By Fineline Cube China’s National Healthcare Security Administration (NHSA) officially released the Version 3.0 Grouping Scheme for Diagnosis-Related Groups (DRG) Payment and the Version 3.0 Grouping Scheme for Diagnosis-Intervention Packet (DIP) Payment, marking the next phase of China’s nationwide shift toward disease-based healthcare reimbursement.
Regulatory Milestone
| Agency | Action | Instrument | Scope | Date | Next Steps |
|---|---|---|---|---|---|
| NHSA (China) | Policy release | Version 3.0 DRG Grouping Scheme & Version 3.0 DIP Grouping Scheme | All regions and medical institutions implementing disease-based payment | 02 Sep 2026 | Transition preparations by 31 Dec 2026; full implementation by end of Mar 2027 |
Version 3.0 Grouping Structure
| Scheme | Core Elements | Count |
|---|---|---|
| DRG | Adjacent Diagnosis-Related Groups (ADRGs) | 492 |
| DRG | Diagnosis-Related Groups (DRGs) | 825 |
| DIP | Core disease database categories | 5,125 |
| DRG (primary-level) | Primary-level groups for grassroots care | 31 |
| DIP (primary-level) | Primary-level diseases for grassroots care | 127 |
The Version 3.0 schemes define the first batch of primary-level disease categories to support the development of primary healthcare services, offering local authorities a reference framework for grassroots reimbursement.
Implementation Timeline & Compliance Requirements
- Transition deadline: Regions and medical institutions implementing disease-based payment must complete transition preparations by 31 Dec 2026
- Full implementation: Version 3.0 grouping takes effect by the end of March 2027
- Refined management: The NHSA requires strengthened overall payment management, standardized calculation and verification of disease payment rates, and an optimized exceptional case review mechanism to improve audit efficiency
- Flexible rate models: Regions with floating rates may explore models such as dividing total disease-based payment into stock (fixed) and increment (floating) portions; fixing rates for severe diseases while floating rates for mild ones; or fixing rates for essential drugs and consumables while applying floating rates to medical service items
- Exceptional case review: For new drugs, consumables, and technologies, and for complex and severe cases — capped at 5% of total DRG discharged cases in DRG regions, with DIP quotas moderately optimized and capped at 1% of total discharged cases from 2027 onward
- Fund settlement: A three-year action plan will accelerate settlement, optimize fund allocation structure, and advance quarterly settlements, with the policy of “retaining surplus for retention, sharing reasonable overruns” enforced
- Assessment safeguards: Medical institutions are explicitly prohibited from using disease payment standards as caps for departmental or staff assessments or linking them to performance-based compensation
- Data governance: A regular data release mechanism will be established through data working groups, with coordinated advancement of disease-based payment for cross-regional healthcare services
Market Impact & Outlook
- Reimbursement recalibration: The Version 3.0 DRG and DIP schemes will reset payment benchmarks across Chinese hospitals, with direct implications for revenue recognition, cost control, and service-line economics
- Primary care tailwind: The introduction of 31 DRG primary-level groups and 127 DIP primary-level diseases signals policy support for grassroots healthcare providers
- Innovation carve-outs: The exceptional case review mechanism for new drugs, consumables, and technologies offers a partial pressure valve for innovative medical products that might otherwise be squeezed by fixed case-based payments
- Hospital management pressure: Stricter rate verification and audit efficiency requirements will push hospitals toward more refined clinical and financial data systems
- Sector signal: The NHSA‘s timeline confirms that disease-based payment is becoming the default operating model for China’s healthcare system, reshaping incentives for providers, payers, and life sciences companies alike
Forward‑Looking Statements – This brief contains forward-looking statements regarding the implementation and industry impact of the Version 3.0 DRG and DIP grouping schemes. Actual outcomes may differ materially due to enforcement, regional adoption, and market factors. This content is for informational purposes only and does not constitute investment advice.-Fineline Info & Tech