A private hospital in eastern China is under investigation for medical insurance fraud after it promoted weeklong inpatient treatments for seniors for just 100 yuan ($15), local media reported Monday. Patients’ families have since accused the hospital of fleecing public health insurance funds.

The low-cost package advertised by Huai’an Renji Hospital in Jiangsu province included medical checks, daily IV drips, a chest X-ray, and three meals per day — and dozens of elderly patients accepted the offer. When a reporter affiliated with Jiangsu Broadcasting Corporation visited the hospital earlier this month, one ward had seven beds packed into less than 20 square meters.

An old man surnamed Gao, who had recovered from a lack of blood flow to the brain last year, told the reporter that he had voluntarily signed up for a one-week treatment that had cost him 100 yuan. But his son, who worked outside the city, became suspicious when he heard that the hospital had held onto his father’s ID and health insurance cards during his stay.

While ordinarily patients receive a final bill when they check out, Huai’an Renji Hospital refused to disclose how much had been charged to Gao’s insurance. According to employees at the local medical insurance fund management center, Gao’s treatment should have cost him 1,142 yuan out-of-pocket, as more than 3,500 yuan was covered by his public health insurance.

Figures from 2015 show that across Jiangsu province, cooperative insurance for rural residents like Gao reimbursed 75 percent of hospital expenses, on average.

Gao did not know which medicines he was given, but he believed he was getting a good deal. Other seniors felt the same. In an interview with the reporter, one man speculated: “This hospital isn’t making money from individuals; they’re earning it from medical insurance. It’s the state’s money.”

Zhu Hongwei, director of the Huai’an District Medical Insurance Fund Management Center, told the reporter that it was too early to determine whether the case was insurance fraud or simply a special promotion in which the hospital was absorbing any additional costs. However, in 2017 the center uncovered 51 cases at the hospital that violated health insurance reimbursement regulations.

The center has opened a new investigation into Huai’an Renji Hospital but could not be reached for comment on Tuesday.

The last few months have seen several cases of health insurance fraud in China. In December, two men were detained in the central province of Hunan for defrauding state coffers to the tune of nearly 9 million yuan by forging patients’ medical histories and prescriptions. Later that month, four people from a private hospital in the northeastern province of Jilin were sentenced to prison terms ranging from one year and 10 months to 10 years and six months for similar crimes. They were also fined a total of 80,000 yuan.

Xu Yucai, a medical reform expert, told Sixth Tone that private hospitals have faced management challenges due to high property rental costs, huge expenditures on equipment, and talent shortages. Under such pressures, some exploit the state’s health insurance funds.

“One problem is that hospitals overtreat patients, hospitalizing them when it isn’t necessary,” Xu said. “That’s a huge waste of medical insurance.”

According to a 2016 commentary published by financial news outlet Caixin, some provinces and regions had already found their public health insurance funds depleted by 2014. A report released by Huazhong University of Science and Technology in 2015 predicted that China could face a deficit of 735 billion yuan in its public health insurance funds for city-dwellers by 2024.

Xu urged every level of government to strengthen supervision over public health insurance, and to improve the transparency of information-sharing between provinces. In 2014, the Standing Committee of the National People’s Congress clarified that swindling social welfare systems could be penalized as a crime, with offenders facing sentences of up to life imprisonment.

Editor: Qian Jinghua.

(Header image: Elderly people rest in their wheelchairs at a nursing home in Beijing, March 22, 2012. Yin Yafei/VCG)