Comprehensive Overhaul of Payment Systems
The National Healthcare Security Administration (NHSA) has unveiled a series of measures aimed at enhancing the management of Diagnosis Related Groups (DRG) and Diagnosis-Intervention Packet (DIP) payment methods within China’s multi-tiered healthcare security framework, known as the “1+3+N” system. These reforms emphasize seamless integration with other critical areas such as medical service pricing, volume-based procurement (VBP), National Reimbursement Drug List (NRDL) negotiations, and commercial health insurance. The ultimate goal is to optimize payment processes while ensuring real-time, direct, and synchronized settlements.
Unified Management and Digital Integration
Under the new regulations, DRG/DIP payment methods will fall under agreement management, requiring designated medical institutions and handling agencies to formalize their roles and responsibilities through medical security service agreements. The NHSA is also pushing for the nationwide adoption of a unified medical insurance information platform. This digital transformation includes standardizing national coding systems, enhancing data quality control, and safeguarding sensitive health information. These measures aim to create a fully integrated online management system capable of handling the entire payment lifecycle.
Local Adaptation and Budgetary Precision
Recognizing regional variations in healthcare needs, the regulations allow provinces to tailor their own DRG subgroupings and DIP disease catalogs based on national guidelines. Local authorities are also tasked with drafting annual expenditure budgets using a “fixed income-expenditure balance” approach, allowing for minor surpluses. To address potential overruns, Some regions can reserve part of the budget for reasonable compensation for mid year adjustment and year-end liquidation. The NHSA further encourages provinces to integrate inter-provincial hospitalization funds into local budget management and establish advance payment systems with quality assurance deposits.
Special Case Management
To ensure equitable treatment for complex cases, medical institutions can apply for special case status for patients requiring prolonged stays, high-cost treatments, or multidisciplinary care. These cases may opt for project-based payments or adjusted payment standards. Online or offline declarations will occur quarterly or monthly, with caps on the number of special cases (5% for DRG and 5% for DIP). This provision ensures that exceptional medical needs are met without compromising system efficiency.
Inter-Provincial Coordination and Digital Innovation
The NHSA has also called for improved information systems to support cross-provincial healthcare management. Provinces are encouraged to adopt national DRG/DIP functional modules, expand quality control scopes, and integrate inter-provincial hospitalization expenses into local management frameworks. The push for intelligent audit applications will enable full-process oversight, enhancing transparency and reducing fraud risks.
Conclusion
The NHSA’s DRG/DIP payment reforms represent a significant step toward modernizing China’s healthcare system. By fostering regional adaptability, leveraging digital tools, and ensuring equitable treatment for all patients, these measures aim to create a more efficient, transparent, and inclusive healthcare ecosystem. As the implementation progresses, provinces will need to balance innovation with practical considerations to ensure sustainable outcomes.-Fineline Info & Tech
