Paid for Bringing in Patients? The Truth Behind an OB-GYN Clinic’s “30% Commission” [Real-Life Case]

[Financial News] In July 2021, a patient was treated at an OB-GYN clinic in Seoul’s Seocho District after being referred by an outside company. The bill came to 10 million won. The clinic later wired 2.7 million won to the account of the company that had referred the patient—27% of the fee paid by the patient.
On the surface, it was an advertising contract for promoting the clinic. In reality, the arrangement was to pay a commission equal to part of the treatment fee for each patient referred. The higher the treatment fees patients paid, the more money the company received.
This was not a one-off transaction. For about a year and nine months, the OB-GYN clinic treated patients referred by an outside company and paid commissions. There were 197 referrals, and the clinic paid the company more than 330 million won.
The contract between A, the operator of the OB-GYN clinic, and the patient-referral company dates back to July 2021. The company was in the business of referring patients to hospitals and clinics through a multilevel marketing operation and earning a profit.
A made it appear that advertising contracts were being signed with the company’s operators, but in reality agreed to pay commissions of 25–30% of the treatment fees for referred patients. When the company’s sales representatives subsequently referred patients, the clinic treated them and remitted commissions in return.
From July 2021 through March 2023, the total amount paid for treatment by patients referred this way was 1,228,250,000 won. About 27% of that amount—331,627,500 won—was paid in patient-referral commissions.
Legal sources said on the 23rd that Single Criminal Division 8 of the Seoul Western District Court (Presiding Judge Lee Se-chang) fined A 20 million won on July 15 for violating the Medical Service Act.
A was brought to trial on charges of instigating the for-profit referral of patients by agreeing to pay commissions in exchange for referrals, then treating the patients referred and paying the company.
The Medical Service Act prohibits not only referring, arranging or enticing patients to medical institutions or medical professionals for profit, but also instigating such acts.
During the investigation, authorities obtained records of patient referrals, the clinic’s remittance records and mobile phone messages from people associated with the company. Documents analyzing commissions by medical institution, the company’s organizational structure and its performance were also submitted as evidence.
The court noted that A had paid about 330 million won in commissions for patient referrals over a considerable period. It found A’s culpability was not minor, considering the extent to which the conduct undermined public trust in the order of the medical market, the amount of the commissions, and the duration and frequency of the offense.
However, the court considered it a mitigating factor that A admitted to the offense and actively cooperated with the investigation. It also took into account that, apart from having received a fine once long ago for a different type of offense, A had no prior record of punishment, and that the risk of reoffending was not high because the clinic A had operated had closed.
[email protected] Choi Seung-han Reporter