Whether the act of establishing a medical institution by lending the name of a medical person qualified to establish a medical institution under the Medical Service Act, such as a non-profit corporation, etc., from a person eligible to establish a medical institution violates Article 33(2) of the Medical Service Act (negative)

Article 33(2) of the Medical Service Act prohibits, in principle, the establishment of a medical institution by any person other than a medical person, medical corporation, or non-profit corporation, etc., and Article 87(1)2 of the same Act provides that any person who violates such provision shall be punished by imprisonment with labor for not more than five years or by a fine not exceeding twenty million won. The purpose of Article 87(1)2 of the same Act is to establish a sound order in medical services by strictly limiting the license to establish a medical institution to a medical person who has medical expertise or a person with a public nature, and to prevent risks to national health that may occur when a medical institution is established for profit-making purposes. The act of establishing a medical institution prohibited under the Medical Service Act refers to the act of a non-medical person who takes the lead of the recruitment and management of the facilities and human resources of a medical institution, the establishment report, the performance of medical services, the raising of funds necessary, and the transfer of the operational performance of the establishment of a medical institution. In light of the legislative intent and the meaning of prohibited establishment, even if a medical institution is established under its name, such act alone cannot be deemed to violate Article 3

Articles 33(2) and 87(1)2 of the Medical Service Act

Supreme Court Decision 2004Do3874 Decided September 24, 2004, Supreme Court Decision 2004Do7245 Decided February 25, 2005, Supreme Court Decision 2009Do2629 Decided October 27, 201 (Gong201Ha, 2478)

Defendant 1 and five others

Defendants

Attorneys Kim Jong-tae et al.

Seoul Southern District Court Decision 2013No2225 decided May 29, 2014

The part of the judgment below as to Defendant 2, 3, and 4 and the part as to the violation of the Medical Service Act committed by Defendant 5 under employment by a person who is not entitled to establish a medical institution and performed medical practice, is reversed, and this part of the case is remanded to the Seoul Southern District Court Panel Division. The remaining appeals by Defendant 1 and 6 and by Defendant 5 are dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the appeal related to ○○○○, a non-indicted 1’s association

A. As to Defendant 3 and 4’s grounds of appeal

(1) Judgment on the violation of the Medical Service Act

(A) The summary of this part of the facts charged is as follows.

No person may establish a medical institution, other than a doctor, herb doctor, dentist, midwife, State, local government, medical corporation, non-profit corporation or quasi-governmental institution under the Civil Act and Special Act.

Defendant 2, the representative director of Nonindicted Incorporated Association 1, lent the name of Nonindicted Incorporated Association 1 so that it can establish a medical institution to Defendant 3, who is an oriental medical doctor, and Defendant 3, while operating a medical institution, shall pay KRW 100-1.5 million per month to Defendant 2 as the fee for the name transfer. Defendant 4 conspiredd to serve as the head of the hospital established by Defendant 3 after he/she was appointed as the head of the Seo-gu Branch of Gwangju Metropolitan City, Gwangju Metropolitan City.

On January 18, 2008, Defendant 3 and Defendant 4 established a medical institution under the name of “Nonindicted 1, an incorporated association of the Republic of Korea,” after employing the employees.

Accordingly, Defendant 3 and Defendant 4 established a medical institution in collusion with Defendant 2, who is not a doctor, etc., from January 18, 2008 to January 12, 2010.

(B) The lower court affirmed the first instance judgment convicting the said Defendants of this part of the charges on the ground that: (a) if a medical person conspireds to establish a non-medical person’s medical institution and processes it, Defendant 3 and 4 constitutes a co-principal of a violation of the Medical Service Act due to the establishment of an unqualified medical institution; and (b) Defendant 3 and 4 conspired with other co-defendants, such as Defendant 2, in a successive or implicit manner

(C) We cannot accept the judgment of the court below.

1) Article 33(2) of the Medical Service Act prohibits, in principle, the establishment of a medical institution by a medical person, medical corporation, or any other person, other than a non-profit corporation, from establishing a medical institution. Article 87(1)2 of the same Act provides that a non-medical person shall be punished by imprisonment with labor for not more than five years, or by a fine not exceeding twenty million won, if such person violates the foregoing provision, in order to establish a sound medical order and prevent risks to national health that may arise from the establishment of a medical institution for profit-making purposes (see Supreme Court Decision 2004Do7245, Feb. 25, 2005). The aforementioned provision of the Medical Service Act provides that a non-medical person shall be punished by a violation of Article 87(1)2 of the same Act (see Supreme Court Decision 2004Do7245, Oct. 27, 2011; Supreme Court Decision 2004Do3294, Apr. 29, 2002).

2) The record reveals the following facts.

① Defendant 3, an oriental medical doctor, employed Defendant 4 as the head of office in Gwangju Metropolitan City, and was registered as a bad credit holder while establishing and operating a Korea Institute of △△△△△. After that, Defendant 3, as a plan to newly establish a Korea Institute in the name of an oriental medical doctor employed by another oriental medical doctor, proposed that Nonindicted 2 pay KRW 1 million monthly membership fees and establish a Korea Institute in the name of Nonindicted Incorporated Association 1 (hereinafter “the Federation of this case”) while carrying out the installation of an internal facility in the name of an oriental medical doctor employed by another oriental medical doctor.

② Defendant 3 consented to the proposal above by Nonindicted 2, with the name of the competent public health clinic as “○○○○○○○, an incorporated association,” and reported the establishment of a medical institution under the name of the instant franchise association. Defendant 4 was appointed as the head of the office, and Defendant 4 was appointed as the head of the office in the first instance trial as the head of the management department, and operated the Gwangju ○○○○○○○○.

③ Defendant 3, around September 2008, employed Nonindicted 3 as an oriental medical doctor who will treat on his behalf, while around around around around 2008 at the second floor of the Gangseo-gu Seoul ( Address omitted), in order to operate the “○○○○ Medical Center” on his behalf. Defendant 4 was in charge of the operation of the Gwangju○ Medical Center. Defendant 4 performed the duties of the Gwangju ○○ Medical Center, including the execution of funds, according to Defendant 3’s instruction.

3) Examining the above facts in accordance with the legal principles as seen earlier, it cannot be deemed that there was any defect in the license requirement of an oriental medical doctor merely because Defendant 3 was registered as a bad credit holder, and there is no reason to deem that other person than Defendant 3 was in charge of leading the establishment and operation of the Gwangju International Medical Center (it is only the fact that Defendant 4, even if based on the above facts charged, he decided that Defendant 3 will work as the office manager of the hospital established by Defendant 3), and even if Defendant 3 had reported the establishment of a medical institution by lending the name of the association of this case from Defendant 2 through Nonindicted 2, it cannot be deemed as an act of establishing a medical institution by an unqualified person prohibited by the Medical Service Act, and there is no other circumstance to find the Defendant guilty of this part of the facts charged.

Nevertheless, the judgment of the court below convicting Defendant 3 and Defendant 4, who is an employee of the Defendant, of violation of the Medical Service Act, is erroneous in the misapprehension of legal principles as to the establishment of medical institutions by disqualified persons, and by recognizing facts beyond the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules.

(2) Determination on the fraud part

(A) The summary of this part of the facts charged is that Defendant 3 and 4 conspired with Defendant 2 by receiving the medical institution established under the Medical Service Act and are not able to claim the medical care benefit cost under the National Health Insurance Act, and Defendant 3 and 5, an oriental medical doctor employed by Defendant 3 and the Korean Medical Doctor, from January 18, 2008 to January 12, 2010, submitted the statement of the medical care benefit cost to the Health Insurance Review and Assessment Service for the examination. Upon receiving the notice of the result of the examination, Defendant 3 and 5 submitted the statement of the medical care benefit cost to the Health Insurance Review and Assessment Service and submitted the statement of the medical care benefit cost to review. Defendant 227,852,230 won (Defendant 3, 213,85,930 won) as the medical care benefit cost for the victim who believed

(B) As seen earlier, Defendant 3’s establishment of the Gwangju ○ Institute and the fact that Defendant 3 cannot be deemed as not entitled to establish a medical institution to Defendant 3 is identical. Therefore, the lower court found Defendant 3 and 4 guilty of this part of the charges, which erred by misapprehending the legal doctrine on the establishment of a medical institution by an unqualified person, and thereby finding facts beyond the bounds of the principle of free evaluation of evidence against logical and empirical rules, thereby adversely affecting the conclusion of the judgment.

B. As to Defendant 2’s appeal (ex officio judgment)

The summary of this part of the facts charged is as follows: (a) one who is neither a doctor nor a person is unable to establish a medical institution; (b) Defendant 2 lent the name of the association of this case so that it can establish a medical institution to Nonindicted 2; (c) Nonindicted 2 conspired to pay KRW 100,000 per month under the name of the name of the name of the association of this case; and (d) provided a treatment room, a water treatment room, etc. in Gwangju-gu ( Address omitted); (c) Defendant 3 and employees provided a medical institution under the name of “the National Health Insurance Corporation, ○○○○, an incorporated association,” and (d) established a medical institution (hereinafter “violation of the Medical Service Act”); (c) in cases where a person who is not a founder of a medical institution hires a doctor for medical practice in violation of the Medical Service Act, he was unable to file a claim for medical care benefit benefits under the National Health Insurance Act; and (d) Nonindicted 2 provided a false statement from the victim to the National Health Insurance Corporation (hereinafter “Defendant 237, etc.”).

The lower court upheld the first instance judgment that found Defendant 2 guilty of all the facts charged.

However, since the judgment of the court below on the part related to the establishment of the Gwangju High Military Institute by Defendant 3 and 4 as seen earlier is common to the judgment of the court below on each of the facts charged against Defendant 2, the court below affirmed the judgment of the court of first instance which convicted Defendant 2 of this part of the facts charged, which erred by misapprehending the legal principles on the establishment of medical institutions by disqualified persons, and by recognizing facts beyond the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules

C. As to Defendant 5’s appeal (ex officio judgment)

(1) The summary of this part of the facts charged is as follows: from February 20, 2009 to June 1, 2009, Defendant 3 and Defendant 4 were aware of the establishment of medical institution by lending the name of the association of this case, and received KRW 4 million each month and provided medical treatment under employment by a person who is unable to establish a medical institution; and the court below affirmed the first instance judgment convicting Defendant 5 of this part of the facts charged against this part of the facts charged against Defendant 5.

(2) However, we cannot accept the above determination by the court below.

First, as seen earlier, Defendant 3 cannot be deemed an unqualified person to establish a medical institution. Next, as seen earlier, Defendant 4 was employed by Defendant 3 and served as the secretary of Gwangju ○○○ Council. Thus, even if he served any role in the process of employing Defendant 5 as an employee of Gwangju ○ Council, it cannot be deemed that Defendant 4 employed Defendant 5, and there is no other circumstance to find Defendant 4 guilty of this part of the facts charged.

(3) Nevertheless, the court below affirmed the judgment of the court of first instance which found Defendant 5 guilty of this part of the charges against Defendant 5 on the ground that Defendant 5 was employed by a person who is not entitled to establish a medical institution. In so doing, the court below erred by misapprehending the legal principles on qualifications for establishing a medical institution, and by recognizing facts beyond the bounds of the principle

2. As to the remaining grounds of appeal on the facts charged

A. As to the defendant 1, 5, and 6's assertion of unfair sentencing

According to Article 383 subparag. 4 of the Criminal Procedure Act, only in cases where death penalty, life imprisonment, or imprisonment or imprisonment without prison labor for more than ten years has been imposed, an appeal on the grounds of unfair sentencing is permitted. As such, in cases where Defendant 1, 6, and Defendant 5’s non-qualified medical institution was imposed for a violation of the Medical Service Act due to the establishment of a medical institution, and a more minor sentence is imposed, the argument that the

B. As to the remaining grounds of appeal by Defendant 1, 2, 3, 5, and 6

(1) Judgment on Defendant 1

Examining the evidence duly adopted and examined by the lower court and the first instance court, it is justifiable for the lower court to have determined that all the facts charged against Defendant 1 was guilty on the grounds stated in its reasoning. In so doing, the lower court did not err by misapprehending the legal doctrine regarding a corporate body, by misapprehending the principle of no punishment without the law or evidence trial, by omitting necessary judgment, or by exceeding the bounds of the principle of free evaluation

(2) Judgment on Defendant 2

Examining the evidence duly adopted and examined by the lower court and the first instance court, it is justifiable to have determined that the lower court convicted Defendant 2 of all the charges except for Defendant 2’s violation of the Medical Service Act and fraud in relation to the establishment of the Gwangju ○○ Council. In so doing, the lower court did not err by misapprehending the legal doctrine on the legal error, the admissibility of evidence of unfavorable confession, fraud or conspiracy joint principal offense, or failing to exhaust all necessary deliberations, or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules.

(3) Determination as to Defendant 3 and 5

Examining the evidence duly adopted and examined by the lower court and the first instance court, it is justifiable to have determined that the lower court convicted Defendant 3 and Defendant 5 of all the charges on the violation of the Medical Service Act and the fraud related to the establishment of the second floor of ○○○○○○ in the Gangseo-gu Seoul Metropolitan Government ( Address omitted) Building on the grounds as stated in its reasoning. In so doing, the lower court did not err by misapprehending the legal doctrine on the establishment of medical institutions by disqualified persons, or by exceeding the bounds of the principle

(4) Judgment on Defendant 6

Examining the evidence duly adopted and examined by the lower court and the first instance court, the lower court’s determination that all charges against Defendant 6 were guilty on the grounds stated in its reasoning is justifiable. In so doing, it did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules.

3. Scope of reversal

Of the judgment of the court below, Defendant 2 and 3’s violation of the Medical Service Act and fraud related to the establishment of the Gwangju District Council. Thus, the remaining judgment of the court below as to Defendant 2 and Defendant 3 against whom one sentence is imposed should also be reversed in relation to concurrent crimes under the former part of Article 37 of the Criminal Act. Meanwhile, the part on Defendant 5’s violation of the Medical Service Act and fraud due to the establishment of medical institution by Defendant 5 (hereinafter “the part on violation of the Medical Service Act and fraud”) in the judgment of the court below are in relation to concurrent crimes under the former part of Article 37 of the Criminal Act (hereinafter “the part on violation of the Medical Service Act”) with the grounds for reversal, “the part on the violation of the Medical Service Act by Defendant 5 employed by a person who is not a medical institution founder.” However, as long as the first instance court maintained by the court below set a single imprisonment as to the violation of the Medical Service Act and the part on the violation of the Medical Service Act separately from the above punishment, this part should be separately treated in the lawsuit.

4. Conclusion

Therefore, without examining the remainder of Defendant 2’s remaining grounds of appeal, the part as to Defendant 2, 3, and 4 among the judgment below and the part as to the violation of the Medical Service Act due to Defendant 5’s employment by a person who is not a medical institution founder, is reversed, and this part of the case is remanded to the court below for further proceedings consistent with this Opinion. Defendant 1 and 6 and the remaining appeals by Defendant 5 are dismissed, respectively. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Sang-hoon (Presiding Justice)