Gangnam Hospital Brokers Referred to Prosecutors for Illegally Steering 800 Patients, Pocketing 1.7 Billion Won

Used sham contracts to collect 20%-30% of medical fees as commissions

Suspected violations of the Medical Service Act... Insurance agents lured acquaintances

58 people, including brokers and hospital employees, referred to prosecutors without detention

A group of brokers who illegally referred 802 patients to hospitals and clinics in Seoul’s Gangnam area and pocketed a portion of their medical fees as commissions has been referred to prosecutors.

The Seoul Metropolitan Police Agency’s Financial Crime Investigation Unit said on the 10th that it had referred 58 people without detention on suspicion of violating the Medical Service Act by referring patients for profit. They include two hospital brokers, one of whom is a woman in her 60s identified as A, 37 patient recruiters, and 19 hospital employees.

According to police, from January 2023 through June this year, A and the others referred 802 patients to 13 hospitals and clinics in the Gangnam area after formally signing promotional and marketing contracts with them. They are suspected of receiving back 20% to 30% of patients’ medical fees under the pretext of “medical fee paybacks (refunds),” pocketing commissions totaling about 1.7 billion won. Of that amount, they distributed 10% to 15% to the 37 patient recruiters.

The patient recruiters were mainly former insurance agents or hospital coordinators. They recruited patients by telling people they knew or customers they had signed up for insurance that they could receive high-quality care at hospitals in Gangnam. Some were also told that their treatment costs could be covered by private indemnity insurance. The recruiters passed patients’ information to the brokers, who then passed it on to hospital employees to arrange appointments.

Investigators found that although the brokers made it appear they had signed legitimate promotional and marketing contracts with the hospitals, they actually settled commissions based on the number of patients referred. The commissions paid by the hospitals were calculated for each patient referral and paid monthly. Among the 13 hospitals and clinics, one hospital that paid the brokers the most was found to have paid 530 million won after receiving referrals for more than 200 patients.

Kim Miae, chief of Financial Crime Investigation Team 3 at the Seoul Metropolitan Police Agency’s Metropolitan Investigation Unit. Reporter Jo Yongjun.

During the investigation, police also uncovered suspected insurance fraud at two hospitals and are continuing to investigate the cases. The alleged methods included recording false diagnoses or creating hospitalization and procedure records to make it appear that patients had received treatment for illnesses covered by private indemnity insurance, when they had actually undergone procedures for cosmetic purposes. Police said they plan to continue investigating the cases.

Police also suspect that illegal commissions may have been reflected in hospital fees, potentially leading to excessive treatment. Hospitals may have set higher prices for non-covered services or added unnecessary treatments to pay the commissions.

Kim Miae, head of Unit 3 of the Financial Crime Investigation Division, said, “We will crack down strictly on the payment of illegal commissions, which depletes National Health Insurance funds and drives up private indemnity insurance premiums.”

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