[1] Method of determining the scope of “medical institution established under the Medical Service Act” recognized as a medical care institution under the Medical Care Assistance Act

[2] In a case where a person who is a qualified and licensed medical person established a medical institution under the Medical Service Act and provided medical benefits under the Medical Care Act to a beneficiary of medical benefits, whether the medical institution may refuse to pay medical benefits under the Medical Care Assistance Act or recover the amount equivalent to medical benefits costs on the ground that such person violated the prohibition of duplicate establishment (the main sentence of Article 33(8)) or the prohibition of nominal establishment (Article 4(2)) (negative)

[1] Article 9 (1) 1 of the Medical Care Assistance Act / [2] Articles 1, 7 (1), 9 (1), 11, and 23 (1) of the Medical Care Assistance Act; Articles 1, 33 (2) 1 and (8), 87, 87-2 (2), and 90 of the Medical Care Assistance Act

[2] Supreme Court Decision 2015Du36485 Decided May 30, 2019 (Gong2019Ha, 1310)

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

Ansan Market (Law Firm Chang, Attorneys Park Young-ok et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2017Nu55635 decided November 24, 2017

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. The Medical Care Assistance Act is an Act enacted for the purpose of contributing to the improvement of national health and the promotion of social welfare by providing medical benefits to those who have difficulties in living (Article 1). As to the illness, injury, childbirth, etc. of a beneficiary, the Medical Care Assistance Act provides that “medical benefits, such as diagnosis, examination, provision of medicine (pharmaceuticals), and materials for medical treatment, treatment, surgery, and other medical treatment,” and provides that the head of Si/Gun/Gu shall pay expenses incurred in the medical benefits provided by an institution providing medical benefits, including “medical institutions established under the Medical Service Act” (Articles 9(1) and 11).

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 citizens can benefit from high-quality medical services (Article 1); and Article 33(2)1 of the Act provides that only a doctor, dentist, oriental medical doctor, or midwife (hereinafter “medical person”); medical personnel are prohibited from establishing and operating at least two medical institutions (main sentence of Article 33(8); hereinafter “the prohibition of double establishment”); and restricts medical personnel from establishing and operating medical institutions under the name of any other medical personnel (Article 4(2); hereinafter “the prohibition of double establishment”).

Article 33(2) of the Medical Service Act provides a penal provision for a person employed by a person who has established a medical institution (Article 87) as well as a person who has not been disqualified from establishing a medical institution (Article 90). However, in the event of a violation of Article 33(8), there is a penal provision for medical personnel who has established and operated at least two medical institutions (Article 87-2(2)), but there is no penal provision for those who have performed medical practice under employment by such medical personnel, and there is no penal provision for those who performed medical practice. In the event of a violation of Article 4(2), there is no penal provision for medical personnel who established and operated a medical institution under the name of another medical person and those who provided medical practice under employment by such medical personnel.

The purpose of the Medical Care Assistance Act and the Medical Service Act is to protect and promote national health and health of citizens. However, while the Medical Care Assistance Act provides for the provision of medical benefits suitable for the treatment of diseases, the Medical Service Act provides for the provision of medical care benefits to all citizens so that all citizens can enjoy high-quality medical care benefits, the legislative purpose and the subject of regulation is different. Therefore, the scope of “medical institutions established under the Medical Care Act” recognized as an institution providing medical care benefits under the Medical Care Assistance Act ought to be determined by considering whether the scope of “medical institutions established under the Medical Care Act” is appropriate as an institution providing medical care benefits under the Medical Care Assistance

Although the aforementioned provisions of the Medical Service Act limits the establishment and operation of more than one medical institution and the establishment or operation of a medical institution under the name of another medical person, there is no intrinsic difference in that the medical institution was established by a medical person who is allowed to establish a medical institution. Moreover, it is difficult to readily conclude that there is a qualitative difference as medical benefits for treating diseases, etc. compared with the medical treatment act performed by a normal person who established a medical institution, barring any other circumstances, such as falling short of the medical standard prescribed in the Medical Care Assistance Act or exceeding the said standard. The Medical Service Act does not provide any penal provision for a person employed by a medical person who established and operates a medical institution, in violation of the foregoing provisions.

In full view of the legislative purport, contents, and structure of the Medical Care Assistance Act and the Medical Service Act, if a person who is qualified and licensed as a medical practitioner established a medical institution pursuant to the Medical Service Act and provided the medical benefits prescribed in the Medical Care Assistance Act to beneficiaries of medical benefits, the act of receiving medical benefits costs should not be deemed as “act of receiving medical benefits costs by fraud or other improper means” solely on the ground that the medical institution violated the prohibition provision prohibiting overlapping establishment under the Medical Service Act or prohibiting establishment of the name, etc. Therefore, the act of receiving medical benefits should not be deemed as “act of receiving medical benefits costs by fraud or other improper means.” Therefore, on the ground of the foregoing, the payment of medical benefits costs under the Medical Care Assistance Act cannot be refused or recovered (see, e.g

2. According to the reasoning of the lower judgment and the record, the following facts are revealed.

A. On August 24, 2012, the Plaintiff obtained permission to establish the “○○ Hospital” (hereinafter “instant hospital”) under its name, and thereafter claimed expenses incurred in relation to medical benefits provided by the instant hospital to the Defendant.

B. The Defendant received notification from the investigative agency that “the instant hospital violated Article 33(8) of the Medical Service Act prohibiting the duplicate establishment and operation thereof,” and on March 28, 2016, issued the instant disposition against the Plaintiff on the ground that “the instant hospital does not constitute a medical institution established under the Medical Service Act, and thus is not entitled to claim medical care costs,” thereby recovering KRW 217,503,190, total medical care costs paid to the instant hospital after obtaining permission under the name of the Plaintiff, based on Article 23(1) of the Medical Care Assistance Act.

C. Meanwhile, the Nonparty was convicted of facts constituting a violation of the Medical Service Act by employing the Plaintiff and establishing the instant hospital under the name of the Plaintiff, etc., and actually operating the hospital.

3. Examining these facts in light of the aforementioned legal principles, if the Plaintiff, who is qualified and licensed as a medical person, obtained permission to establish the instant hospital under his/her name pursuant to the Medical Service Act, and received medical expenses from the Defendant after providing the beneficiary with medical benefits for the treatment of a disease, etc., the instant hospital cannot recover the amount equivalent to the medical expenses on the ground that the instant hospital overlapping the Nonparty’s medical institution operated by the Nonparty or opened and operated the Plaintiff under its name.

In the same purport, the lower court determined that the instant hospital constitutes an institution providing medical benefits under the Medical Care Assistance Act, and that the medical care costs paid by the Plaintiff were not subject to restitution of unjust enrichment. In so doing, the lower court did not err by misapprehending the legal doctrine on the “medical institution established under the Medical Service Act” under Article 9(1)1 and the “illegal enrichment restitution” under Article 23

4. The Defendant’s appeal is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Dong-won (Presiding Justice)