Public Outrage over China Psychiatric Hospital Insurance Fraud Scam

February 16, 2026

South China Morning Post reported that the undercover investigation by the Beijing News found multiple privately run psychiatric hospitals in Xiangyang and nearby Yichang, Hubei, luring healthy people with promises of free or cheap long-term stays and then using their identities to fabricate treatments and bill China’s public medical insurance system, turning them into revenue sources; the article describes minimal or nonexistent care, inflated charges for procedures patients say they never received, commissions paid to staff for recruiting “patients,” and allegations of beatings and restrictions on contact with families, including one man who said he was held for five years.

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