Chinese authorities have stepped up efforts to crack down on fraud targeting the country's medical insurance fund, with more than 5,500 people prosecuted for related offenses from 2025 through the end of June this year, according to the Supreme People's Procuratorate.
Hou Yahui, head of the SPP's Procuratorial Department for General Crimes, said procuratorates nationwide have focused on high-risk areas including medical treatment, drugs and medical consumables, fraudulent diagnosis and treatment and the illegal resale of medicines purchased through the national medical insurance system.
The SPP has placed 13 major cases under direct supervision, while local procuratorates have intensified punishment of organizers, professional fraudsters, illegal medicine dealers and repeat offenders involved in medical insurance fraud, Hou said.
Procuratorates have also encouraged suspects to return illicit gains and compensate for losses through leniency policies for those who plead guilty and accept punishment. Since 2025, nearly 300 million yuan ($44.7 million) in medical insurance fund losses has been recovered during procuratorial proceedings.
Authorities have expanded cooperation among procuratorates, medical insurance administrations and public security agencies through mechanisms for case referrals, information sharing and joint investigations. Prosecutors have also developed dozens of digital supervision models targeting fraud involving medicines for special diseases, illegal resale of insured drugs, online hospitals and fraudulent use of medical insurance accounts, Hou said.
The crackdown has also extended to corruption linked to the medical sector.
Since 2025, prosecutors nationwide have charged more than 1,900 people with duty-related crimes in the medical and medical insurance fields, targeting bribery, kickbacks and abuse of power in areas including fund supervision, drug and medical equipment procurement and project bidding.
Procuratorates have also issued recommendations aimed at closing regulatory loopholes exposed during case handling and improving long-term oversight of the fund.
Gu Rong, director of the fund supervision department of the National Healthcare Security Administration, said medical insurance authorities inspected 905,000 designated medical institutions and pharmacies in 2025 and recovered 34.2 billion yuan in medical insurance funds.
During 2025, medical insurance departments transferred 1,678 institutions to judicial authorities, more than four times the number in 2021. They also assisted police in solving 3,776 medical insurance fraud cases and dismantling 667 criminal groups.
Newly issued implementation rules for the regulation on the use of the medical security fund have further clarified how administrative and criminal enforcement should connect, Gu said. Suspected criminal conduct involving organized fraud, forged materials or assistance in concealing illegal activity must be transferred to police rather than being handled solely through administrative penalties.
Cases that do not warrant criminal liability can also be transferred back to medical insurance authorities for administrative action, which creates a two-way enforcement mechanism.
A typical case released by the SPP illustrates the complexity of such schemes. Between 2019 and 2023, five professional fraudsters illegally obtained medical insurance credentials from multiple people and used them to fraudulently prescribe drugs, resell insured medicines and siphon money from medical insurance accounts.
The group worked with doctors, pharmacy employees, drug sales representatives and illegal medicine buyers, causing losses of more than 10 million yuan to the fund. One pharmacy employee also provided information on more than 5,000 patients to a pharmaceutical representative, who paid more than 310,000 yuan in kickbacks to a pharmacy chain manager.
The defendants received prison terms ranging from 18 years to 15 months. Appeals by several defendants were rejected in April 2025.
Hou also warned insured residents against becoming involved in fraud, including offers of "free hospitalization", schemes promising high prices for unused medicines and requests to lend medical insurance cards or credentials.
"Medical insurance funds are a basic safeguard for people's health," Hou said, adding that fraud ultimately undermines the healthcare protection available to all insured residents.
