years, these hospitals have become more rampant. Although there is a push to introduce a special judicial police officer system to crack down on illegal medical institutions like Samu-jang Hospitals, it is uncertain whether it will pass the 20th National Assembly.

Currently, the "Partial Amendment Act on the Duties and Scope of Special Judicial Police Officers" (hereinafter referred to as the Special Judicial Police Act), which grants judicial police authority to the National Health Insurance Service only for Samu-jang Hospitals and license-lending pharmacies, is pending in the Legislation and Judiciary Committee. If it is not processed in the upcoming extraordinary session of the National Assembly next month, it will inevitably be discarded. The bill will have to be reintroduced from the beginning in the 21st National Assembly.

Samu-jang Hospitals are considered a primary cause of severe financial leakage not only in health insurance but also in private insurances such as indemnity medical insurance and automobile insurance. In fact, the amount of damage caused by Samu-jang Hospitals and license-lending pharmacies to the health insurance finances last year alone reached 3.2267 trillion won. Samu-jang Hospitals are medical institutions illegally established by non-medical personnel who cannot open medical institutions, by hiring medical professionals or borrowing the name of medical corporations. Since they focus on profit, there is a high possibility of committing various illegal acts such as patient inducement and brokerage, false or unjustified billing, and excessive treatment.

So far, it has been difficult to detect actual cases due to the collusive relationship between Samu-jang and medical personnel, making external identification and evidence collection challenging. In particular, the National Health Insurance Service (NHIS) lacks investigative authority, making it impossible to track accounts and proving allegations limited, and direct investigation of related parties such as witnesses was not possible.

The NHIS argues that utilizing special judicial police officers will enable early elimination of such illegal medical institutions. Recovery after detection is also inadequate. During investigations, it is common for offenders to change names, disappear, or hide assets to evade capture. Last year, 129 Samu-jang Hospitals and 19 license-lending pharmacies were detected, and recovery decisions were made for 993.6 billion won, but the collection rate was only 2.42%.

Eradicating Samu-jang Hospitals is essential to prevent waste of taxpayers' money. Strengthening crackdowns on illegal medical institutions can reduce the loss ratio of indemnity medical insurance and lessen the consumer burden caused by premium increases. This is why attention is focused on whether the Special Judicial Police Act will be processed in the extraordinary session of the National Assembly.

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