A media investigation in central China has revealed an alleged fraud involving several private psychiatric hospitals. These facilities allowed healthy people to abuse the public health insurance system.
An undercover report by Beijing News found that many patients at the institutions in Xiangyang, Hubei Province, did not show any abnormal behavior. They received little or no real treatment.
Healthy individuals said they agreed to stay because hospitals promised free admission and living expenses. In China’s healthcare system, patients typically pay a portion of their bills. Public insurance covers the rest.
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After admission, hospitals allegedly used patients’ identities to create false treatment records and claim insurance money.
Xiangyang, a city of about 5.3 million people, has more than 20 psychiatric hospitals, the most opened in recent years. When the reporter posed as a relative and contacted more than 10 centers, the staff allegedly said that patients would not be charged medical fees. They would only pay the minimum cost of living there.
“We hope your relative can live here for a long time. He can live here as long as he wants,” the South China Morning Post quoted the reporter as saying.
In early December, an undercover reporter joined Xiangyang Hongan Psychiatric Hospital as a nurse to investigate an alleged insurance fraud. The private hospital, which opened last summer, can accommodate about 50 patients.
According to the head nurse, most patients show no or only very mild psychological symptoms. Some senior residents in their 70s simply need physical care.
Staff reportedly treat them like nursing home residents because the facility is much cheaper than regular senior care centers.
Another nurse working with the reporter revealed that he himself was officially listed as a patient. His personal details were kept in the hospital records even though he did not need any medication or treatment.
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He was allowed to enter and leave the building freely. He pleaded guilty to cooperating with the hospital to defraud the public insurance authority.
Billing records showed that one patient who stayed for 90 days was charged 12,426 yuan ( ₹1.63 million). Only about 500 yuan ( ₹6,565) covered medicines. More than 6,000 yuan ( ₹78,000) was claimed for various medical treatments.
However, the patient said that he only took basic medications and never received these treatments. The findings raise serious questions about the oversight and misuse of public health funds in the region.
During the undercover investigation, the doctor told the reporter that the hospital’s medical equipment is very limited. Despite this, many institutions reportedly charge a daily treatment fee of about 130 yuan ( ₹1,706) to the public health insurance system.
Commission for bringing new patients
Staff admitted that keeping more patients for longer periods of time increased the hospital’s revenue. Employees also reportedly receive kickbacks of up to 1,000 yuan ( ₹13,000) for bringing in each new patient.
The reporter further witnessed the disturbing behavior of nurses who were seen slapping, kicking and hitting patients with water pipes. Similar suspicions of insurance fraud and physical abuse were reported at another nearby facility in Yichang.
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Cell phones were confiscated from patients and their contact with their families was strictly limited. Hospital workers allegedly tried to prevent patients from leaving.
“There are strict rules here. I don’t have freedom. I feel like I’ve been in prison for five years,” a patient staying at Yiling Hospital was quoted as saying to a SCMP reporter.