The Hunan Healthcare Security Administration (HSA) bureau has released a notice stating that effective from October 1, 2023, payments for drugs or medical consumables that win volume-based procurement (VBP) tenders will be settled directly by the Basic Medical Insurance (BMI) funds. This change implies that hospitals will no longer handle payments to drug or device companies for VBP products.
Streamlining the Procurement and Payment Process
Pharmaceutical companies will provide information on product purchases and distribution, while medical institutions will verify storage space, conditions, purchase price, and the amount payable based on actual procurement lists. The BMI agency is responsible for generating a settlement and reconciliation report for the previous month using the BMI procurement system. The agency will then settle directly with the companies, deducting the amount from the medical insurance settlement fees that would otherwise be paid to the medical institution.
Addressing the “Debts Chains” in China’s Public Hospitals
China’s public hospitals have historically struggled with “debt chains” due to delays in the payments process involving hospitals, manufacturers, and BMI agencies. As the primary party in any procurement transaction, public hospitals have often demanded early payments from third parties while delaying payments to suppliers. Hunan is joining other local governments, such as Shandong and Shanxi provinces, in testing the removal of hospitals from the procurement payment process to improve efficiency and cash flow within the healthcare system.-Fineline Info & Tech
