ZHENGZHOU - The local government is investigating allegations of insurance fraud against a private hospital in Zhengzhou, capital of Central China's Henan province.

The Zhengzhou Harmony Hospital is believed to have illegally acquired more than 628,000 yuan ($99,700) from 2008 to 2010 by making fraudulent clinical reports, said Shi Liang, deputy director of the Zhengzhou Medical Insurance Center.

The manager of the hospital, who has already fled to the United States, borrowed medical cards from acquaintances who were not actually patients. The manager counterfeited clinical reports, prescribed medicine for the non-existent patients and billed the city's medical insurance fund for the costs.

Shi said regulations allow a hospital to recover 80 percent of the medical fees charged from the city insurance fund.

The hospital was also found to have contracted one of its departments to individuals, which made the fraud difficult to trace, according to a report released by the medical insurance center last Tuesday.

Receiving whistleblowing from local residents, the medical insurance center canceled the hospital's eligibility for medical insurance reimbursement in January 2010, Shi said. But the center did not make public the case at that time.

The local government started a two-month inspection of all of the city's hospitals after the case was found out and reported by the Xinhua News Agency in early February. It vowed to crack down on hospital managers who attempt to defraud the insurance fund.

Li Xiang, who reported the case to the center and local police, said his mother's medical card was used five times from 2007 to 2009, during which time his mother had not been to the hospital.

The record of his mother's medical card shows that she had stayed in the hospital 13 days starting on Oct 4, 2008 due to lung infection, high-blood pressure and coronary heart disease. The cost of medical treatment was 6,568 yuan, and 5,564 yuan of that was paid by the medical insurance center directly to the hospital as reimbursement.

Li found out that his sister had given his mother's medical card to the manager of the hospital, and the hospital used it on five different occasions to make a total of 38,200 yuan. It is not yet known if his sister was paid any money by the hospital.

Zhang Jiayin, head of the unit that is investigating the case, said police have found six suspects who allowed their medical cards to be used by the hospital.

"We have not found the manager of the hospital, and the accountant also fled. As a result, whether or not the suspects profited from the activities remains unknown," Zhang said.

Formerly called Renji Tumor Hospital, the hospital was purchased by a Shanghai-based company in July 2010. Its name along with most of its managers and doctors was changed. The buyout makes it more difficult to investigate the case, Zhang said.

On condition of anonymity, an official from the Zhengzhou Medical Insurance Center said that it was difficult to supervise all the city's hospitals.

"The patients just come and go irregularly, and if we occasionally meet the patients during the investigation, we can double-check their clinic reports and the medical cards to judge whether their medical reports were forged," he said.

Cao Wanchen contributed to this story.