Prosecutors, police and welfare ministry task force launches first forced investigation into Gangnam 'illegally operated hospitals by a non-physician'

[Financial News] A government-wide joint investigation team made up of prosecutors, police and health authorities has launched its first forced investigation into suspected illegally operated hospitals by a non-physician in the Gangnam-gu, Seoul area.
According to the legal community on the 29th, the Seoul Western District Public Prosecutors' Office's joint task force on illegal medical and pharmaceutical crimes raided hospitals, clinics and related corporate offices in Sinsa-dong, Gangnam-gu, Seoul, and other areas for two days starting the previous day on suspicion of violating the Medical Service Act.
This is the first time the task force, launched in May, has carried out a forced on-site investigation. The search reportedly covered not only the medical facilities but also corporate offices linked to non-medical personnel suspected of actually running the hospitals. Additional investigators were also reportedly deployed for the operation.
The task force is said to have detected signs that non-medical personnel, who are not qualified to establish medical institutions, operated hospitals and clinics by borrowing the names of doctors and other medical professionals.
Through the raids, the task force reportedly secured contracts related to the establishment and operation of the hospitals, financial transaction records, accounting books and computer data. Based on those materials, it plans to focus on identifying who actually financed the hospital setup, where the profits were funneled and whether medical professionals lent their names.
Once the analysis of the seized materials is complete, investigators are expected to determine the specific roles of the non-medical personnel involved in operating the hospitals and the medical professionals who lent their names. The task force is also expected to widen its probe by checking whether other medical institutions in Seoul are being run in a similar way.
An illegally operated hospital by a non-physician is an unlawful medical institution in which a person without the legal qualifications to establish a medical facility borrows a medical professional's name to set up a hospital and then effectively controls personnel, finances and profit distribution.
It has been cited as a major cause of patient safety risks and leakage in the health insurance system, as it can lead to excessive treatment, unnecessary hospitalizations and fraudulent claims for insurance benefits aimed at boosting profits.
From 2009 through last year, 1,805 illegal medical institutions, including illegally operated hospitals by non-physicians, were investigated and indicted, and the NHIS decided to recover 2.9162 trillion won in medical benefits. However, the actual amount recovered was only 256.3 billion won, putting the collection rate at 8.79%.
The SPO established the joint task force on illegal medical and pharmaceutical crimes at the Seoul Western District Public Prosecutors' Office in May to respond to crimes that threaten public health, including illegally operated hospitals by non-physicians and the illegal distribution of pharmaceuticals.
The task force consists of 30 members in total, including four prosecutors, seven police officers and 19 officials from the MOHW, NHIS, HIRA, National Tax Service and Financial Supervisory Service.
The task force is focusing its investigation on the illegal establishment and operation of medical institutions, excessive non-covered treatment and false insurance claims. It also plans to move ahead with preservation measures for confiscation and collection of criminal proceeds from the early stages of the investigation, while simultaneously pursuing administrative sanctions and recovery of medical benefits.

[email protected] Choi Seung-han Reporter