In recent years, fraud against China's state-run medical
insurance program has been one of the major focus areas for both
criminal and administrative enforcement. Data published on August
5, 2025 by the Supreme People's Court
(最高人民法院) indicates that a
total of 1,156 first-instance criminal cases relating to medical
insurance fraud were adjudicated in 2024, a year-on-year increase
of 131.2%.1 This is nearly as many cases as were
adjudicated in total (1,213) from 2021 to 2023.2 On the
administrative side, the National Healthcare Security
Administration (NHSA,
国家医疗保障局), the
government agency with primary responsibility for China's
state-run medical insurance program, disclosed earlier this
year3 that 2,008 entities were verified to have engaged
in medical insurance fraud in 2024. A total of US$3.9 billion (RMB
27.5 billion) of medical insurance funds were recovered in 2024
through these criminal and administrative enforcement actions, a
47.5% increase over 2023.4
This update will provide an overview of recent criminal and
administrative enforcement actions targeting medical insurance
fraud.
Criminal Enforcement
On August 5, 2025, the Supreme People's Court of the
People's Republic of China released Model Cases on Strictly Punishing Fraud Crimes
Against Medical Insurance Program in Accordance With the Law
(最高人民法院发布人民法院依法严惩医保骗保犯罪典型案例).
These model cases followed on the publication of model cases by the
Supreme People's Court and the Supreme People's
Procuratorate in March 2024, and further clarify the principles and
guidance used by China's procuratorates and courts when
prosecuting and judging cases of criminal medical insurance fraud.
For companies operating in China's healthcare sector, these
cases provide valuable insight into the views of Chinese regulators
and courts.
We have prepared a summary of select cases highlighting common fact
patterns in medical insurance fraud investigations:
| No. | Defendant | Case Summary | Criminal Penalty |
| 1 | Medical (sales) representative | A medical representative falsified patients' genetic testing reports so the patients could be eligible to claim medical insurance reimbursement. | Sentenced to nine months in prison and fined RMB 10,000 (US$1,429) for fraud. |
| 2 | Private healthcare institution personnel | The actual controller of a private healthcare institution colluded with others to falsify patients' medical records by inflating hospital expenses and other means in order to claim medical insurance reimbursement. | Sentenced to 13.5 years in prison and fined RMB 500,000
(US$71,429) for fraud. Penalties for other codefendants omitted. |
| 3 | Public healthcare institution personnel | The person in charge of a public healthcare institution instructed healthcare providers to falsify patients' diagnostic testing reports in order to justify the patients' hospital expenses and claim medical insurance reimbursement. | Sentenced to 12 years in prison and fined RMB 500,000 (US$71,429) for fraud. |
| 4 | Patients covered by state-run medical insurance | A hemophilia patient obtained extra prescription hemophilia medication through their own and other hemophilia patients' medical insurance accounts, and resold these products to patients nationwide for profit. | Sentenced to 10.5 years in prison and fined RMB 150,000
(US$21,429) for fraud. Penalties for other codefendants omitted. |
| 5 | Other individuals | An individual instructed patients to purchase extra pharmaceuticals which were reimbursed by the state-run insurance program and resold these pharmaceuticals for profit. | Sentenced to eight years in prison and fined RMB 60,000
(US$8,571) for the crime of fraud. Penalties for other codefendants omitted. |
Administrative Enforcement
Individuals and institutions engaged in medical insurance fraud
may also be exposed to administrative liability, including fines,
suspension of eligibility for medical insurance reimbursement, and
revocation of professional qualifications. Administrative penalties
are sometimes imposed in addition to criminal penalties.
On July 6 and July 26, 2025, respectively, the NHSA published
18 model cases relating to medical insurance fraud. These cases
described misconduct by pharmacies, pharmacists, healthcare
providers, and other individuals. Two of these cases are notable
for implying that medical representatives were involved in
insurance fraud by facilitating illegal reimbursement of medical
claims:
1. A medical representative printed blank prescriptions and purchased falsified corporate seals for a hospital. The medical representative then worked with pharmacy personnel to use these falsified prescriptions to purchase pharmaceutical products at the discounted price available through medical insurance, without the involvement of patients.
2. A medical representative brought patients to a pharmacy and had them purchase prescription immunology medicine. After the patients purchased one dose of medication at the discounted price available through medical insurance, pharmacy personnel would then sell a second dose to the patients, again at the discounted price. However, pharmacy personnel would give the second dose of medication to the medical representative, who would reimburse the patient for the cost.
The NHSA did not disclose the administrative penalties imposed
on these medical representatives, if any, but noted that issues
identified in these cases had been referred to other regulatory
authorities.
The fact patterns presented in these cases appear to align with the
enforcement targets described in the Notice on Carrying Out Self-Examination and
Self-Correction of Illegal Use of Medical Insurance Funds by
Medical Insurance Designated Institutions in 2025 (Notice,
国家医疗保障局关于开展2025年定点医药机构违法违规使用医保基金自查自纠工作的通知),
which was published by the NHSA in January as the basis for local
regulators' enforcement actions. In the Notice, the NHSA
summarized typical patterns of misconduct found in medical
insurance fraud, particularly in oncology, anesthesiology, and
critical care matters. The Notice also analyzes issues found in
retail pharmacy cases (including direct-to-consumer pharmacies),
such as pharmacies colluding with medical representatives to
fabricate prescriptions, and selling drugs in excess of
patients' actual needs.
Other Investigations
Recent news reports describe both continuing and potentially new
areas of focus for regulators. Multiple ongoing enforcement actions
appear to target current and former employees of both multinational
and domestic manufacturers who may have promoted the sale of
oncology and immunology products for off-label indications.
Off-label promotion has the potential to result in funds from the
state-run medical insurance program being used to pay for off-label
treatment, in violation of the terms under which the medications
are added to China's National Reimbursement Drug
List.5
Patient assistance programs (PAP) are a potentially new area of
enforcement focus. An August 2025 news report discussed a court
judgment which stated that a domestic manufacturer provided
kickbacks to patients in return for the patients purchasing
excessive quantities of drugs that were covered by state-run
medical insurance. Other media reports indicated that this
misconduct was likely related to a PAP run by a domestic
manufacturer. This PAP was unusual in that it provided benefits to
patients for a medication that had already entered the state-run
insurance reimbursement system, meaning that patients could already
purchase the drug at a discounted price. The theory of the
enforcement action appeared to be that the benefits provided under
the PAP were excessive and may have encouraged patients to purchase
more medication than necessary, resulting in excessive use of
public insurance funds.
Takeaways
Medical insurance fraud remained a top priority for Chinese regulators in 2025, including multiple investigations of employees from both domestic and multinational pharmaceutical companies. Companies may wish to review their training and compliance programs, particularly with respect to off-label promotion and interactions with retail pharmacies. PAPs for pharmaceuticals that have already been approved for reimbursement may be another area meriting additional scrutiny.
Footnotes
1 Press Release, Supreme People's Court, Supreme People's Court Released Model Cases on Strictly Punishing Fraud Crimes Against Medical Insurance Program in Accordance With the Law (August 5, 2025).
2 Press Release, Supreme People's Procuratorate, Supreme People's Court, Supreme People's Procuratorate, and Ministry of Public Security Released Guiding Opinions on Several Issues Concerning the Handling of Criminal Cases Involving Healthcare Fraud (March 1, 2024).
3 Press Release, National Heath Security Administration, 2024 Statistical Report on the Development of Health Security Industry (March 21, 2025).
4 Press Release, National Heath Security Administration, 2023 Statistical Report on the National Development of Health Security Industry (July 25, 2024).
5 In China, drugs are approved for reimbursement coverage by the state-run insurance program for specific approved indications. For example, a drug may be approved in China for treatment of indications A, B, and C, but only approved for reimbursement coverage of indication A. In this scenario, if the drug is prescribed for indication B or C, patients could not purchase the drug at the discounted pricing available through the state-run insurance program, even though indications B and C are approved for sale and marketing in China.
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