Five indicted for insurance fraud

A contractor and four employees of a township clinic in Jiangsu Province have been indicted for gaming Shanghai medical insurance centers out of about 1 million yuan ($163,400) with phony claims, local media reported Wednesday.

The Shanghai Zhabei District Prosecutor's Office charged the primary defendant, Li Chenghua, who worked as a contractor for a clinic in Taixing, Jiangsu Province, and four others with fraud, according to the report in the Wenhui Daily.

Prosecutors accused the five suspects of forging documents to help 42 residents of Taixing get reimbursed for medical care they never received, the report said.

Although the residents involved in the case lived in Jiangsu, they were all covered by Shanghai's government-run health insurance system thanks to a program that gives coverage to retired workers who live outside the city.

The residents, now in their 70s, 80s and 90s, had all worked in Shanghai in the 1950s, the report said. Their insurance allows them to get reimbursed for medical care they receive in their hometown as long as they submit documentation to Shanghai insurance centers.

Li came up with the idea to recruit these people to submit false insurance claims in 2007, when his clinic was having serious financial difficulties, the report said. He asked one of the clinic's doctors to persuade patients with Shanghai medical insurance to participate in the scam. Two doctors forged the medical records and a cashier handled the medical expense lists and receipts.

The five suspects ran the scam from 2008 to 2012, usually making small claims.

They made 2,000 yuan to 3,000 yuan for every 10,000 yuan in reimbursements, the report said.

The suspects got reported in June 2012 after one medical insurance center found a phony receipt among the clinic's claims and called the police.

Phony claims can be difficult to identify, especially if they are for small amounts, said an employee surnamed Wang with the Shanghai Jing'an District Medical Insurance Center.

From December 2001 to the end of 2011, the Shanghai Medical Insurance Monitoring Center has dealt with 50 similar fraud cases involving 300 million yuan, the Wenhui Daily reported.

Besides fraudulent claims, people also abuse the insurance system by lending their medical insurance cards to others for a fee, said an employee surnamed Liu with the Shanghai Medical Insurance Monitoring Center.

From 2009 to 2011, the center had reclaimed 5.45 million yuan from swindlers who made money by lending their insurance cards to others at clinics and pharmacies, according to a report on the news website xinhua.cn.