Supreme Court: "No Unconstitutionality Determination Without Constitutional Court Ruling"... Broker-Managed Hospital Payment Lawsuit Remanded

Lawsuit Over Payment Suspension for ‘Broker-Managed Hospital’ Allegations
Supreme Court: “Courts Cannot Unilaterally Rule Laws Unconstitutional”
“Acquittals Finalized... Withheld Benefits Must Be Paid With Interest”

Yonhap News

The Supreme Court has ruled that a court cannot simply cancel a disposition suspending medical benefit payments to medical institutions, which were investigated by investigative agencies for operating as ‘broker-managed hospitals,’ by presuming the relevant legal provision to be unconstitutional without a decision from the Constitutional Court.

According to the legal community on July 27, the Supreme Court's Second Division (Presiding Justice Cheon Daeyeop) recently overturned the appellate court's ruling, which had favored medical corporation A Foundation in its suit against the Mayor of Mokpo for the cancellation of the disposition suspending medical benefit payments, and remanded the case to the Gwangju High Court.

In November 2019, the City of Mokpo received notification from the police that a non-medical professional had established a medical corporation and gained private benefits. Based on this investigative outcome, in January 2020, Mokpo imposed a suspension of medical benefit payments to the A Foundation’s affiliated medical institution in accordance with Article 11-5 of the former Medical Care Assistance Act. In response, the foundation argued that it was unfair to withhold payment solely based on investigative findings and filed litigation; subsequently, those involved were acquitted in court, with the acquittals finalized in July 2024.

The court of first instance recognized the legitimacy of the payment suspension and ruled against the plaintiff. However, the appellate court judged that “the relevant provision violates the principle of excessive prohibition and infringes on property rights, thus it is unconstitutional,” and ordered the disposition be cancelled.

The Supreme Court’s position was different. The court stated, “A court may request a Constitutional Court review concerning the constitutionality of a law, but it cannot independently rule that a legal provision is unconstitutional and then base its judgment on that ground,” pointing out a misunderstanding of legal principles in the appellate decision.

The Supreme Court also noted that in June 2024, the Constitutional Court had issued a decision of incompatibility regarding the provision, but nevertheless ordered that the previous law continue to apply, thus considering the payment suspension itself valid. However, the court added, “Since the final criminal acquittals for those involved have been confirmed, in accordance with the amended Medical Care Assistance Act, the Mayor of Mokpo must revoke the suspension and pay the withheld benefit fees with additional interest.”

This content was produced with the assistance of AI translation services.