Scams reveal loopholes in rural medical system

Lack of an information-sharing network has bred fraud in China's rural health insurance system, and experts have called for stricter regulation and supervision to protect rural residents's rights and prevent misappropriation of their funds.

While hundreds of millions of rural Chinese benefit from the New Rural Cooperative Medical Scheme (NRCMS), which was initiated in 2003, scammers have been creating fake invoices and submitting them to the NRCMS managing center for reimbursement, siphoning huge sums of money out of the program.

As of 2012, the NRCMS had covered over 800 million people, or 98 percent of China's rural population. Under the program, every farmer is required to pay 60 yuan (about 10 US dollars) per year, after which 60 to 100 percent of their medical expenses will be reimbursed.

However, frequent fraud cases have been reported across the country over the past few years, indicating that scam groups have been taking advantage of loopholes in the health care system and raking in heavy gains.

FRAUD CHAIN

A group of more than 50 scam artists was recently busted in south China's Guangxi Zhuang Autonomous Region for 63 cases of fraud, from which they took in over 2.6 million yuan, according to local police.

The suspects were found to have illegally obtained the personal information of more than 60 rural residents in Guangxi, which they used to claim reimbursements from the NRCMS using fake invoices.

Earlier in June, officials with the NRCMS managing center of Anma Town,in Guangxi's Yizhou City, found a stack of invoices filled out by a local teacher, who claimed to have suffered from colonitis while in neighboring Guangdong Province and had medical treatment there, with total expenses of over 50,000 yuan.

However, the teacher was found to have no medical records at the alleged hospital in Guangdong. Meanwhile, similar fake invoices were found in other counties, which led to the discovery and detention of the defrauders, who were scattered in a dozen towns.

The teacher confessed to police that a man surnamed Wei, who was an employee at a local NRCMS managing center in Guangxi, provided these invoices to him, according to Zhou Xiaodong, captain of the Economic Investigation Detachment of Yizhou's Public Security Bureau. The teacher, in collusion with Wei, submitted the invoices and received reimbursement.

The lucrative payouts contributed to formation of a fraud chain led by Wei, who said he collected, bought or stole personal information from farmers and gave it to one of his associates, who was in charge of buying invoices.

"In each case, we spent between 1,000 to 3,000 yuan buying a set of invoices, gave 2,000 to 4,000 yuan to a farmer to get his or her personal information, and raked in profits of more than 15,000 yuan," Wei said.

Police said the quick money has attracted many others, and the number of scammers has sprung up in the region.