Exposed: Chinese Psychiatric Hospital Syndicate Creates Fake Cases to Defraud Health Insurance

On February 15, 2569 (2026), multiple psychiatric hospitals in Xiangyang, Hubei Province, China, were exposed in a massive scandal. Local media investigations revealed a systematic fraud where individuals with normal health were lured into becoming 'patients' to create fake treatment records and embezzle funds from government health insurance. Reports indicate that several private psychiatric facilities in the city, which has over 5.3 million residents, barely provided genuine medical treatment. Many admitted individuals showed no clear psychiatric symptoms, with some joining due to offers of 'free lodging and food', knowing the state insurance system would cover most expenses. The underlying scheme involved using personal information of admitted individuals to create false treatment histories, with hospitals receiving more compensation for more patients and longer hospital stays. An undercover reporter working as a nurse at Xiangyang Heng'an Psychiatric Hospital discovered most patients had minimal or no symptoms, with some elderly patients essentially treated like nursing home residents due to lower costs. The investigation further revealed violent behaviors, including physical abuse, confiscating mobile phones, limiting family contact, and preventing patients from leaving the hospital. Some patients were even tied to beds and systematically isolated. After the report's release, online discussions in China reached over 66 million views, causing widespread public outrage. Health authorities in Xiangyang and Yichang announced on February 3rd that investigations have been initiated.