[Exclusive] "Full Indemnity Insurance Coverage" Hospitals Push Fat-Derived Knee Injection Admissions with Excessive Propofol... Patients Hit with Huge Bills

'Fat-derived' Knee Injections Surge After 'Bone Marrow' Is Restricted
Insurance Payouts for New 'Fat-derived Knee Injections' Jump 91% in Six Months
Hospitals Say "Hospitalization Is Necessary" vs. Insurers Say "Outpatient Only"
Insurance Claim Denials Increase Patient Medical Burden

Editor's NoteThe rapid adoption of cutting-edge medical technologies, including new medical technologies and advanced regenerative medicine, has become a major topic in the medical community. There are high expectations that technological advancements in stem cells, gene therapy, and artificial intelligence (AI) will open new breakthroughs for treating rare, severe, and intractable diseases. The government is also significantly improving access to these technologies in clinical settings through new policies. However, where there is light, there is also shadow. Some medical institutions are increasingly promoting expensive treatments using unproven technologies or encouraging patients to file claims for indemnity insurance. Patients, driven by a desperate desire to recover, opt for these advanced medical technologies, but this trend is accompanied by side effects such as excessive medical billing and the deterioration of insurance finances. This ultimately leads to higher insurance premiums for the majority of honest policyholders. The government’s reform measures for non-reimbursed treatments and indemnity insurance, announced earlier this year, are insufficient to address these issues. Asia Economy has investigated the realities of the medical field surrounding advanced medical technologies and sought potential solutions.

Kim Mija (67, pseudonym), who had long suffered from knee problems, decided to get a stem cell injection for her knee after seeing an online advertisement. In February, Kim visited Hospital A in Gangnam-gu, Seoul, for a consultation. Hospital A recommended a fat-derived knee injection, presenting it as a new medical technology. Although Kim was burdened by the high cost of 7 million won, she was told that this was a more advanced technique than bone marrow knee injections and that she could claim indemnity insurance. Based on this advice, she was hospitalized and received the fat-derived knee injection.

As 'bone marrow' falls out of favor, 'fat-derived' knee injections surge in popularity

In recent years, following bone marrow knee injections?which have caused significant leakage in indemnity insurance payouts as a major non-reimbursed treatment?fat-derived knee injections have rapidly emerged. The fat-derived knee injection involves harvesting fat from the abdomen or buttocks of patients with knee osteoarthritis, extracting stromal vascular fraction (SVF), a mixture of stem and regenerative cells, and injecting it into the knee joint cavity. Like bone marrow knee injections, this stem cell injection was recognized as a new medical technology by the Ministry of Health and Welfare in June last year.

According to data obtained by Asia Economy through Democratic Party lawmaker Lee Jeongmun, indemnity insurance payouts for fat-derived knee injections by ten domestic non-life insurers (Samsung, DB, Hyundai, KB, Meritz, Hanwha, Lotte, Heungkuk, NH Nonghyup, and MG) surged by 91.3%, from 230 million won in the second half of last year (immediately after the procedure was recognized as a new medical technology) to 440 million won in the first half of this year. During this period, the number of claims increased by 49%, from 114 to 170 cases. Although only a small number of hospitals currently offer fat-derived knee injections, and the total payout remains limited, there are growing concerns that, as more hospitals and clinics adopt this procedure, it could become the next bone marrow knee injection.

The recent rise of fat-derived knee injections is largely because bone marrow knee injections can no longer be used as a lucrative non-reimbursed business. Bone marrow knee injections were recognized as a new medical technology by the Ministry of Health and Welfare in July 2023. The price per injection varies widely by hospital, from 1 million to as much as 20 million won. Since the outpatient indemnity insurance limit is only 200,000 to 300,000 won, the procedure was typically performed during hospitalization, where the limit increases to 50 million won.

Using this method, not only orthopedic and rehabilitation medicine departments but also ophthalmology and Korean medicine hospitals began offering bone marrow knee injections. Some hospitals even manipulated medical records to classify outpatient procedures as inpatient ones. However, as insurers have recently secured medical evidence that "hospitalization is generally unnecessary for this procedure except in special cases," insurance payouts for inpatient procedures are now largely being denied. After bone marrow knee injections were designated as a new medical technology, payouts from nine non-life insurers (excluding KB Insurance) doubled from 11.44 billion won in the second half of 2023 to 23.63 billion won in the first half of last year. However, payouts dropped to 6.12 billion won in the second half of last year and further to 2.5 billion won in the first half of this year.

Excessive propofol administration to induce hospitalization... Why fat-derived knee injections are on the rise

From the hospital’s perspective, fat-derived knee injections make it easier to justify hospitalization compared to bone marrow knee injections. Ensuring hospitalization is crucial for smooth indemnity insurance processing for expensive non-reimbursed treatments, which in turn helps attract more patients. Hospitals argue that hospitalization is necessary for fat-derived knee injections because, unlike bone marrow knee injections performed under local anesthesia, fat harvesting requires sedation anesthesia equivalent to general anesthesia.

However, it has been found that some hospitals are inducing hospitalization by excessively administering propofol, a general anesthetic, to patients. Jeong Sunrae (72, pseudonym), who suffered from arthritis, visited Hospital B in Seoul last July on the recommendation of an acquaintance. Hospital B suggested knee surgery and hospitalization for a fat-derived knee injection, assuring her that indemnity insurance would cover the costs. During the procedure, Hospital B administered 400 mg of propofol for sedation and harvested 400 cc of fat.

Insurance company C considered Hospital B’s fat harvesting method unusual and consulted higher-level medical institutions. Four medical departments?including anesthesiology, orthopedics, and plastic surgery?responded that "the amount of propofol used was excessive." Hospital B’s administration of propofol was outside the safety standards set by the Ministry of Food and Drug Safety. According to these standards, for adults under 55, 1.5?2.5 mg of propofol per kg of body weight is recommended for induction of general anesthesia, and 4?12 mg/hr per kg for maintenance. A university hospital consultant commissioned by Insurance company C stated, "For this patient, who weighs 46 kg, the permissible propofol dosage is 27?322 mg, so 400 mg is excessive," adding, "Since the patient is 72 years old?older than the guideline’s reference age of 55?and most physiological functions decline after age 70, propofol use should have been even more strictly controlled." Hospital B consistently administered 400 mg of propofol regardless of the patient’s weight or age.

There is also medical evidence that the amount of fat harvested by Hospital B does not justify hospitalization. According to "Plastic Surgery," authored by Kang Jinseong, former director of Dongsan Medical Center and a senior figure in Korean plastic surgery, up to 2,000 cc of fat can be harvested on an outpatient basis, and more than 3,000 cc warrants hospitalization under sedation anesthesia. Overseas guidelines also allow up to 5,000 cc of fat to be harvested under local anesthesia. A representative of Insurance company C said, "Hospital B administered more than the appropriate amount of propofol for harvesting just 400 cc of fat, raising concerns primarily about patient safety."

Hospital B cites the guidelines issued by the Korean Society of Anesthesiology and Pain Medicine in September last year as the basis for the necessity of hospitalization. The society stated that "after sedation anesthesia for fat tissue harvesting for stem cell therapy, observation for at least six hours is recommended, and hospitalization may be necessary in some cases." However, a representative of Insurance company C countered, "This does not mean that hospitalization is always required," and criticized Hospital B for promoting the procedure as if hospitalization is essential. There are no separate Ministry of Health and Welfare guidelines on anesthesia methods for fat-derived knee injections.

In the end, Insurance company C only paid 2.27 million won for surgery, excluding the fat-derived knee injection procedure, out of the 9.12 million won indemnity insurance claim filed by Jeong. Jeong, who underwent the procedure believing the hospital’s assurance that the entire amount would be covered by indemnity insurance, was left with a significant financial burden.