Joint Investigation on Insurance Fraud Uncovers 23.3 Billion KRW from 25 Medical Institutions

By type, falsification of accident details accounted for the largest amount at 15.2 billion won (65.1%)

[Asia Economy Reporter Sunmi Park] A joint investigation into insurance fraud uncovered a total amount of 23.3 billion KRW related to 25 medical institutions. The amount detected in public insurance was 15.9 billion KRW, which is twice the 7.4 billion KRW detected in private insurance.

On the 29th, the Financial Supervisory Service announced that last year’s joint investigation into insurance fraud uncovered a total amount of 23.3 billion KRW related to 25 medical institutions. Public insurance accounted for 15.9 billion KRW (68.1%) of the total amount, while private insurance was 7.4 billion KRW (31.9%). The higher amount in public insurance is attributed to numerous violations of medical-related laws, such as unqualified medical practice.

By type of insurance fraud, fabrication of accident details was the most common at 15.2 billion KRW (65.1%), followed by false hospitalization (7.3 billion KRW) and false diagnosis (700 million KRW). The most frequently detected type, fabrication of accident details, involved many cases where treatment names and contents were manipulated differently from reality to falsely claim insurance money.

The investigation found that 14 out of the 25 hospitals were related to indemnity insurance fraud, with the detected amount from these hospitals totaling 15.8 billion KRW, accounting for 68% of the total (23.3 billion KRW). Since unnecessary benefit payments related to indemnity insurance fraud could also increase the burden on public insurance, active measures are needed to eradicate related illegal activities.

It is also notable that 70% of false hospitalization insurance fraud cases (9 out of 13 institutions) occurred at Korean medicine hospitals and clinics (operated as office-managed hospitals). In particular, false hospitalization and excessive treatment for profit frequently occur at illegal medical institutions operated as ‘office-managed hospitals.’

For the first time, insurance fraud led by broker organizations disguised as legitimate corporate entities called ‘medical advertising corporations’ and conspiring with multiple hospitals was detected. The broker organizations made patient referral contracts disguised as promotional agency contracts with numerous hospitals and clinics (ophthalmology, plastic surgery, obstetrics and gynecology, Korean medicine clinics, etc.), illegally inducing and referring patients and conspiring in insurance fraud.

A Financial Supervisory Service official stated, "Based on this performance analysis, we will promptly proceed with the ongoing 50 investigations and continuously promote cooperation among related agencies." They added, "Furthermore, since the current scope of joint investigations is limited and full-scale investigations are difficult, creating ‘blind spots,’ we will actively discuss expanding insurance fraud information sharing among related agencies for swift and effective detection."

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