Fraudulent national health insurance claims from non-covered treatments reach W23.75b over 5 years

When a patient surnamed A visited an internal medicine clinic to recover from a hangover, he received a nutritional IV drip and paid less than expected. "The hospital said it would be covered by national health insurance, so the treatment ended up being cheaper than I thought," he said.

Amid growing concerns over fraudulent national health insurance billing tied to non-covered treatments such as nutritional IV drips, the total amount caught over roughly the past five years has reached 23.75 billion won ($17.5 million). More than 1,100 medical institutions were flagged during the same period.

With institutions being caught for fraudulent billing two or more times within five years — a pattern that recurs every year — calls are mounting for tighter oversight to stop the drain on national health insurance finances.

An analysis of data obtained from the Ministry of Health and Welfare by Democratic Party of Korea lawmaker Kim Kyo-heung found that from 2021 through August this year, a total of 1,137 medical institutions were caught billing national health insurance for treatments that fall outside coverage. The fraudulent claims from those institutions totaled 23.75 billion won.

The violations have been detected every year without exception. By year, 160 institutions were caught in 2021 for 2.71 billion won; 151 for 2.58 billion won in 2022; 171 for 5.98 billion won in 2023; 338 for 6.13 billion won in 2024; and 209 for 4.19 billion won last year. So far this year through August, fraudulent claims of 2.16 billion won have been confirmed at 108 institutions.

One common scheme involves administering a simple nutritional IV drip for fatigue recovery, then billing national health insurance by listing a covered diagnosis — such as acute gastroenteritis or severe dehydration — on the claim form.

However, the Ministry of Health and Welfare said it can identify cases where national health insurance was billed after a non-covered treatment, but cannot separately calculate fraudulent claims broken down by specific diagnosis. The 23.75 billion won figure therefore covers all fraudulent billing of national health insurance following non-covered treatments — not nutritional IV drips alone.

The scale grows considerably when all types of fraudulent national health insurance claims are included. Of the 3,543 medical institutions the ministry investigated on-site from 2021 through August this year, 3,004 were found to have submitted fraudulent claims totaling 138.88 billion won.

The methods varied widely. Investigators uncovered "false claims" — fabricating or falsifying documents to make it appear that treatment was provided when it was not — as well as billing that violated national health insurance calculation standards, and "substitution claims" in which the drugs or medical supplies actually used differed from what was billed. Cases were also found where clinics charged patients out-of-pocket for treatments that should have been covered, collecting excessive co-payments.

Some individual institutions ran up fraudulent claims exceeding 1 billion won. One clinic was found in 2022 to have submitted 2.77 billion won in fraudulent claims, the entire amount classified as false billing.

Many institutions were caught again after an initial detection. A simple tally shows that 126 institutions were flagged two or more times within five years in ministry on-site investigations, making them subject to enhanced penalties. The total fraudulent amount confirmed at those institutions over the same period came to 6.61 billion won.

Fraudulent billing was also widespread among clinic-level providers. From 2021 through August this year, 2,183 clinic-level institutions were found to have submitted fraudulent claims totaling 82.22 billion won. Dental clinics accounted for the largest share, at 32.06 billion won.

"National health insurance finances are being seriously drained by the moral hazard and deceptive and false billing of some medical institutions," Kim said. "Particularly for institutions that repeatedly engage in fraudulent billing, we need to fundamentally reassess the effectiveness of current sanctions and put in place measures to prevent fiscal drain at the root."