Audit Reveals Massive Fraud in Health Insurance Claims in South Korea
A recent audit by the Board of Audit and Inspection of Korea has uncovered alarming statistics regarding health insurance claims. Over the past five years, patients have submitted approximately 51.83 million claims to health insurance companies using incorrect diagnoses, resulting in payouts totaling around 10.6 trillion won. Additionally, it was found that individuals who frequently visited medical facilities and exceeded their annual out-of-pocket maximums received double reimbursements from both health insurance and private insurance, amounting to 858 billion won in the last four years alone. Preventing such double payments could save each policyholder about 6,400 won annually.
The audit report, titled 'Utilization of Health, Private, and Auto Insurance Services,' indicates that private insurance policyholders are placing a significant financial burden on the national health insurance system. An analysis of nearly 1 billion claims from 2018 to 2022 revealed that those enrolled in both health and private insurance visited medical facilities an average of 2.33 days more per year than those with only health insurance, leading to an additional 12.94 trillion won in medical expenses, of which 3.83 trillion won was covered by health insurance.
Furthermore, the audit examined over 111.46 million medical claims and found that 46.5% of the time, the diagnosis reported by medical facilities did not match the diagnosis submitted by patients to their insurance companies. This discrepancy suggests that many patients falsely reported different illnesses to receive insurance payouts.
The audit also highlighted that a significant number of patients concealed pre-existing conditions, such as hypertension and diabetes, when enrolling in private insurance. Out of 2.48 million patients diagnosed with these conditions, 96% did not disclose their illnesses to their insurers. These individuals received 523.2 billion won in claims for treatments related to their pre-existing conditions, along with 181.4 billion won for treatments not covered by their policies.
Additionally, there were numerous cases where both patients and medical facilities appeared to collude in fraudulent activities. In 7.3 million instances, patients received insurance payouts while the medical facilities failed to report these treatments to health insurance, resulting in unpaid claims totaling 22.47 trillion won. Some of these cases involved cosmetic surgery clinics providing services that were misrepresented as legitimate medical treatments.
