The National Healthcare Security Administration (NHSA) issued the "Reply to Recommendation No. 3298 of National People's Congress" on March 4, 2023, and specified improvement in the payment system of Diagnosis Related Groups (DRGs): innovative medical devices enjoy premium pricing and can be exempted from DRG in China.
About Diagnosis Related Groups (DRGs)
In the Reply, under the support from NHSA, local provincial HSAs has started to pilot the CHS-DRG exclusion payment. For example, In Beijing, if drugs, medical devices and diagnostics meet certain conditions, they can be excluded from the payment of CHS-DRG system.
NHSA also pointed out that in the process of centralized procurement, medical institutions determine the demand according to historical usage, clinical use, and medical technology progress, and "release more market space to the innovative products".
In July 2022, the Beijing Municipal HSA first issued a notice proposing that innovative drugs, medical devices, and medical service items can be paid separately excluded from DRG payment.
In the DRG/Diagnosis-Intervention Packet (DIP) payment system, drugs and consumables will be charged together, which will be incorporated into the operating costs of hospitals, forcing hospitals to reduce costs and control consumables usage. If innovative drugs and devices with better clinical efficacy are subject to DRG, doctors might be less likely to use them because of cost increase. The new Reply from NHSA has addressed the question successfully.
From 2014 to 2022, China NMPA approved a total of 189 innovative medical devices. In 2022 alone, it approved the 55 innovative devices, an increase of 57.1% compared with 2021.
I would love to hear about your experiences and challenges of your medical device in the DRG-based reimbursement in China. Please email me if you have any questions about the notice.
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Grace Fu Palma
ChinaMed Device, LLC
MA, U.S.
gpalma@ChinaMedDevice.com978-390-4453
www.ChinaMedDevice.com------------------------------