The NHS is potentially vulnerable to fraud due to loopholes in the issuing of European Health Insurance cards, the Department of Health has admitted.
An investigation by the Daily Mail found people who had never worked in Britain were able to obtain a free EHIC card in the UK, the paper says.
Health services abroad were then able to claim back the costs of their treatment from the UK authorities.
The government said it would look urgently at tightening the system.
The EHIC is designed to cover the cost of state-provided healthcare for British travellers in certain European countries.
It covers emergency treatment and certain pre-existing medical conditions, and routine maternity care, providing the reason for a patient's visit is not specifically to give birth.
To obtain a card online, an applicant must provide a personal NHS number, which is allocated upon registration at a GP practice.
By Hugh Pym, Health Editor
There are no figures on the scale of fraud with EHIC cards obtained in the UK and used to cover health costs in other European countries.
Whitehall officials believe it could be limited. But critics will say the fact that the Government does not know how much of the money paid to other health systems for EHIC use - £154 million in 2013/14 - might be the result of fraud is itself a problem.
The Department of Health acknowledges that the system need to be tightened up. Questions will be asked about whether more robust evidence of residence and National Insurance contributions is required before NHS numbers and EHIC cards are provided. Cards issued in the UK have a five year lifespan. Some argue this could be shorter, in line with other countries.
Then there's the issue of policing the system with many GPs arguing their job is to care for those who need it rather than act as border control officials.
A Hungarian reporter working undercover for the Daily Mail said she obtained an NHS number and then an EHIC card.
She claims she was then able to access a range of medical treatment in Hungary - including maternity care - with the authorities there able to recoup costs from Britain.
The reporter, Ani Horvath, had a fellow journalist pose as her landlord and offer a forged tenancy agreement as proof of address in order to register at a London GP surgery.
Ms Horvath said she then flew to London and underwent a check-up at the surgery, during which her Hungarian ID card and the lease document were scanned but not questioned.
She was then issued with an NHS number, which her accomplice used to successfully apply online for an EHIC card for her, which was valid for five years.
Whitehall sources said it was not clear how extensive EHIC fraud might be, but the Department of Health acknowledged there were loopholes in the system that could be tightened.
European Health Insurance Card
The European Health Insurance Card entitles you to the same state healthcare as a citizen in that country - this includes prescriptions, GP visits and hospital stays.
Care is not always free and the details vary between states depending on their healthcare system. Some costs can be claimed when a patient returns home, but again this depends on the local setup.
The card can be used in any of the 27 EU countries outside the UK as well as Iceland, Liechtenstein, Norway and Switzerland. It covers emergency care as well long term conditions including kidney dialysis treatment.
People are still advised to have travel insurance, as private healthcare and flights home are not covered.
Source: NHS Choices
Ministers said there would be an urgent investigation into how the system might be improved.
Health Minister Alistair Burt said: "It is completely unacceptable that people living outside the UK think they can abuse our NHS.
"The Department will urgently carry out more work to include EHIC applications."
Whitehall sources added that this work was part of an "ongoing drive" to crack down on so-called health tourism.
There was no evidence of widespread abuse of the EHIC system, they said, but added that it was not known how much was spent as a result of fraudulent claims.
Around five million EHIC cards were issued by the NHS in the last 12 months. It is not clear how many of these were to non-UK nationals.
Consultant surgeon Meirion Thomas told the BBC Radio 4 Today programme it was a well known scam.
"It's already got around, it's there, it's in the real world. Migrants come into this country and ask for EHIC cards."
He said better checks on identification would help block the fraud.
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