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China Youth Daily and China Youth Network reporter Wang Yejie

On June 21, the Pudong New District People's Court of Shanghai made a first-instance judgment on the two main offenders of a "medical fraud" gang fraud case: the defendant Yi was convicted of fraud and sentenced to 11 years and 6 months in prison, deprived of political rights for two years, and fined RMB 200,000. The defendant Deng was convicted of fraud and sentenced to 11 years in prison, deprived of political rights for two years, and fined RMB 150,000.

Neither Yi nor Deng filed an appeal. Currently, the court's decision has come into effect.

Recently, China Youth Daily and China Youth Network reporters learned from the People's Procuratorate of Pudong New Area, Shanghai (hereinafter referred to as "Pudong Procuratorate") that the gang had a clear division of labor in the fraud case, and carried out "medical fraud" in major hospitals in Shanghai, involving more than 1,800 victims and more than 7 million yuan. 45 "bosses, doctors, medical assistants, and medical fraud" defendants in the gang were prosecuted by the procuratorate for "fraud", of which 3 were practicing physicians with medical qualifications.

At the same time, after the case was decided, the Pudong Procuratorate still focused on the root cause of the problem and issued relevant procuratorial suggestions, urging relevant departments to fulfill their supervisory responsibilities regarding the issue of "irregular operation of Chinese medicine clinics with formal medical qualifications."

Many patients in tertiary hospitals "register but do not receive treatment"

In mid-2023, the public security authorities received a report that Mr. Zheng took his mother to a tertiary hospital in Pudong New District, Shanghai for gastric disease treatment. After registering and waiting for the consultation, he was dragged by a "fellow patient" to a nearby traditional Chinese medicine clinic for treatment, spending a total of more than 8,000 yuan. He suspected that he had been defrauded. Based on this clue, the public security authorities checked the hospital's registration system and found that many patients had "registered but not received treatment" recently.

When the hospital doctors made follow-up calls to these patients, the patients revealed that they had experienced the same thing as Mr. Zheng while waiting for the consultation. They were prescribed medicine worth thousands of yuan at a traditional Chinese medicine clinic recommended by a "fellow patient" and were already taking the medicine on their own.

According to the doctor of the aforementioned tertiary hospital, the doctor of the hospital usually prescribes 14 sets of medicine for two weeks at most. However, a patient told the doctor that he paid more than 3,000 yuan for 10 sets of Chinese medicine prescribed outside.

After investigation by the public security organs, it was found that the deceived patients paid between 200 yuan and 800 yuan for each dose of Chinese medicine.

In addition to hospitals, from 2023 to early 2024, many patients reported directly to the police that they might have been cheated. Without exception, these patients were taken to a traditional Chinese medicine clinic by their "fellow patients" and found a "retired expert" from a well-known hospital in the clinic to see a doctor.

Among them, some patients "became cautious" and found that Chinese medicine had no effect after taking it for a period of time, so they asked someone to identify the authenticity of the "precious medicinal materials" in these Chinese medicine prescriptions. It turned out that the so-called "precious medicinal materials" were actually some cheap goods that were used as inferior products.

The Lujiazui Public Security Office of the Pudong Branch of the Shanghai Public Security Bureau discovered during the investigation of cases that this type of "patient" existed in far more than one hospital. Similar "patients" had also appeared in many of Shanghai's famous tertiary hospitals.

These "fellow patients" not only brought the patients to the TCM clinic, but also helped the patients pay, register, prescribe and buy medicine. Afterwards, the "fellow patients" also added WeChat with the patients to discuss their recovery and fight against the disease. The purpose of all this is to get the patients to "finish the medicine before coming back for prescription."

The police investigation found that after the patient is prescribed medicine, the "medical agent" can take a 55% commission. If the patient returns for a follow-up visit, the "medical agent" can get another commission.

"Medical agents" pull orders, and many medical clinics accept them

Multiple court verdicts obtained by China Youth Daily and China Youth Network reporters show that the aforementioned fraud gang is not only large in number, but also has a complex internal structure. In addition to the "medical agents", there are "agents" in every link.

Feng Mouying is a "medical agent" in the aforementioned fraud gang. Since 2022, the main culprits Yi and Deng have begun recruiting "medical agents", and Feng Mouying was one of the first batch of "medical agents" recruited at that time.

Feng Mouying's job was to "pull orders" from various well-known tertiary hospitals in Shanghai. She would first pretend to be a fellow patient, and then use fictitious facts and exaggerated medical effects to lure patients to Rong Moutang, Xin Moujia, Ji Moutang and other traditional Chinese medicine outpatient clinics for treatment.

After she was arrested, the audit results of Feng Mouying showed that she had defrauded 13 victims in total, involving a sum of more than 84,000 yuan.

Feng Mouying was just a "preliminary link" in this fraud scheme. The court verdict shows that in addition to hiring "medical agents", Yi and Deng also hired general management personnel to be responsible for bookkeeping and salary distribution, hired Yan Moufang to calculate commissions, hired Tang Moumin and others to be responsible for sending prescriptions from the front desk to the pharmacy, hired Wang and Hua as "doctor assistants" to be responsible for formulating specific medication courses for patients, and hired three qualified traditional Chinese medicine doctors to sit in and prescribe medicines.

In addition, the two main culprits also spent money to rent "consulting rooms" in several regular Chinese medicine clinics, let the hired doctors "move in", and set up separate payment windows.

Yi established a close "cooperative relationship" with Yuan Mouping, the person in charge of the outsourced Chinese medicine pharmacies of the aforementioned Chinese medicine clinics, and agreed that Yuan Mouping would be responsible for reducing the variety and content of drugs and controlling the cost of all prescription drugs to around 21 yuan per dose.

In other words, no matter what kind of "expensive prescription" the patient takes to get the medicine, the cost of each dose of Chinese medicine that is finally delivered to the patient is about 21 yuan.

According to Fu Hui, a prosecutor at the Pudong Procuratorate, in the "medical broker" fraud case, the "medical broker" is responsible for bringing the patient to the Chinese medicine clinic, registering with the patient, paying for the prescription, and then getting a refund of all the money he has paid, and receiving a commission based on the amount of the patient's prescription order. The "doctor's assistants" are a group of unqualified personnel, some of whom even have only elementary school or junior high school education. They can change the doctor's orders while the prescription is being sent to the pharmacy, and arbitrarily change the course of treatment based on the patient's home address, financial situation, etc.

Fu Hui said that proving whether a Chinese medicine prescription has a problem is a difficult point in case handling.

"From the perspective of evidence collection, it is a difficult problem for us to judge whether a drug is effective." Fu Hui introduced that the public security and procuratorate invited three Chinese medicine experts to randomly select more than 500 valid prescriptions (that is, prescriptions that clearly state the patient's name and symptoms) seized by the police at the Chinese medicine clinic for verification. They found that these prescriptions all had the following problems: first, the prescription format did not comply with the regulations on prescription management, and the dosage and decoction method could not be clearly stated; second, the prescriptions had the problem of "the medicine was not suitable for the disease".

Why do so many victims continue to be deceived?

In July 2023, the public security organs arrested dozens of criminal suspects headed by the bosses of the aforementioned gang, Yi and Deng, and transferred them to the Pudong Procuratorate for review and prosecution in August of the same year. Since November 2023, the Pudong Procuratorate has successively prosecuted a total of 45 people, including the bosses, doctors, medical assistants, and medical agents of the Yi and Deng gang, for fraud.

At present, the court has made judgments on all defendants in the case, including the main offenders Yi and Deng. The court believes that the defendants Yi and Deng used fabricated facts and concealed the truth for the purpose of illegal possession to defraud others of property, and the amount was extremely huge. Their actions have constituted the crime of fraud.

The traditional Chinese medicine clinics involved in the case have been asked to close and rectify by the local health commission, market supervision bureau and other departments.

"The case seems to have come to an end, but we have also discovered related issues and are studying the next prosecutorial recommendation plan." Fu Hui told the China Youth Daily and China Youth Network reporter that the above series of cases are thought-provoking. Why do so many victims continue to be deceived? An important reason is that the Chinese medicine clinics they were taken to are all places with formal medical qualifications, but many of the "doctors" and "medical assistants" they met here are informal.

"Shanghai has many large hospitals and famous doctors. Patients with difficult and complicated diseases in the Yangtze River Delta region all hope to come to Shanghai to see famous doctors. If the management is not in place, they can easily be taken to such informal outpatient rooms in regular clinics." Fu Hui said that the act of regular clinics renting out outpatient rooms directly led to many victims "losing their ability to distinguish."

Fu Hui also led the investigation team to secretly visit traditional Chinese medicine clinics near major hospitals in Shanghai. She found that some clinics rented out consultation rooms one by one to individuals, and some clinics even rented out the entire second floor to individuals.

"It's like renting a counter in a department store. The prices are different for different locations. When checking out, it looks like you are checking out at the mall cashier counter, but your counter uses another checkout system with dedicated cashiers. Such operations actually increase the difficulty for ordinary people to identify the scam," said Fu Hui.

Fu Hui said that in the next step, the local procuratorate will work with relevant industry authorities and regulatory authorities to study a comprehensive governance plan. "For such clinics, there must be detailed rules for intervention management and daily supervision records. We cannot just let it go!"

Source: China Youth Daily