The management in hospitals can defraud its sponsors, for example, the government or insurance agencies, by submitting claims for unrealized costs. A psychiatric hospital can bribe doctors to give it patient referrals, including referrals for patients who are not in fact ill. Then the insurance companies must pay for unnecessary treatment.
In 1997, 3 American hospital executives were indicted for submitting fraudulent expense reports on behalf of their hospital to the goverment for reimbursement. A previous governmental report claimed that more than $50 million worth of fraudulent claims were received per year.
In 1995, the British national health service uncovered 960 fraudulent claims worth £6 million over the previous 3 years. Two agencies had submitted bills to the NHS for services that had not in fact been performed or hours not worked and phantom doctors.