The National Healthcare Security Administration ordered a nationwide crackdown late Wednesday on the fraudulent use of medical insurance funds at psychiatric institutions.

Photo via China Daily

The directive follows a media investigation that exposed how several private psychiatric hospitals allegedly recruited individuals without legitimate psychiatric needs to siphon money from the State insurance system.

Provincial healthcare authorities have been directed to meet with the heads of all psychiatric hospitals — including psychiatric departments within general hospitals — by the end of this week. These meetings will emphasize relevant laws and policies, using recent cases from Hubei province as examples.

The NHSA also requires these institutions to immediately begin comprehensive self-inspections and address any misconduct. The focus will be on violations such as luring patients into unnecessary hospitalization, fabricating patient records and treatments, forging documents, and overcharging.

Institutions must submit written self-review reports and refund any improperly obtained funds by March 15, with provincial authorities compiling findings for the NHSA by the end of the month.

The administration announced that psychiatric institutions will be a key target for unannounced inspections this year. Facilities found of serious violations or failing to properly implement self-correction will face severe penalties, including potential referral to public security authorities for criminal investigation.

The crackdown follows action by Hubei provincial authorities, who announced earlier Wednesday the formation of a special task force to investigate allegations that hospitals lured patients — including the elderly — with offers of free long-term care to systematically bill the State insurance system.

The joint task force includes the province’s commission for discipline inspection, health commission, department of public security, and healthcare security administration.