“Exemption” of Related Devices Becomes a Hot Topic as Healthcare Security Administrations Issue Documents and Many Hospitals Accelerate DRG Implementation

  • 2023-05-10

The DRG/DIP payment for innovative devices may be possible with the accelerated DRG/DIP reform.

All designated secondary and above medical institutions

to be included in the actual scope of the DRG payment

The Beijing Municipal Medical Insurance Bureau has recently issued the Notice on Issuing the Key Work of Healthcare Security in Beijing in 2023 (hereinafter referred to as the “Notice”).

According to the Notice, it’s important to continuously deepen the reform of diversified and composite medical insurance payment methods. The Notice requires that the implementation of DRG payment should be accelerated and expanded for hospitalized patients, and all designated secondary and above medical institutions that meet related conditions should be included in the actual scope of payment. The mechanism for excluding new drugs, new technologies and special cases should be improved, and the joint management of DRG payment and volume-based procurement should be deepened. The trial implementation of capitation payment of outpatient charges for chronic diseases such as diabetes and hypertension in some compact medical consortia should be studied.

The new model for total budget management of medical insurance costs should be continuously optimized. The cost budget settlement mechanism for total budget management (BJ-GBI) should be improved, the quality evaluation of BJ-GBI should be strengthened, and the role of value-based medical insurance payment with quality as the core should be exerted. Effective integration with payment methods such as DRG payment and capitation payment should be realized, and efficient coordination with policies such as centralized procurement and national negotiations of drugs should be accomplished.

Intelligent regulation should be enhanced, intelligent review and monitoring of reforms of payment methods such as DRG should be advanced, and intelligent review and monitoring of long-term care insurance should be explored in due time.

The nationwide reform of the DRG/DIP payment method is in full swing in China at present, and some pilot areas have completed the relevant tasks of the three-year action plan ahead of schedule.

According to a document issued by the Health Security Administration of Guangdong Province last year, the six pilot cities of Guangzhou, Shenzhen, Zhuhai, Shantou, Foshan and Heyuan have completed the national DIP/DRG pilot tasks, and with the earlier pilot cities continuing to consolidate reform achievements, the remaining cities all conducted DIP payment method reform in 2022 and will achieve full coverage two years ahead of schedule.

The Hebei Provincial Healthcare Security Administration has studied and introduced the Three-year Action Plan of Hebei Province for Advancing DRG/DIP Payment Method Reform, according to which, all zones of unified planning in the province would be covered by the end of 2022, and designated medical institutions providing hospitalization services would be fully covered by the end of 2023, which means that the province would complete the national reform tasks one year ahead of schedule.

According to the Implementation Plan for the Three-year Action Plan of Shanghai for DRG/DIP Payment Method Reform (2022-2024), Shanghai would achieve DRG/DIP payment with medical insurance funds accounting for 70% of hospitalization expenditures with medical insurance funds by 2022, which means that Shanghai would complete the task of comprehensive coverage by national medical insurance funds two years ahead of schedule. Shanghai simultaneously explores the DRG/DIP payment method for basic medical insurance for residents, in which it conducted the feasibility study in 2022, conducts pilot work in 2023 and will promote the method on a large scale in 2024.

According to the Notice on Issuing the Three-year Action Plan for DRG/DIP Payment Method Reform issued by the National Healthcare Security Administration earlier, by the end of 2024, all zones of unified planning in China shall implement DRG/DIP payment method reform, and earlier pilot areas shall continue to consolidate the achievements of the reform; by the end of 2025, the DRG/DIP payment method shall be implemented in all eligible medical institutions providing hospitalization services, to basically cover all diseases and medical insurance funds.

A “three-year” window for innovative devices

In the reform of the DRG/DIP payment method, drugs and consumables change from profit items to cost items for hospitals. The development of new drugs and technologies becomes an aspect that requires special attention under the sudden change in the hospital development model.

The Beijing Municipal Medical Insurance Bureau issued the Notice on Issuing Administrative Measures for Exclusion of New Drugs and Technologies in CHS-DRG Payment (for Trial) in July last year, deciding to conduct the trial implementation of the administrative measures for such exclusion.

According to the trial measures, drugs and medical devices applied for such exclusion should meet restrictive conditions, including “new generic drugs/medical devices approved for marketing by the drug regulator within three years (referring to the application year and the previous two calendar years, the same below); drugs that have undergone significant changes owing to additional functions or indications within three years; drugs newly included in the National Reimbursement Drug List (NRDL) within three years; new medical devices that can be separately charged due to price adjustments within three years”, “significantly improved clinical effects compared to traditional drugs/medical devices” and “a cumulative number of 50 or more cases among basic medical insurance participants in the municipality, with no limit on rare disease cases”.

The introduction of the payment exclusion policy, despite the strict conditions for applications, opens a window for innovative products and has become a focus of attention.

In March this year, the National Healthcare Security Administration published the Reply to Proposal No. 3298 of the Fifth Session of the 13th National People’s Congress, in which the mechanisms related to the CHS-DRG payment’s support for new medical technologies explored by local healthcare security administrations in Beijing, Handan, Hebei, etc. were affirmed.

It is understood that Handan, Hebei has specified that disease groups with abnormally high payment or abnormally low payment can pay by items, and those on the list of special treatments, special medications and high-value consumables can be excluded from DRGs, so as to ensure full coverage.

Besides the above regions, Foshan, Xuzhou, Sanming, Hangzhou, Rizhao, etc. have also introduced relevant measures to explore special payment policies and supporting plans. For example, Hangzhou City will additionally compensate pilot hospitals for individual cases where expenses exceed the average expenses of the disease groups due to the implementation of da Vinci robot surgery, TAVI, SMILE (small incision lenticule extraction), TOMO and other items. Foshan and Xuzhou exempt payment for extremely high-cost cases and special service items; Sanming City implements an exclusion list system for certain medical consumables.

According to the China Healthcare Security Diagnosis Related Groups (CHS-DRG) and Payment Technical Specifications formulated and issued by the National Healthcare Security Administration, it is specified that new technology items filed with medical insurance handling institutions can be temporarily paid by items for one year, and then the payment standards for the corresponding disease groups can be revised based on data calculations; for difficult and severe cases, it is specified that the weight value of the difficult and severe DRG groups can be increased, while the weight value of the mild DRG groups can be decreased.

With the continuous improvement of supporting measures for the DRG/DIP payment, will more supportive mechanisms for new drugs, new technologies and innovative devices be introduced?

Source: Saibailan Devices