Jakarta. The Corruption Eradication Commission (KPK) is investigating alleged fraud involving funds from the national healthcare insurance scheme, BPJS, in at least three hospitals, an official said on Wednesday.

The suspected scandal has cost BPJS tens of billions of rupiah.

“The KPK leadership board has decided on a criminal investigation into this case, whether by prosecutors or a KPK team. There are strong indications of fraud at those three hospitals,” said Pahala Nainggolan, the deputy chairman in charge of corruption prevention.

He didn’t mention the three hospitals by name but said one is located in Central Java and two are based in North Sumatra.

They have requested BPJS reimbursements using false claims for services that were never provided or were unnecessary, Pahala said.

“There are no patients and no medical therapies, but they have medical documents -- that's what we call phantom billing,” Pahala explained.

Other types of fraud involve inflating bills and manipulating patient diagnoses.

Pahala said a joint team from the KPK, BPJS, the Health Ministry, and state auditors has investigated medical claims from hospitals and identified at least eight types of fraud.

However, the criminal investigation will focus on phantom billing and diagnosis manipulation, he added.

The team also found a conspiracy involving doctors, hospital management, and supporting staff to produce false medical claims.

They organized social activities in which unsuspecting participants were required to hand over their ID cards, which were then used to apply for BPJS membership. The hospitals produced false medical claims as if the participants had undergone medical treatment and sent them to BPJS for reimbursements, Pahala said.

According to him, such fraud may also occur in many other hospitals.

“We will launch a mass audit on this practice. Phantom billing and diagnosis manipulation will face criminal charges," Pahala said.