Beijing, February 2026: A scandal involving fake psychiatric hospitals in central China has brought renewed attention to serious weaknesses in the country’s elder care system and medical insurance oversight. Investigations have revealed that several private mental health facilities admitted elderly and vulnerable individuals under false pretenses and then used fabricated diagnoses to fraudulently claim government insurance funds.
The revelations have triggered nationwide inspections, regulatory warnings, and public debate over how ageing citizens are cared for in a rapidly greying society.
The issue came to light after investigative reporting by Beijing News in late January 2026 exposed psychiatric hospitals in Hubei province, including facilities in Xiangyang and Yichang. Reporters found that some hospitals actively recruited patients who did not need psychiatric treatment, including elderly people and individuals with alcohol dependence.
Hospitals reportedly promised free meals, accommodation, and treatment. Once admitted, they billed public medical insurance for inpatient psychiatric care, often charging about 140 yuan per patient per day. In many cases, these claims were exaggerated or entirely false. Some facilities housed dozens of patients at a time, while others held more than 100.
Most of the patients caught up in the scheme were older adults from rural areas with limited pensions and weak family support. Many were persuaded to enter hospitals voluntarily but later found it difficult to leave.
Investigations documented poor living conditions and reports of verbal and physical mistreatment. Some patients were made to clean wards, assist staff, or care for other patients without pay. Families who attempted to discharge relatives reportedly faced delays or resistance from hospital administrators.
In some cases, people with no diagnosed mental illness were kept in psychiatric wards for extended periods.
Following the media exposé, the National Healthcare Security Administration stepped in. In early February 2026, the agency ordered provincial authorities to conduct inspections of designated psychiatric hospitals and strengthen oversight of medical insurance claims.
Officials instructed hospital managers to correct violations immediately and refund any misused insurance funds. Provincial departments were asked to submit reports on inspections and corrective measures by the end of March 2026.
National Health Commission also directed psychiatric institutions nationwide to review admissions practices and ensure patients were not being illegally detained or misdiagnosed for profit.
(Rh/ARC)
