Chinese authorities in Hubei province have initiated a sweeping investigation into multiple private psychiatric hospitals implicated in a sophisticated insurance fraud operation that exploited the national healthcare system. The probe follows explosive revelations that these institutions systematically recruited patients without legitimate medical needs to illegally drain public insurance funds.
According to official statements released Wednesday, a specialized task force comprising disciplinary inspection, health, public security, and healthcare security agencies has been assembled to conduct comprehensive investigations. The joint operation promises severe legal and disciplinary consequences for confirmed violations, emphasizing full accountability for those responsible.
The investigation was triggered by an extensive undercover report published by Beijing News, which uncovered widespread fraudulent practices at facilities including Hong’an Psychiatric Hospital in Xiangyang and Yiling Kangning Psychiatric Hospital in Yichang. Investigators documented how hospitals lured patients—particularly elderly individuals—with promises of completely free long-term care, then used their personal information to submit fabricated insurance claims for treatments either unnecessary or never administered.
The scheme operated through multiple fraudulent methods: hospital staff allegedly created false diagnoses for patients with minor issues like alcohol dependency, billed for high-cost treatments never performed, and even listed their own employees as hospitalized patients. Most remarkably, institutions implemented a ‘false discharge’ system—cycling patients through paper-only discharges and readmissions to avoid triggering insurance audits for prolonged stays.
In response to these findings, the National Healthcare Security Administration has mandated immediate self-inspections for all psychiatric institutions nationwide. Facilities must submit written review reports and return illicitly obtained funds by March 15. The administration further announced that psychiatric institutions will become priority targets for unannounced inspections throughout the year, with serious violations potentially leading to criminal investigations.