Plaintiff 1 Cooperatives and three others (Attorney Kim Dong-dong, Counsel for the plaintiff-appellant)

National Health Insurance Corporation (Attorney Jeon Sung-sung, Counsel for defendant-appellee)

June 1, 2017

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The Defendant’s decision to recover each of the medical care benefit costs rendered to the Plaintiffs on March 17, 2016 is revoked.

1. Details of the disposition;

A. Establishment of the Plaintiff 1’s ○○ Hospital

Plaintiff 1 Cooperatives (hereinafter “Plaintiff Cooperatives”) established for the purpose of the establishment of medical facilities and medical institutions, the operation of pharmacies, etc., and established ○○ Hospital in the Seo-gu, Gwangju Metropolitan City on September 16, 2013, with the approval for establishment of the association from Gwangju Metropolitan City on December 11, 2014.

B. Notice of disposition related to authorization and permission against Plaintiffs 2, 3, and 4

On December 28, 2015, the chief prosecutor of the Gwangju District Prosecutor’s Office notified the Defendant of the disposition related to the crime of authorization and permission (hereinafter “instant disposition notification”) under the following purport: (a) on December 24, 2015, the chief prosecutor of the Gwangju District Prosecutor’s Office notified the Defendant of the disposition related to the crime of violation of the Medical Service Act (hereinafter “instant disposition”).

The Plaintiff 2, 3, and 4 violated the Medical Service Act regarding the establishment of the ○○○○ Hospital, which was included in the main text of the ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ University. Defendant 2 conspired to establish the △△△△△△ Hospital and continued to cause trouble to the employees of the hospital, including habitual arrears with wages, and obtained authorization for the establishment of the ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ Hospital. The ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ University’s establishment of the ○○○○○○ Hospital’s 1,000 members, and the Plaintiff’s 2, supra, planned to operate the ○○○ Hospital’s establishment of the Plaintiff.

C. The defendant's each disposition of this case

The Defendant notified the Plaintiffs on February 15, 2016 that ○○ Hospital will recover KRW 1,127,296,770 of the medical care benefit cost during the period of establishment (from December 11, 2014 to November 25, 2015) under Article 57 of the National Health Insurance Act, on the ground that the Defendant was a medical care institution established in violation of the standards for the establishment of Article 33(2) of the Medical Service Act in accordance with the instant disposition notice, and notified the Plaintiffs of the determination that ○○ Hospital will recover KRW 1,127,296,70 of the medical care benefit cost paid during the period of establishment (from November 25, 2015). On March 17, 2016, the Defendant notified the Plaintiffs of the determination that ○○ Hospital will recover KRW 1,127,296,70 of the medical care benefit cost as

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1, 2, Eul evidence Nos. 1, 2, and 3 (including branch numbers), the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

1) Since the Plaintiff Cooperative established ○○ Hospital as a consumer cooperative which was duly authorized to establish pursuant to the Consumer Cooperatives Act, it did not violate the Medical Service Act.

2) Article 27-2 of the Administrative Procedures Act provides, “Administrative agencies shall reflect the opinions submitted by the parties, etc. when rendering dispositions, if deemed that there is a substantial reason.” As such, administrative agencies should undergo sufficient deliberation and review on the opinions submitted by the parties, etc. However, on March 14, 2016, the Defendant did not undergo sufficient deliberation and review on the Plaintiffs’ opinions, such as sending a “written submission of opinions” submitted by the Plaintiffs by mail, and 30 minutes have not passed since the Plaintiffs’ submission of the written submission of opinions by mail, and did not provide the Plaintiffs with the opportunity to hear their opinions and to hear their opinions.

3) The Defendant, only after a violation of the Medical Service Act became final and conclusive in cases similar to the instant case, is a precedent that rendered the disposition of refunding medical care benefit costs. In light of such precedents, each of the instant dispositions is unlawful in violation of the principle of equality and the principle of self-regulation in the

B. Relevant provisions

It is as shown in the attached Form.

(c) Fact of recognition;

1) The prosecutor of the Gwangju District Prosecutor’s Office indicted Plaintiff 2, 3, and 4 on the charge that “Plaintiff 2, 3, and 4 violated the Medical Service Act, such as the instant disposition notification,” and the Gwangju District Court convicted Plaintiff 2, 3, and 4 of the charges (Seoul District Court 2015Gohap458), and the Gwangju District Court sentenced Plaintiff 2, 3, and 4 of August 12, 2016 to imprisonment with labor, etc. on the grounds that he/she was guilty of the charges.

2) The said conviction was appealed to Gwangju High Court 2016No342, but the appeal was dismissed on January 19, 2017, and Supreme Court Decision 2017Do2244 Decided May 17, 201, but the final appeal was dismissed and finalized as it is.

[Reasons for Recognition] Facts without dispute, entry of evidence Nos. 6 and 7, the purport of the whole pleadings

D. Determination

1) Whether there is a ground for disposition

Article 57(1) of the National Health Insurance Act provides that "cases where the medical care institution has received insurance benefit costs by fraud or other improper means" does not require the medical care institution to submit false data or actively conceal facts in order to receive the medical care benefit cost, and includes all acts of claiming and receiving medical care benefit costs in accordance with relevant Acts and subordinate statutes (see Supreme Court Decision 2008Du3975, Jul. 10, 2008). Further, Article 42(1)1 of the National Health Insurance Act provides that "medical care institutions established under the Medical Service Act" are limited to "medical institutions established under the Medical Service Act." Therefore, if medical care benefits such as providing medical treatment to patients at a medical institution not established lawfully in violation of Article 33(2) of the Medical Service Act are not the medical care institution that can claim the medical care benefit cost under the National Health Insurance Act, and thus, the medical institution is not legally entitled to receive the medical care benefit cost, and if it has received it in violation of such provision, it constitutes unjust enrichment to recover all the medical care benefit cost (see Supreme Court Decision 2619Du167Du.

Comprehensively taking account of the aforementioned facts and evidence, it is reasonable to view that Plaintiff 2, 3, and 4, a non-medical person, established and operated the ○○ Hospital in a formal manner in order to deem it legitimate. As such, the act of receiving medical care benefits from the Plaintiff’s establishment of the Plaintiff Cooperative in the name of the Plaintiff Cooperative constitutes a case where the medical care benefits are paid in the form of fraudulent or other unlawful manner pursuant to Article 57(1) and (2) of the National Health Insurance Act. Accordingly, it is reasonable to view that the Defendant may have the Plaintiffs pay the amount equivalent to the medical care benefits to the Plaintiffs pursuant to Article 57(1) and (2) of the National Health Insurance Act. Accordingly, the Plaintiff’s assertion that the grounds for disposition under Article 57 of the National Health Insurance Act exist as the grounds for disposition exist.

2) Whether the Administrative Procedures Act is in violation

On the other hand, it cannot be readily concluded that the defendant did not undergo sufficient deliberation and review while rendering the instant disposition or did not provide the plaintiffs with an opportunity to hear their opinions. In light of the fact that the defendant respondeds to the fact that the recovery disposition of medical care benefit costs is making a decision of recovery in accordance with the relevant provisions of the National Health Insurance Act and the Medical Service Act, etc. according to the investigation results by the investigative agency, and that the above defendant's response appears to be appropriate for the plaintiffs' opinions, the defendant is deemed to have given a reasonable answer after sufficiently reviewing the plaintiffs' opinions submitted. Accordingly, this part of the prior plaintiffs' assertion on different premise is rejected.

3) Whether the principle of equality and the principle of self-regulation in administration are violated

The principle of self-regulation in administration refers to the principle that an administrative agency should make the same decision as the administrative practice in the same case, barring any special circumstances. Thus, in order to apply such principle, there is an administrative practice of an administrative agency. However, as alleged by the Plaintiffs, it is insufficient to deem that such administrative practice has been established on the sole basis of the fact that the Defendant rendered a disposition to redeem medical care benefit costs after the judgment of conviction became final and conclusive due to a violation of the Medical Service Act, as alleged by the Plaintiffs. (In addition, most cases are deemed to have taken place prior to the final and conclusive judgment as in the instant case, and the criminal judgment against Plaintiffs 2, 3, and 4 was final and conclusive at the time of the closing of argument in the instant case). Accordingly, the Plaintiff’s assertion on this part on the premise that there

3. Conclusion

The plaintiffs' assertion is not correct, and all of them are dismissed. It is so decided as per Disposition.

[Attachment]

Judge Lee Jong-hun (Presiding Judge)