In a case where a person qualified and licensed as a medical person established a medical institution pursuant to the Medical Service Act and provided health insurance policyholders or their dependents with health care benefit, but a medical person who already established and operated another medical institution has violated the Medical Service Act by practically establishing and operating the said medical institution, or by establishing and operating the said medical institution under the name of another medical person, whether such circumstance alone can recover the amount equivalent to the health care benefit costs refused or received (negative)

The purpose of the National Health Insurance Act and the Medical Service Act is to protect and promote national health and health of citizens. However, while the National Health Insurance Act provides for the provision of medical care benefits suitable for the treatment of diseases, the Medical Service Act provides for medical personnel, medical institutions, and medical practices to ensure that all citizens enjoy high-quality medical care, it is difficult to view the legislative purpose and subject to regulation. Therefore, the scope of “medical institutions established under the Medical Service Act,” which are recognized as medical care institutions under the National Health Insurance Act, ought to be determined by taking into account such differences between the National Health Insurance Act and the Medical Service Act, as institutions that provide medical care benefits prescribed under the National Health Insurance Act

In addition, Articles 33(8) main text and 4(2) of the Medical Service Act restrict the establishment and operation of at least two medical institutions, and the establishment or operation of a medical institution under the name of another medical person. However, there is no intrinsic difference in that the medical institution was established by a medical person who is permitted to establish a medical institution. Moreover, it is difficult to readily conclude that there is a qualitative difference in the medical care benefits for the treatment of diseases, compared to the medical treatment provided by a medical person who established a normal medical institution, barring any other circumstances, such as falling short of the medical care benefits standard prescribed in the National Health Insurance Act or exceeding the said standard. The Medical Service Act does not provide a penal provision for those persons employed by a medical person who established and operated a medical institution in violation of each of the above provisions of the Medical Service Act, who established and operated the medical institution, and provided medical services in violation of

Comprehensively taking account of such circumstances, if a person qualified and licensed as a medical person established a medical institution pursuant to the Medical Service Act and provided health insurance policyholders or their dependents with health care benefit prescribed in the National Health Insurance Act, even if a medical person who already established and operated another medical institution actually established and operated the said medical institution, or a medical person who established and operated the said medical institution under the name of another medical person violates the Medical Service Act, such circumstance alone is not sufficient to refuse the payment of health care benefit on the ground that the given medical institution does not constitute “medical institution established under the Medical Service Act,” which is a health care institution that can provide health care benefit under the National Health Insurance Act, or to recover the amount equivalent to the health care benefit benefit on the ground that the given medical institution’s receipt of health care benefit constitutes “the act of receiving the health care benefit

Articles 1, 41(1), 42(1), and 47(1) of the National Health Insurance Act; Article 1, 4(2), 33(2)1 and (8), and 90 of the Medical Service Act

Plaintiff (Law Firm LLC et al., Counsel for the plaintiff-appellant)

Plaintiff Intervenor 1 and one other (Law Firm Ba, Attorneys Lee In-hwa et al., Counsel for the plaintiff-appellant)

National Health Insurance Corporation (Attorney Kim Han-soo, Counsel for defendant-appellant)

Seoul High Court Decision 2014Nu57449 decided December 23, 2014

The lower judgment is reversed, and the case is remanded to the Seoul High Court. The Plaintiff’s motion to intervene in the case is dismissed. The litigation cost incurred from the participation is borne by the Plaintiff’s Intervenor.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 2

A. (1) The National Health Insurance Act was enacted for the purpose of contributing to the improvement of national health and the promotion of social security by providing citizens with insurance benefits for the prevention, diagnosis, and rehabilitation of diseases and injury, for childbirth and death, and for the improvement of health (Article 1). The National Health Insurance Act provides health care benefits for diseases, etc. of the insured and their dependents, including “medical examination, examination, medicine (pharmaceuticals), provision of materials for medical treatment, treatment, surgery, and other treatment, etc.” (Article 41(1)), and the National Health Insurance Corporation shall pay the costs of health care benefits provided by health care institutions, including “medical institutions established under the Medical Service Act” (Articles 42(1) and 47(1)).

In addition, the Medical Service Act was enacted for the purpose of protecting and improving health of the people by providing for matters necessary for national medical fees so that all the people can benefit from high-quality medical treatment (Article 1); and, in addition, Article 33(2)1 provides that only a doctor, dentist, oriental medical doctor, or midwife (hereinafter “medical person”); medical personnel shall not establish and operate at least two medical institutions (the main sentence of Article 33(8); hereinafter “the prohibition of double establishment”); medical personnel shall not establish or operate a medical institution under the name of another medical personnel (Article 4(2); hereinafter “the prohibition of double establishment”); and in combination with the main sentence of Article 33(8), the medical personnel shall not establish or operate a medical institution (hereinafter “the prohibition of double establishment”).

Meanwhile, Article 33(2) of the Medical Service Act provides a penal provision (Article 90) for a person employed by not only a person who has established a medical institution but also a person who is not eligible to establish a medical institution, as well as a person who has been employed by a “person who is not eligible to establish a medical institution.” On the other hand, in the case of violation of Article 33(8), there is a penal provision for a medical person who established and operated two or more medical institutions, but there is no penal provision for a person employed by the medical person, and there is no penal provision for a person who performed a medical act. In the case of violation of Article 4(2), there is no penal provision for a medical person who established and operated

(2) As can be seen, the National Health Insurance Act and the Medical Service Act are the same purpose in that they are the Act for the Protection and Promotion of Public Health and Health, but the National Health Insurance Act provides for the provision of medical care benefits suitable for the treatment of diseases, whereas the Medical Service Act provides for medical personnel, medical institutions, and medical care to ensure that all citizens enjoy high-quality medical care, and it is difficult to view that the legislative purpose and the subject of regulation is the same. Therefore, the scope of “medical institutions established under the Medical Service Act,” which are recognized as medical care institutions under the National Health Insurance Act, ought to be determined by taking into account the difference between the National Health Insurance Act and the Medical Service Act, as an institution that provides

In addition, each of the instant provisions of the Medical Service Act limits the establishment and operation of at least two medical institutions, and the establishment or operation of a medical institution under the name of another medical person. However, there is no intrinsic difference in that such medical institution was established by a medical person permitted to establish a medical institution. Moreover, it is difficult to readily conclude that there is a qualitative difference in the medical care benefits for treating diseases compared with those for which a person who established a normal medical institution falls short of, or exceeds, the standards for medical care benefits prescribed in the National Health Insurance Act, barring any other circumstances such as falling short of, the standards for medical care benefits prescribed in the National Health Insurance Act. The Medical Service Act, in violation of each of the instant provisions of the Medical Service Act, did not stipulate any penal provision against

Comprehensively taking account of such circumstances, if a person qualified and licensed as a medical person established a medical institution pursuant to the Medical Service Act and provided health insurance policyholders or their dependents with health care benefit prescribed in the National Health Insurance Act, even if a medical person who already established and operated another medical institution actually established and operated the said medical institution, or a medical person who established and operated the said medical institution under the name of another medical person violates the Medical Service Act, such circumstance alone should not be deemed to have refused the payment of health care benefit on the ground that the given medical institution does not constitute “medical institution established under the Medical Service Act,” which is a health care institution that can provide health care benefit under the National Health Insurance Act, or on the ground that the given medical institution’s receipt of health care benefit constitutes “the act of receiving the health care benefit by fraud or other improper means.”

B. Review of the reasoning of the lower judgment and the reasoning of the first instance judgment cited by the lower court reveals the following facts.

(1) Nonparty 1 and Nonparty 2 obtained permission from the mayor of Ansan in around 2008 to establish the “○○ Hospital” (hereinafter “instant hospital”).

(2) The title holder of the instant hospital was changed to the name of the Plaintiff on August 24, 2012 following two changes. However, even after the change in the name of the Plaintiff, Nonparty 1 actually operated the instant hospital, and the Plaintiff was only the doctor employed by Nonparty 1.

(3) The Defendant was notified by the investigative agency that “the instant hospital violated Article 33(8) of the Medical Service Act which prohibits double establishment and operation.” Accordingly, on January 29, 2014, the Defendant rejected the payment of medical care benefit costs from December 27, 2013 to the Plaintiff on the ground that “the instant hospital was in violation of Article 33(8) of the Medical Service Act, and is not a medical institution established under the Medical Service Act, and thus is not eligible to claim medical care benefit costs” (hereinafter “instant disposition”).

(4) On the other hand, Nonparty 1 was convicted of facts constituting a violation of the Medical Service Act, on the grounds that he employed the Plaintiff, etc. and established the instant hospital under the name of the Plaintiff, etc., and actually operated it directly.

C. Examining these facts in light of the legal principles as seen earlier, if the Plaintiff, who is qualified and licensed as a medical person, obtained permission to establish the instant hospital in its name under the Medical Service Act, and the instant hospital provided medical care benefits for the treatment of diseases to the insured of the health insurance or patients who are their dependents, and thereafter claimed medical care benefits against the Defendant, the instant hospital cannot refuse the payment of the medical care benefits on the ground that it is a medical institution operated by Nonparty 1 overlappingly.

D. Nevertheless, the lower court determined that the instant disposition rejecting the payment of medical care benefit costs claimed by the Plaintiff was lawful on the grounds that the instant hospital was not a medical institution established and operated lawfully under the Medical Service Act, and thus it was impossible to provide medical care benefits. In so determining, the lower court erred by misapprehending the legal doctrine on medical institutions that can provide medical care benefits under the National Health Insurance Act, thereby adversely affecting

2. Determination as to the legitimacy of the Plaintiff’s motion for intervention by the Intervenor

In order to intervene in a specific litigation case in order to assist one of the parties, there must be an interest in the outcome of the pertinent litigation. The term “interest” refers to legal interest, not in fact, economic or emotional interests, but in legal interests (see, e.g., Supreme Court Decision 2007Da16885, Jun. 28, 2007). The interest asserted by the Plaintiff’s Intervenor cannot be deemed a legal interest in the outcome of the instant lawsuit. Thus, the said application for intervention is unlawful because it does not meet the requirements for intervention.

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. The Plaintiff’s motion for intervention by the Intervenor is dismissed, and the litigation cost incurred by the intervention is borne by the Intervenor. It is so decided as per Disposition by the assent of all participating Justices

Justices Lee Dong-won (Presiding Justice)