Annual insurance fraud detections top W1tr as FSS, HIRA target hospitals

The Financial Supervisory Service and the Health Insurance Review and Assessment Service have joined forces to combat insurance fraud and fraudulent medical billing involving indemnity and auto insurance. The two agencies plan to link their respective claims and review data to catch insurance and medical crimes that have until now fallen through the cracks.

The FSS said Wednesday that FSS Governor Lee Chan-jin and HIRA President Hong Seung-kwon signed a memorandum of understanding on preventing fraudulent billing at medical institutions and eradicating insurance fraud at the FSS headquarters in Yeouido, Seoul. Ten officials from both agencies attended the signing ceremony, including FSS Deputy Governor Park Ji-sun, who oversees consumer affairs and insurance, and HIRA Standing Director of Review and Assessment Kim Ae-ryeon.

According to the FSS's insurance fraud detection figures, the total amount detected last year reached 1.16 trillion won ($860 million), with 105,743 people caught — up 6.9 billion won (0.6 percent) in amount but down 3,245 people (3.0 percent) in headcount from the previous year. The diverging trends — rising amounts, falling numbers — point to a pattern of larger individual fraud cases, with the average amount per case growing.

The MOU comes as persistent insurance fraud involving indemnity and auto insurance, along with fraudulent billing by medical institutions, has heightened concerns about financial leakage from both public and private insurance programs. The FSS determined it needed to build a close cooperation framework with HIRA, which promotes appropriate medical care through national health insurance reviews.

The MOU covers three main areas: strengthening information sharing to detect insurance and medical crimes, building a sustained cooperation framework to prevent financial leakage from public and private insurance programs, and promoting the exchange of expertise to enhance institutional capabilities.

Under the agreement, the two agencies will share suspected cases of fraudulent billing under national health insurance and auto insurance, as well as potential insurance fraud cases. They plan to analyze and review claims data to identify signs of fraud and swiftly detect medical institutions submitting improper claims.

The agencies will also use claims and payment data from indemnity and auto insurance to jointly respond to red flags such as excessive treatment. They discussed strengthening monitoring of hospitals and clinics that violate standards governing auto insurance medical fees, and creating conditions to secure stable funding for review operations.

Alongside this, the two agencies agreed to exchange expertise and personnel in areas including insurance fraud, auto insurance review, and fraudulent benefit claims, and to share jointly produced online and offline public awareness materials on insurance and medical crime prevention.

"We will maximize synergies between our agencies by actively sharing information with HIRA, which works to promote appropriate medical care, and jointly responding to red flags such as excessive non-covered treatment under indemnity insurance," FSS Governor Lee said. "For medical institutions suspected of fraudulent auto insurance billing, we will closely examine the possibility of insurance fraud and, when grounds are found, promptly refer them for investigation to make an example of them."

HIRA President Hong said the MOU was "a very meaningful first step toward jointly confronting illegal activity that threatens the soundness of public and private insurance and building a healthcare and financial environment that the public can trust." He added that the two agencies would share information on insurance fraud and fraudulent billing more closely and build a strong cooperation framework to prevent financial leakage from public and private insurance programs.

The two agencies plan to operate a working-level consultative body to implement the MOU and monitor progress. The FSS said it expects the partnership to "build a tight detection network for insurance and medical crimes by linking and analyzing data held by both agencies, minimizing financial leakage from indemnity and auto insurance."