BEIJING - Chinese authorities will tighten the supervision of the use of the country's medical insurance funds to ensure the safety and efficiency of the funds, according to the National Healthcare Security Administration.

According to a draft regulation issued by the administration to solicit public opinions, the use of such funds must be put under strict supervision to protect the legitimate rights and interests of relevant parties.

The draft asked relevant authorities to exercise supervision over hospitals, pharmacies, doctors, pharmacists and beneficiaries under the insurance program and stipulated methods and content of the supervision.

Violators will be subjected to punishments ranging from a warning, confiscation of illegal gains and fines to suspension or termination of service qualifications or contracts as well as placing them on a credit blacklist.

Other punishments include suspension of practices and revocation of practice licenses or even criminal penalties.

The administration last month exposed cases of hospitals involved in medical insurance fraud such as paying kickbacks to village doctors to "buy" patients, over-treating and over-checking patients, booking fake expenditures and using fake invoices to defraud medical insurance funds.