China is ramping up its efforts to combat organized criminal networks involved in medical insurance fraud, a growing threat to the integrity of the healthcare system. This crackdown underscores the country’s commitment to enhancing oversight and control of medical funds, though experts suggest further policy enforcement and implementation are needed across all levels of medical regulation.
In a recent major operation, authorities seized nearly 30 tons of medication illegally acquired by a criminal gang. According to China Central Television (CCTV), the gang engaged in fraudulent activities by borrowing or persuading others to use their medical insurance cards to obtain drugs from various community health centers.
Additionally, another crackdown resulted in the confiscation of 105 medical insurance cards and over 10,000 boxes of assorted medications. These criminals exploited the medical insurance system to acquire large quantities of medication, which they then resold at higher prices for profit.
The latest data for 2021-23 reveals that medical insurance fraud is increasingly committed by a wide array of perpetrators, including insured individuals and their relatives, professional fraud rings, designated medical institutions, retail pharmacies, and occasionally drug manufacturing companies. Notably, insured persons were involved in nearly 55% of these cases, accounting for more than half of the total fraud cases.
Industry insiders suggest that upgrading the national medicine supply security code could improve transparency and accountability in the distribution process. They advocate for the involvement of multiple departments—such as commerce, tax, and medicine—in supervising the entire drug supply chain to prevent fraud.
In 2023 alone, China’s medical insurance authorities inspected 802,000 designated medical institutions and discovered violations in 451,000 of them, as reported by the National Healthcare Security Administration in July. This extensive review highlights the scale of the problem and the need for comprehensive measures to address and prevent medical insurance fraud.
