China’s Psychiatric Hospitals Exploited Insurance by Using Healthy People as Fake Patients
February 14, 2026
Central China’s psychiatric hospitals are caught in a shocking insurance scam. According to the Beijing News, many healthy people were lured into psychiatric facilities in Xiangyang, Hubei, with promises of long, cheap stays. These 'patients' showed no real symptoms and received minimal care.
These people were used by hospitals to cheat the public medical insurance system. Hospitals used their info to fake treatments and claim government funds. Over 20 psychiatric hospitals, mostly newly opened, operate in Xiangyang, a city with 5.3 million residents.
An undercover reporter posing as a nurse at Xiangyang Hongan Psychiatric Hospital found patients with very mild or no symptoms. One senior nurse admitted some elderly patients stay because it’s cheaper than nursing homes.
The reporter, also falsely admitted as a patient, said no medicine or real treatments were given. One patient reportedly stayed 90 days but paid for treatments he never received. A hospital source said the insurance pays about 130 yuan (US$20) daily per patient, so longer stays mean more money.
Hospitals even pay staff a commission for each new patient recruited. The investigation found beatings and mistreatment of patients, including slapping and kicking. Phones were seized to block family contact, and patients were kept from leaving easily.
A patient held at Yiling Caring Hospital for five years said, "The rules here are strict. I have no freedom. It feels like I have been in jail for five years."
Medical reform expert Xu Yucai said these scams happen because psychiatric hospitals operate behind closed doors and patients cannot judge the quality of their care.
The viral report has been viewed over 66 million times on Chinese social media. Health officials in Xiangyang and Yichang confirmed investigations began on February 3.
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Tags:
China
Psychiatric Hospitals
Insurance Scam
Medical Fraud
Patient Abuse
Public Outrage
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