A health ministry panel decided Friday to strip the Tokyo Women's Medical University Hospital of its designation as an advanced treatment hospital following a coverup involving the death of a patient.
The hospital is the first to be punished in this fashion since the designation system was introduced in 1993, ministry officials said.
Two doctors at the hospital have been arrested on suspicion of negligence and destroying evidence in connection with a heart operation in March 2001 that led to the death of a 12-year-old girl.
Kazuki Sato, 38, was arrested on June 28 on suspicion of negligence in connection with the death of Akika Hirayanagi. He is also suspected of ordering a clinical technician to falsify surgery records relating to the child.
The other doctor embroiled in the scandal, 46-year-old Kazuhiro Seo, was arrested the same day on suspicion of destroying evidence related to Hirayanagi's death.
During Friday's panel meeting, hospital chief Naoaki Hayashi admitted that the coverup was a coordinated effort on the part of hospital staffers, according to the officials.
The hospital had offered to voluntarily renounce its special-hospital designation.
But panel members decided to punish the hospital anyway "for breaching the people's trust in and expectations of the country's medical institutions," one panel member said.
Once the designation is removed, the hospital will be unable to receive certain forms of preferential treatment -- such as extra insurance reimbursements for medical services.
Its other special designation -- as a hospital allowed to conduct heart transplant operations -- may also be affected in the aftermath of this case, according to informed sources.
The Tokyo Women's University Hospital has previously been regarded as one of the country's most prestigious heart-treatment institutions.