Multiple psychiatric hospitals in Xiangyang City, Hubei Province, China, have fraudulently recruited non-psychiatric patients for “free hospitalization” in order to defraud medical insurance funds. Not only did they list onsite security and laborers as psychiatric patients, but even sent people and vehicles to rural areas to freely recruit farmers as simulated psychiatric patients. During inspections by medical insurance personnel, “fake discharges” were scheduled, sparking widespread discussion. The local authorities on the 3rd admitted to the situation and decided to launch an official investigation.
On the 3rd, The Beijing News published an investigative report revealing that Xiangyang, with a population of only about 5 million, has more than 20 psychiatric hospitals—a density that local residents say is “like beef noodle shops”—and uncovered related scandals.
According to the report, in December 2025, a journalist from The Beijing News went undercover as a nursing assistant at Xiangyang Hong'an Psychiatric Hospital and found that many inpatients showed no obvious signs of psychiatric abnormalities. Even more shocking, nursing assistants and security staff working at the hospital were also registered as inpatients and listed as “psychiatric patients.”
The report mentioned that in addition to the above hospital, many psychiatric hospitals in Xiangyang promised “free hospitalization and free transportation,” all competing for patient resources, even mobilizing staff to rural suburbs to recruit patients, resulting in large numbers of healthy people being admitted.
A physician at a psychiatric hospital revealed that under such circumstances, doctors help fabricate psychiatric disorders. Some psychiatric hospitals, in order to keep patients hospitalized long-term, even schedule regular “fake discharges” for patients to play hide-and-seek with insurance inspectors and avoid detection.
The report stated that as long as these “patients” are admitted to the hospital, they become “cash cows” in the eyes of hospital staff, who use their hospitalization information to falsify treatment procedures, thereby defrauding medical insurance funds. The more inpatients and the longer they stay, the higher the hospital’s income.
Even more egregiously, some psychiatric hospitals even coached the patients’ families to “report false police cases,” falsely claiming the “patient” caused trouble in the hospital to justify extended “treatment” and continue defrauding medical insurance funds.
According to comprehensive Chinese media reports, on the 3rd, Xiangyang authorities set up a special joint investigation team, not only announcing this large-scale corruption case, but also stressing that a city-wide sweep began that same day, and that once relevant issues are verified, those responsible will be dealt with strictly and swiftly according to the law.