Bankrupt Medical Corporation Suspected of Fraudulent Medical Fee Claims: “Large Repayments Would Make Business Difficult” – Mainichi Shimbun

News Highlights

On September 9, 2021, the Mainichi Shimbun reported that a bankrupt medical corporation is suspected of having made fraudulent claims for medical fees. The corporation stated, “It would be difficult to continue operations if a large repayment is demanded,” suggesting that the fraudulent claims may have contributed to its bankruptcy. This case highlights the importance of compliance in medical institutions and the need for early consultation when facing business deterioration.

M&A Medical Editorial Department’s Perspective

This case of a medical corporation is pointed out as having a background not just of business failure, but of a serious compliance violation: fraudulent claims for medical fees. If the fraudulent claims are true, the repayment order could amount to tens of millions of yen or more, and it is presumed that this directly triggered the business failure. Unlike general debts such as uncollected medical fees or loans, repayments due to fraudulent medical fee claims have strong legal enforceability and very little room for negotiation. This case serves as a reminder of how crucial it is to promptly consult with specialists in medical M&A and business revitalization as soon as signs such as consecutive operating losses or a deteriorating current ratio appear, even before reaching such a situation. This allows for negotiation to release personal guarantees of the clinic director and to construct a business succession scheme that provides a safety net for patients and staff.

Points Raised by This News

• Fraudulent claims for medical fees tend to result in large repayment amounts, which can be a direct cause of business impossibility.
• Early detection of signs of business deterioration and consultation with experts, regardless of compliance violations, is key to securing options.
• If fraudulent claims are discovered, it becomes extremely difficult to negotiate the release of personal guarantees or to achieve smooth business succession involving the transfer of patients and staff.
• To minimize the impact on regional healthcare, a proactive approach to exploring business succession before bankruptcy is required.

Practical Questions Arising from This News

• If there are some errors in past medical fee claims, from what scale are they considered fraudulent claims, and when does a repayment obligation arise?
• If fraudulent medical fee claims are suspected, how should a medical institution respond? Should they consult a lawyer or an M&A intermediary?
• Even if fraudulent claims are the cause, is there room for negotiation to release personal guarantees of a bankrupt medical corporation?

If You Feel “Should I Consult Too?”

If your institution faces the possibility of large repayments for medical fees, has concerns about past claims, or has worries about business operations such as deteriorating operating profit margins or increasing debt, please consult with specialists in M&A brokerage or revitalization consulting promptly. Early consultation is the first step to reducing legal risks and maximizing the possibilities for business succession or revitalization.

As an M&A support institution certified by the Small and Medium Enterprise Agency, M&A Medical (CentralMedience Inc.) supports the business succession of medical corporations, hospitals, and clinics on a full success fee basis. Consultations are accepted with strict confidentiality. Free consultation here