[2020 National Audit] "Recovery Rate of Funds from Office-Holder Hospitals Only 5.19%"

[Asia Economy Reporter Hyun-ui Cho] Since last year, the number of illegally established institutions such as office-managed hospitals caught has reached 1,610, but the collection rate of recovered funds is only 5.19%.

According to the 'Status of Crackdown on Illegally Established Institutions' submitted by the National Health Insurance Service to Jeong Chun-sook, a member of the National Assembly Health and Welfare Committee from the Democratic Party of Korea, a total of 1,610 illegally established institutions were caught and the decided recovery amount of medical benefit costs from last year to August 31 this year is 3.3527 trillion KRW. Among these, the amount actually collected by the Service is about 173.9 billion KRW, resulting in a collection rate of only 5.19%.

Despite continuous crackdowns by the government and the National Health Insurance Service, illegally established institutions have become increasingly sophisticated and intelligent in their methods, making eradication difficult. Additionally, the investigation period by frontline investigative agencies takes an average of 11 months, making the collection of recovered funds challenging.

Illegally established institutions, commonly referred to as 'office-managed hospitals,' include office-managed hospitals and license-lending pharmacies (mendae pharmacies). Operating for profit rather than patient treatment, they are pointed out as the main cause of damage to sound medical order and leakage of health insurance finances through various illegal activities such as excessive treatment and fraudulent claims.

In particular, issues such as illegal expansions, inadequate fire safety facilities, as well as overcrowded beds and shortage of medical personnel, lower the quality of medical services and threaten public safety and lives.

To eradicate illegally established institutions, Assemblywoman Jeong proposed a revision to the 'Act on Persons Performing Duties as Judicial Police Officers and Their Scope of Duties' on August 18, allowing employees of the National Health Insurance Service, who are responsible for health insurance benefit management and payment, to exercise special judicial police authority specifically for crimes related to office-managed hospitals and illegally established pharmacies.

Assemblywoman Jeong emphasized, "Illegally established institutions such as office-managed hospitals threaten patient safety and undermine the public nature of medical care," adding, "Special judicial police authority should be granted to the National Health Insurance Service to enable early crackdown on illegally established institutions and collection of recovered funds."