On February 20, the Ministry of Finance, Ministry of Human Resources and Social Security and National Health and Family Planning Commission (hereinafter referred as ‘three departments’) jointly issued a notice to enforce the management of basic medical insurance fund budget for revenues and expenditures and control the unreasonable increase in medical costs. Therefore, it will help reduce the personal burdens and ensure the sustainable operation of basic medical insurance system and funds.

There are some problems such as unreasonable increase in medical costs and increased fund operating pressure as well as an unsustainable risk in the medium and long term in the basic medical insurance system of China. Three departments asked for an intensified management of basic medical insurance fund budget for revenues and expenditures. Additionally, three departments asked for the implementation of the basic medical insurance payment reform. The reform in pooling areas should be combined with the practical situation. We must carry out the reform thoroughly and promote a combined payment way of being based on a global budget, collecting outpatient charges per head, being admitted by diseases, being classified to diagnosis-related groups (DRGs) by different diseases and paying by days in bed, which should be applicable to different groups, diseases and medical services. The payment by items will be progressively reduced and the payment reform will cover all medical institutions and medical services. Establish a sound incentive and restrictive mechanism of budget surplus retained and over-expenditure reasonably shared to stimulate medical institutions to improve their service efficiency and quality. Three departments also asked that all regions should enforce the performance assessment of basic medical insurance agencies which incorporates budgeting, expense control and service quality and help transfer their working focus from reimbursement review to expense control, intensified budget management for revenues and expenditures and service improvement.