One of the most common practices in medical tourism is also one of the most dangerous: letting facilitators or intermediaries collect patient payments. On the surface, it seems harmless — even convenient. A patient pays a facilitator, the facilitator forwards the money to the hospital, and everyone moves forward with treatment. But beneath that simplicity lies a complex legal and financial minefield that can devastate doctors, hospitals, and facilitators alike.
The vast majority of people in this industry have no idea how much risk they are taking on by allowing patient funds to flow through unregulated channels. Many believe that because “it’s always been done this way,” it must be legal and safe. It isn’t. Across the world, this single decision — allowing a third party to collect and move patient money — can trigger severe consequences, even if everyone involved is acting in good faith.
This article breaks down the real risks, the most common scenarios, and how even well-intentioned businesses can lose everything without realizing it.
Why Payment Handling Is a Regulated Activity Everywhere
Before diving into the risks, it’s crucial to understand why this issue is so serious. Around the world, receiving money from one party and sending it to another is considered a regulated financial service. It falls under laws governing money transmission, payment services, anti–money laundering (AML), and consumer protection.
That means if a facilitator:
- Accepts a payment from a patient
- Holds or controls that payment
- Sends the money to a hospital or clinic
…they are almost certainly performing a regulated financial activity. And if they are not properly licensed, registered, and compliant, they are likely breaking the law.
The same applies if a hospital knowingly accepts funds that came through such an unregulated channel — even if the hospital never handled the money itself.
Scenario 1: The Facilitator Goes Out of Business
This is one of the most common and damaging scenarios — and it happens more often than people think.
A patient pays $12,000 to a facilitator for surgery abroad. The facilitator is a small company and uses the funds to cover its operating expenses while waiting to invoice the hospital. Business slows, cash flow tightens, and the company folds before the hospital ever receives the payment.
The patient is furious and sues everyone involved. The facilitator is bankrupt, but the hospital — even though it never touched the money — is named in the lawsuit. The story spreads online, damaging the hospital’s reputation. Regulators investigate and question why the hospital was willing to work with an unlicensed intermediary.
Result: the patient loses their money, the facilitator is ruined, and the hospital suffers reputational damage that could take years to recover from.
Scenario 2: The Funds Are Frozen by the Bank
Facilitators often assume their bank will process payments without issue. But banks are legally required to monitor accounts for suspicious activity, including unlicensed money transmission. If a facilitator regularly receives large deposits from patients and sends them abroad, the bank may freeze the account pending an investigation.
This can happen overnight — and when it does, all funds in the account are locked. Payments from patients are inaccessible. Funds meant for hospitals can’t be sent. Surgeries are delayed. Patients cancel treatment and demand refunds.
Even if no wrongdoing occurred, resolving a frozen account can take weeks or months. In the meantime, the facilitator’s business may collapse, and the hospital’s reputation suffers as patients post complaints about “lost money” and “cancelled surgeries.”
Scenario 3: Funds Are Misused or Misdirected
In many cases, facilitators are small operations with limited financial controls. Money intended for one hospital might be used to pay another. Funds meant for surgery might cover marketing expenses. Payments could be delayed or sent to the wrong account.
Even if the facilitator intends to pay, errors like these create major legal and reputational consequences. Patients can sue for breach of fiduciary duty or fraud. Hospitals can sue for breach of contract. Regulators can investigate. And once a business is associated with financial mismanagement, trust evaporates.
Scenario 4: The Facilitator Faces Criminal Charges
In most jurisdictions, operating a payment service without a license is a criminal offense. It doesn’t matter if the facilitator didn’t know the law. It doesn’t matter if they’ve done it for years. If they accept and transmit patient funds without authorization, they may be committing a crime.
Regulators in countries like the United States, Canada, the United Kingdom, Saudi Arabia, and Germany have prosecuted unlicensed payment operators in other industries — and medical tourism is on their radar. Penalties often include heavy fines, seizure of funds, and prison sentences.
Hospitals that knowingly accept funds collected this way can also face legal exposure. Even if they aren’t charged, they may be investigated for aiding and abetting unlawful activity.
Scenario 5: The Patient Loses Their Money — and Blames Everyone
Patients rarely understand the legal nuances of how payments flow. If they lose money, they hold everyone involved responsible — the facilitator, the hospital, even the doctor.
If a facilitator disappears with funds, a patient may sue the hospital for negligence or breach of duty. Even if the hospital never received a cent, courts may still allow the claim to proceed, especially if the hospital knew or should have known how payments were being handled.
The reputational damage can be catastrophic. A few bad reviews or viral posts about “scams” or “lost payments” can deter hundreds of future patients.
Scenario 6: Regulators Step In — and Shut Everything Down
Perhaps the most devastating scenario is when regulators become involved. Once authorities suspect unlicensed payment activity, they can:
- Freeze accounts and seize funds.
- Subpoena records and launch investigations.
- Impose fines and criminal charges.
- Shut down operations entirely.
Even if a facilitator ultimately avoids prosecution, the legal costs and reputational harm can destroy the business. Hospitals associated with the facilitator can also face investigations and scrutiny, jeopardizing partnerships and contracts.
Scenario 7: Hospitals Lose Partnerships and Insurance Relationships
Insurance companies, employers, and institutional partners are increasingly sensitive to financial compliance. If they learn that a hospital is accepting payments from unlicensed facilitators, they may terminate contracts or refuse to refer patients.
This isn’t hypothetical — it’s already happening in other industries. In sectors like immigration and education, companies have lost key partnerships after being linked to unregulated financial practices. The same will happen in healthcare as awareness of payment laws grows.
Scenario 8: Facilitators and Hospitals Are Sued by Each Other
When payments go wrong, business relationships collapse. Hospitals sue facilitators for failing to transfer funds. Facilitators sue hospitals for reputational damage. Patients sue both.
Even if lawsuits are eventually dismissed, the legal costs and damage to relationships can be immense. And while large institutions may weather the storm, small facilitators and clinics often cannot.
The Reputational Fallout: Harder to Recover Than the Money
Money can sometimes be recovered. Trust rarely can.
One widely shared story of a patient losing money or a hospital refusing treatment due to a payment dispute can go viral and cause lasting damage. Competitors will use it to question your professionalism. Patients will hesitate to book. Partners will reconsider collaborations.
Even if no laws were broken, the perception of financial mismanagement is often enough to destroy credibility.
How Hospitals and Doctors Get Pulled Into Risk Without Realizing It
Many providers believe they are insulated because they never touch the patient’s money. That is a dangerous assumption.
If a hospital knows that a facilitator is collecting and transferring funds without a license — or should reasonably know — regulators may argue that the hospital is complicit. Even if no charges are filed, being part of an investigation can harm reputation and disrupt business.
Hospitals also risk being drawn into civil litigation. Patients and partners may claim the hospital was negligent in working with an unlicensed intermediary. Even if the hospital wins, the legal costs and reputational harm can be significant.
Why Ignorance Is Not a Defense
Across virtually every jurisdiction, “I didn’t know” is not a valid defense. Regulators apply the principle of “willful blindness” — if you should have known that an activity was regulated, they will treat you as if you did.
That means facilitators and hospitals cannot simply claim ignorance of payment laws. If you’re accepting, moving, or benefiting from patient funds, you have a duty to know the legal requirements in every jurisdiction involved.
The Industry Must Evolve — Or Face the Consequences
The current way most of the industry handles payments is unsustainable. Regulators are becoming more aggressive. Banks are increasing scrutiny. Patients are demanding stronger protections. And as more high-profile payment disputes emerge, the tolerance for risk is evaporating.
Medical tourism businesses that continue to rely on outdated, informal payment practices are gambling with their future. Those that adapt — and build compliance, security, and trust into their payment systems — will lead the next era of growth.
How Better by MTA Protects Hospitals, Doctors, and Facilitators
The safest and smartest way to eliminate all of these risks is to stop letting unlicensed intermediaries collect patient money and instead move payments into a secure, regulated system designed for global healthcare. That’s exactly what Better by MTA does.
Built in partnership with Mastercard, Better by MTA is the first payment platform engineered specifically for the medical tourism industry. It solves the compliance, legal, and trust issues at the heart of this problem by ensuring that every transaction is handled securely, transparently, and in full compliance with financial laws.
- Hospitals receive funds directly and safely, without exposure to the risks of unlicensed facilitators.
- Facilitators can focus on patient coordination without stepping into regulated financial territory.
- Patients gain peace of mind knowing their money is protected from the moment it’s sent until care is delivered.
Better by MTA protects you from frozen accounts, lawsuits, reputational damage, and regulatory action. It builds patient trust, strengthens your partnerships, and positions your business as a credible global leader. Most importantly, it removes the single biggest point of vulnerability in the entire medical tourism ecosystem.
If your business still relies on facilitators to collect patient payments, it’s not a matter of ifproblems will arise — it’s when. Visit https://better.medicaltourism.com today to learn how Better by MTA can protect your revenue, your reputation, and your future.
