"Healthy" Patients Admitted To Mental Hospitals In China To Defraud Insurance Scheme

Media reports mentioned that patients, including those without mental health issues, are subjected to strict, prison-like conditions.

15 Feb 2026, 02:48 · NDTV

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Reports reveal Chinese mental hospitals recruit fake patients to scam insurance system
Hospitals in Hubei offer free admission and fabricate diagnoses for insurance fraud
Fake patients incur false charges, generating millions in fraudulent insurance claims

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A major scandal has erupted in China, with reports emerging that some mental hospitals are recruiting fake patients to scam the country's medical insurance system, the South China Morning Post (SCMP) reported, citing an undercover report by the Beijing News. The allegations have sparked widespread outrage and prompted a nationwide investigation.

According to reports, hospitals in Hubei province are offering free admission to individuals, including those without mental health issues, and fabricating diagnoses to exploit the national medical insurance scheme.

One undercover investigation found over 50 people admitted for free, with many receiving false diagnoses, such as "alcohol-related mental and behavioural problems".

Healthy individuals told the media outlet that they stayed there because of a "free hospitalisation, free living costs" promise on offer.

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According to reports, the hospitals allegedly bill the insurance system for treatments never provided, with one caretaker revealing fabricated charges of around 130 yuan per day, totalling nearly 4,000 yuan (US$575) monthly per patient. This could generate an estimated 6 million yuan in fraudulent claims annually for a hospital with 100 patients.

The SCMP report stated that there are more than 20 psychiatric hospitals in Xiangyang, which is a city with a population of 5.3 million. The report also claimed that a majority of such facilities were created in recent years.

"What we hope is that your relative can live here for a long period of time," one worker told the reporter. "He can live here for however long he wants."

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A reporter, working as a nurse at Xiangyang Hongan Psychiatric Hospital, found that most of the patients have zero or very light symptoms. But some patients in their 70s are not able to move around independently.

"They are tended by us. They regard our hospital as a nursing centre because it is much cheaper than ordinary nursing homes," as quoted, a senior nurse told him.

Media reports mentioned that patients, including those without mental health issues, are subjected to strict, prison-like conditions, with physical abuse for non-compliance. Staff members have been witnessed slapping, hitting, and tying up patients.

China's National Healthcare Security Administration has launched a full-scale review of psychiatric facilities nationwide, ordering provincial bureaus to investigate and take action against any illegal activity.

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