High-Value Manipulation and Underreporting of '170 Billion Won' Including Cardiovascular Stents

Multinational companies A and B were caught manipulating import prices at high levels while importing over 3,000 types of medical supplies, including cardiovascular stents, thereby fraudulently obtaining health insurance funds. These companies' high-priced reported transactions as well. Provided by Korea Customs Service

[Asia Economy (Daejeon) Reporter Jeong Il-woong] A multinational corporation was caught by customs authorities for inflating the declared value by approximately 170 billion KRW while importing cardiovascular stents (devices that expand narrowed blood vessels to aid blood flow) and other medical treatment materials.

On the 29th, the Busan Regional Customs Office of the Korea Customs Service announced that it had reported the well-known multinational company A to the prosecution for violating customs laws.

Company A is suspected of manipulating the import prices of cardiovascular stents and other treatment materials covered by health insurance to report inflated values.

The company exploited the fact that inflating the import prices of treatment materials allows maintaining high insurance reimbursement rates, thereby unlawfully obtaining health insurance funds over several years.

In 2019, the Busan Regional Customs Office also reported company B, which used a similar method to defraud health insurance funds, to the prosecution, and the trial is currently ongoing.

Both companies A and B are multinational corporations specializing in the domestic import and distribution of medical treatment materials. From 2015 to 2019, they imported over 3,000 types of treatment materials, declaring import prices on average 1.5 to 2 times higher than the actual prices (with a difference amounting to approximately 170 billion KRW).

Overview of Insurance Financial Losses Caused by Company A and Company B. Provided by the Korea Customs Service

In particular, these companies are investigated to have falsely entered into marketing service contracts with exporters headquartered overseas, inflated the prices of treatment materials during import, and then received the price difference afterward under the guise of marketing service fees.

However, the Busan Regional Customs Office explained that the scale of the illicit gains will be determined later based on adjustments to treatment material insurance reimbursement rates by the Health Insurance Review and Assessment Service, making it difficult to finalize the amount at this time.

A representative of the Busan Regional Customs Office stated, “We provided data on the high-priced imports of treatment materials by companies A and B to the Health Insurance Review and Assessment Service, the institution responsible for setting insurance reimbursement rates, which contributed to a reduction of approximately 14% in the insurance reimbursement rate for cardiovascular stents.” He added, “This is expected to lead to an annual health insurance fund savings effect of about 29.6 billion KRW.”

He further emphasized, “The Busan Regional Customs Office will continue to focus investigative resources on ‘public fund fraud through abuse of trade transactions’ and work closely with related agencies to prevent recurrence of cases like those involving companies A and B.”

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