India, Feb. 19 -- Several privately run psychiatric hospitals in central China have come under scrutiny after an undercover investigation alleged that healthy individuals were being admitted and used to fraudulently claim money from the country's public medical insurance system.

Citing the undercover report by the Beijing News, the South China Morning Post reported that many patients housed in psychiatric institutions in Xiangyang, Hubei province, showed little or no signs of mental illness and received minimal treatment despite being registered as long-term patients. The report said healthy individuals were drawn in with promises of "free hospitalisation" and minimal living costs.

Notably, in China, patients pay only a portion of their...