Patients funneled to Gangnam hospitals; brokers and others caught in a 1.7 billion won kickback scheme

[Financial News] A gang of hospital brokers who referred hundreds of patients to hospitals and clinics in the Gangnam area and pocketed an estimated 1.7 billion won through a so-called “medical-fee cashback” scheme—receiving up to 30% of medical fees back—has been caught by police.
The Financial Crime Investigation Unit of the Metropolitan Investigation Unit at the Seoul Metropolitan Police Agency said on the 10th that it had referred 58 people, including hospital broker A, a woman in her 60s, patient recruiters and hospital staff, to prosecutors without detention on the 30th of last month for allegedly referring patients for profit in violation of the Medical Service Act. The investigation covers 13 hospitals and clinics in the Gangnam area.
Police said the brokers referred 802 patients after signing contracts with hospitals and clinics that were ostensibly for promotion and marketing, from 2023 until recently. They then received 20–30% of the medical fees paid by patients back from the hospitals as commission, and are believed to have pocketed around 1.7 billion won in total. They shared some of the money with the recruiters who brought in the patients.
Insurance agents and others were mainly involved in recruiting patients. The recruiters connected patients to brokers by urging clients or acquaintances they regularly dealt with with claims such as, “You can get treatment at a hospital in Gangnam using your indemnity health insurance.” The brokers passed the patients’ information to the hospitals, arranged appointments and received commissions for each case once treatment had taken place.
The brokers are believed to have signed marketing contracts with hospitals to make the arrangement look like legitimate advertising and promotional work. Police believe the contracts were actually intended to distribute revenue in return for referring patients.
One of the hospitals involved was found to have received referrals for about 200 patients and paid about 530 million won to the brokers. This means about a quarter of all patient referrals went to a single hospital.
Nine hospital directors were among those referred to prosecutors this time. Police plan to continue investigating some hospital directors and recruiters whose cases have not yet been fully examined.
Police believe the patients did not receive treatment knowing how brokers and recruiters profited. The explanation is that they visited the hospitals after being encouraged by insurance agents they knew, and it is difficult to conclude that they were aware that the recruiters would earn money when they received treatment.
However, police also uncovered suspicions of insurance fraud and so-called “sham hospital” operations at some hospitals and clinics. They are conducting separate investigations into two of the 13 hospitals and clinics referred to prosecutors on suspicion of insurance fraud. They are examining evidence that claims were made for insurance payouts by disguising treatment not covered by indemnity insurance, such as cosmetic procedures, as treatment for other illnesses.
A police official said, “When 20–30% of medical fees is paid in exchange for referring patients, there is a possibility that unnecessary treatment may be added or fees may be set too high,” adding, “We plan to crack down rigorously on medical-fee cashback schemes and insurance fraud.”


[email protected] Choi Seung-han Reporter