A community health service station in Beijing's Fengtai district suddenly closed its doors, and it turned out that it had already been shut down by the contractor, Li Penghui, on suspicion of fraud. Li Penghui also contracted seven other community hospitals in Beijing's Fengtai District. In December 2023, the Beijing No. 2 Intermediate People's Court convicted Li Penghui of fraud, embezzlement, non-state functionary, and false invoicing, and sentenced him to life imprisonment. The court found that Li Penghui conspired with others to defraud more than 100 million yuan of state medical insurance funds from eight community hospitals.
Before the case was discovered, Li Penghui was a legal person of Beijing Jingminkang Investment Management, and he conspired with Fan Zongtang, Fan Wenyuan, Li Peirong, and others to privately purchase Chinese herbal medicines or finished Chinese medicine decoction pieces and supply them to Nengji Company, and then falsified raw material test reports and production records to sell these Chinese medicines to eight community hospitals contracted by Li Penghui. These 8 community hospitals then defrauded the national medical insurance funds by declaring reimbursements1More than 200 million yuan.
Before the case, Li Penghui set up the Jingminkang Company to manage the eight community hospitals. Although these community hospitals are private non-enterprise units and are not allowed to make profits, they signed a trusteeship agreement with Jingminkang and handed over the management to Jingminkang.
The trial lasted four days and involved the testimony of more than 40 witnesses. The other defendants in the case include Fan Zongtang, Fan Wenyuan, Li Peirong and others. Fan Zongtang took control of Nengji, which supplied traditional Chinese medicine decoction pieces to these community hospitals. Fan Zongtang's son Fan Wenyuan was also implicated. At the material time, Nengji provided medicines to a number of hospitals in Beijing, including community hospitals.
The case revealed the seriousness of Medicare funding fraud and the illegal activities that some community hospitals may have been involved in. The indefinite sentence shows China's resolute stance on combating health insurance fraud.