• Hospitals enlist healthy individuals as “patients” to defraud insurance
• Authorities launch official probe after large-scale fraud uncovered

Recent investigations in China have exposed fraudulent practices at several private psychiatric hospitals, where healthy people are registered as patients to obtain funds from the public health insurance system.

An undercover report by local media revealed that most patients in these facilities in Xiangyang, Hubei province, show no unusual behavior and receive minimal or no treatment.

Sources involved in the investigation said they were persuaded to stay at the hospitals under promises of “free accommodation.”

Under Chinese law, patients pay a portion of medical bills, while public insurance covers the remainder.

The report added that hospitals exploit patients’ personal information and fabricate medical reports to claim insurance payouts, turning these individuals into a steady source of revenue.

Xiangyang has more than 20 psychiatric hospitals, most of them established in recent years, in a city with a population of 5.3 million.

When the undercover reporter inquired at over 10 hospitals, all confirmed that patient expenses were minimal, usually limited to living costs only.

During the investigation, the reporter worked as a nurse at Hongan Psychiatric Hospital, which houses about 50 patients, most showing very mild or no symptoms.

A nurse explained that some elderly patients cannot move independently and rely entirely on hospital care, noting that the facility is cheaper than conventional nursing homes.

The reporter observed that the hospital billing system recorded large sums for “treatment,” while in reality patients received only basic medication with no actual procedures performed.

He also reported that some nurses physically abused patients—hitting and kicking them—restricted contact with their families, and tried to prevent them from leaving the hospital.

Medical reform experts noted that the closed nature of these hospitals, combined with patients’ limited ability to evaluate their care, enables insurance fraud. The report has sparked widespread outrage on social media, with millions viewing the details of the scandal.

Health authorities in Xiangyang and Yichang have announced that they have launched an official investigation into the violations.