Received 20 Million Won Insurance Payout After Cataract Surgery... Financial Authorities Warn of "Moral Hazard"

Excessive Charges for Examination and Lens Fees
Increased by 40% Over 5 Years to 690,000 Cases
Insurance Payments 779.2 Billion Won... Up 354%

[Asia Economy Reporter Oh Hyung-gil] Choi Jeong-geun (52, pseudonym), who incurred private loan debt while gambling at an illegal gambling house, received a proposal that he could repay his debt if he underwent cataract surgery at a hospital introduced by a violent organization. The suggestion was to receive the cataract surgery insurance payout from the insurance policy Choi had subscribed to in order to reduce his debt. Recently, an insurance company, suspicious of the increase in cataract surgery insurance claims at a specific hospital, launched an investigation and found that violent organizations, brokers, and hospitals had been committing insurance fraud in the same manner.

As the number of cataract patients has surged recently, cases of insurance fraud exploiting cataract surgeries have increased, prompting financial authorities to issue warnings to insurance companies.

According to the insurance industry on the 7th, the Financial Supervisory Service recently sent an official letter to insurance companies urging them to pay close attention to contract reviews and related tasks to prevent insurance fraud related to cataracts.

Cataracts, a condition where the eye's lens becomes cloudy due to aging, causing blurred vision, can have its progression slowed in the early stages with medication, but surgery is the only treatment. Consequently, some hospitals frequently recommend early surgery and excessively charge for examination fees and lens costs.

The number of cataract surgeries increased by 40% over five years, from approximately 490,000 cases in 2015 to about 690,000 cases in 2019. Last year, insurance payouts for cataracts amounted to 779.2 billion KRW, a staggering 354% increase over the past five years.

The surgery involves removing the cloudy lens and inserting an artificial lens. The average cost for surgery on one eye is around 1 million KRW. Although the surgery is covered under a bundled payment system, some non-reimbursable items such as artificial lenses are exceptionally recognized, allowing hospitals to charge patients additionally.

Dependence on Specialist Diagnosis for Surgery Necessity... Difficult to Prove Insurance Fraud

Accordingly, moral hazard cases, where non-reimbursable items like examination fees or multifocal lens fees are increased to excessively inflate surgery costs, have occurred repeatedly, drawing close attention from financial authorities.

Among approximately 446,000 recipients of cataract surgery insurance payouts over the past five years, 17,625 (3.8%) have a history of insurance fraud. Reports of suspected insurance fraud related to cataract surgeries were 39 cases in 2018, 32 cases in 2019, and increased to 69 cases last year alone.

There were many cases of duplicate insurance claims. The number of insured persons who received duplicate payments was 186,836, and those who received three or more duplicate payments reached 53,892. The number of people who received over 10 million KRW in surgery insurance payouts was 15,232, and those who received over 20 million KRW numbered 4,171. Since it is rare for cataract surgery costs to exceed 10 million KRW even in expensive cases, these figures raise suspicions of overcharging.

An insurance industry official pointed out, "Not only through indemnity insurance but also through surgical riders, some exploit the system to receive insurance payouts exceeding their out-of-pocket expenses," adding, "Because the necessity of surgery is diagnosed by specialists, it is also difficult to prove insurance fraud."

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