Medical Corporations, the Sejong Medical Foundation in the 21st century (Attorney Park Jae-in, Counsel for the defendant-appellant)

Simsan City

January 16, 2019

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

In August 9, 2018, the revocation of the establishment permission granted by the Defendant to the Plaintiff is revoked.

1. Details of the disposition;

A. On June 7, 2013, the Plaintiff established and operated “(a hospital name omitted)”, which is a medical institution, in the area of the Simsan-si ( Address omitted) where the establishment of a medical institution was granted from the Mayor/Do Governor.

B. On November 25, 2016, the Nonparty, the representative of the Plaintiff, was sentenced to a judgment of conviction for one year and two years of suspended execution, with respect to the following facts: (a) the Nonparty, by deceiving the National Health Insurance Corporation, thereby deceiving the total sum of 63,842,330 won of the costs of health care benefit, was sentenced to a judgment of conviction for one year and two years of suspended execution.

The Nonparty included in the main text is the Plaintiff’s chief director, who operates the hospital name omitted. On February 17, 2014, the Nonparty: (a) provided medical treatment to Nonparty 2 from January 2, 2014 to March 31, 2014 by prescribing accelerators, voltages, etc. to Nonparty 2; and (b) claimed for medical care benefits costs of KRW 1,273,790 to the National Health Insurance Corporation; (c) however, Nonparty 2 had not received medical treatment at the above hospital by going out of and out of the hospital during the period of hospitalization. Nevertheless, the Nonparty, by deceiving the victim as above, received KRW 1,273,790 from the victim as medical care expenses on March 11, 2014; and (d) obtained KRW 3638,638,208 from October 1, 2013 to March 23, 2015.

C. The Nonparty appealed to the Daegu District Court [2016No3580, 5315 (combined)] on the ground that the sentencing of the said conviction is too heavy.

On April 20, 2017, the court issued an order to attend a law-abiding driving lecture for one year and six months, two years of suspended execution, and 40 hours to the Nonparty on April 20, 2017 (hereinafter “relevant criminal judgment”).

In other words, the Plaintiff appealed to the Supreme Court (2017Do6887) but on June 23, 2017, the relevant criminal judgment became final and conclusive as it is due to the dismissal of the appeal.

D. On August 9, 2018, the Defendant notified the Plaintiff that the permission to establish a medical institution was revoked pursuant to Article 64(1)8 of the Medical Service Act on the ground that the Plaintiff’s medical institution filed a false claim for medical expenses and was sentenced to imprisonment without prison labor or heavier punishment and the sentence became final and conclusive (hereinafter “instant disposition”).

【Ground for recognition】 The fact that there has been no dispute, the purport of whole pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Violation of the principle of statutory reservation

Article 64 (1) 8 of the Medical Service Act provides that the time when a medical institution founder has filed a false claim for medical expenses and was sentenced to imprisonment without prison labor or heavier punishment and the sentence becomes final and conclusive shall be subject to the grounds for revocation of permission

However, a person who opened (name omitted) is not the non-party who is a medical corporation, but who is merely the representative of the plaintiff.

Therefore, Article 64 (1) 8 of the Medical Service Act cannot be applied to the Plaintiff’s representative’s application of Article 64 (1) 8 of the Medical Service Act, on the sole basis of the fact that the Plaintiff’s representative filed a false claim for medical expenses and was sentenced to imprisonment without prison labor or a heavier punishment and the sentence became final and conclusive. It is unreasonable to transfer the Plaintiff’

Therefore, the instant disposition was unlawful since it violated the principle of statutory reservation.

(ii) the deviation and abuse of discretionary power;

Even if the grounds for the disposition are acknowledged, in full view of the following: (a) the Plaintiff was at a disadvantage that the Plaintiff is unable to operate a medical institution any longer; (b) the patient already hospitalized suffers from the influenite injury due to the suspension of a sudden medical practice; and (c) the Plaintiff was forced to discharge the patient; and (d) the Nonparty was suffering from financial difficulties to the extent that the Nonparty had maintained his/her director position until the judgment in the relevant criminal case became final and conclusive; and (e) the instant disposition constitutes a violation of discretionary authority or an abuse thereof.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Contents of the relevant provisions

Article 64(1) of the Medical Service Act provides, “Where a medical institution falls under any of the following subparagraphs, the Minister of Health and Welfare or the head of a Si/Gun/Gu may suspend its medical business within the scope of one year, revoke the permission for its establishment, or close the medical institution: Provided, That where it falls under subparagraph 8, he/she shall order the revocation of the permission for its establishment or the closure of the medical institution, and the closure of the medical institution may be ordered only to the medical institution reported pursuant to Articles 33(3) and 35(1) (main sentence).” Article 64(1)8 of the Medical Service Act provides, “when the medical institution founder has been sentenced to imprisonment without prison labor or heavier punishment

Meanwhile, according to Article 33(2) of the Medical Service Act, no person, other than a doctor, dentist, herb doctor, or midwife (as referred to in subparagraph 1), the State or a local government (as referred to in subparagraph 2), a corporation established for the purpose of rendering medical services (as referred to in subparagraph 3), a non-profit corporation (as referred to in subparagraph 4), a quasi-government institution under the Civil Act or a special Act on the Management of Public Institutions, a local medical center under the Act on the Establishment and Operation of Local Medical Centers, or the Korea Veterans Welfare and Healthcare Corporation under the Korea Veterans Welfare and Healthcare Corporation Act (as referred to in subparagraph

2) Whether the principle of statutory reservation is violated

In light of the above-related provisions, it is reasonable to interpret that “the founder of a medical institution” as referred to in Article 64(1)8 of the Medical Service Act means the person who is a natural person and the person who is a juristic person in the case of a medical corporation.

Therefore, it is lawful for the Defendant to take the instant disposition on the ground that the Defendant’s medical institution’s establishment of medical institution claims false medical expenses to the Plaintiff and was sentenced to imprisonment without prison labor or heavier punishment, and

A) A corporation shall be the subject of rights and obligations within the scope of purposes prescribed by its articles of incorporation in accordance with the provisions of law (Article 34 of the Civil Act); and an act of executing affairs through a representative; and the provisions on representation shall apply mutatis mutandis to a representative of a corporation (Article 59(2) of the Civil Act).

Therefore, as long as a juristic person appoints a representative, the legal effect and interest arising from his act naturally reverts to the juristic person (see Article 114 of the Civil Act). This applies likewise to the case where the representative inflicts damage on another person with respect to his duties, and also to the case of tort (see Article 35(1) of the

Furthermore, sanctions against violations of administrative regulations are imposed by taking advantage of the objective fact of violations of administrative regulations in order to achieve administrative purposes. Therefore, unlike sanctions under the Criminal Act, sanctions under the Criminal Act may be imposed even if there is no intention or negligence on the violator, barring special circumstances, such as where there is no justifiable reason to believe that the violation of administrative regulations is not caused.

Therefore, it is not reasonable to punish the representative's criminal act, but only if administrative sanctions are imposed based on the representative's criminal act, it is reasonable to view that the effect of such sanctions naturally belongs to the corporation.

B) The Medical Service Act classify a person who established a medical institution as a natural person and a medical corporation. However, the need to impose administrative sanctions on a person who established a medical institution upon having filed a false claim for medical expenses and having been sentenced to imprisonment without prison labor or a heavier punishment upon the final judgment of the sentence may not be deemed to vary depending on whether the person established a medical institution is a natural

C) In the current criminal law system, a person cannot be sentenced to imprisonment without prison labor, such as a fine, in addition to a corporation.

However, if the person who established a medical institution under Article 64(1)8 of the Medical Service Act strictly limits the medical institution itself, and the representative of a medical corporation was sentenced to imprisonment without prison labor or heavier punishment by filing a false claim for medical expenses, and the sentence becomes final and conclusive, it would result in an unreasonable result that does not constitute grounds for revocation of permission to establish a medical institution.

3) Whether the discretionary authority is deviates or abused

A) Whether an administrative act is a binding act cannot be uniformly defined, and it must be individually determined in accordance with the form of a provision, system, or text that forms the basis for the pertinent disposition (see Supreme Court Decision 97Nu21086, Apr. 28, 1998, etc.).

B) On the other hand, the proviso of Article 64(1) of the Medical Service Act provides that “However, in a case falling under subparagraph 8, the Medical Service Act shall order the cancellation of a license for the establishment of a medical institution or the closure of a medical institution.”

Therefore, in light of the form, structure, and language of the above provision, it is reasonable to interpret that the disposition of revocation of permission to establish a medical institution based on the proviso of Article 64(1)8 of the Medical Service Act is a binding act in which the discretion of the administrative agency is not allowed. Accordingly, the plaintiff's assertion in this part is without merit.

C) Even if the instant disposition is deemed a discretionary act with different legal views, comprehensively taking account of the following various circumstances, the circumstances alleged by the Plaintiff cannot be deemed as either exceeding the bounds of discretionary power or an abuse of such discretionary power.

① The Defendant shall induce a reasonable claim for medical expenses through the instant disposition, imposing strict administrative sanctions on those who violate the instant disposition, thereby promoting the soundness of the finance of national health insurance and securing transparency in the operation of medical institutions.

② However, the amount obtained by fraud by the Plaintiff is about KRW 63 million, and the number of times is about 68 times, and the period in which the Plaintiff unlawfully received is about 1 year, and the degree of violation is very serious.

③ Therefore, the instant disposition is more serious than the disadvantage the Plaintiff entered, and thus, it cannot be deemed that it violated the principle of proportionality as the public interest to be achieved by the Defendant is much more serious.

3. Conclusion

Therefore, the plaintiff's claim is without merit, and it is so decided as per Disposition.

(attached Form omitted)

Judges Han Jae-in (Presiding Judge)