270 busted in medical insurance fraud

About 270 individuals, including medical professionals, brokers and fake patients, have been busted by police for their alleged involvement in an insurance fraud scheme to falsely claim a combined 1 billion won ($729,000) in payouts by faking cosmetic procedures as medical treatments.

The Financial Supervisory Service on Sunday said Busan Nambu Police Station had apprehended the scammers last month.

The scheme was uncovered after the FSS received several reports on the insurance fraud to its reporting center earlier this year. After the financial watchdog opened its own investigation, it requested police to conduct probe in May.

According to the FSS, a doctor in Busan allegedly orchestrated the fraud by getting patients to get cosmetic treatments at his clinic, including thread lifting, fillers, Botox and skin hydration injections, along with forged records to appear as insurance covered treatments, such as manual therapy and fungal treatments. While cosmetic procedures are not eligible for private insurance reimbursement in South Korea, treatments like manual therapy and fungal care are.

The doctor appeared on television programs and operated a YouTube channel and online fan community to raise his public profile, which he leveraged to attract fake patients.

The doctor allegedly worked with about 10 brokers who recruited patients by promising that their cosmetic treatment could be reimbursed by private insurance. In return, these brokers got about 20 percent of the fee patients paid at the clinic.

The staff members at the hospital were reportedly instructed by the doctor to ensure that fake records did not overlap with treatment dates at another hospital, to avoid getting caught.

The patients submitted these fraudulent records to insurance companies, claiming about 1 billion won in total, according to the FSS.