China Releases Landmark Internet Healthcare Policy Clarifying Five Key Pricing and Reimbursement Issues

VCBeat (WeChat ID: vcbeat) has learned that on August 30, the National Healthcare Security Administration released the “Guiding Opinions on Improving Pricing and Medical Insurance Reimbursement Policies for ‘Internet+’ Medical Services.” The Guiding Opinions provide clear clarification on issues of widespread concern within the internet healthcare industry, such as who determines service prices, which items are eligible for pricing, which are not, and how prices should be set. VCBeat has summarized these key points as follows:

Medical service price items are managed under a three-tier system at the national, provincial, and municipal levels, with provinces playing the primary role.The National Healthcare Security Administration is responsible for standardizing the principles of project establishment, project names, service connotations, pricing units, pricing instructions, coding rules, and other aspects, and for guiding provincial-level healthcare security departments in their work on medical service price items. Provincial-level healthcare security departments are responsible for establishing medical service price items applicable to their respective regions, based on advancements in medical technology and local conditions. Where medical institutions apply to establish charges for existing offline services that are being delivered online, such applications shall be accepted by prefecture-level municipal healthcare security departments; those meeting the access criteria shall be submitted to the provincial-level healthcare security department for centralized review and decision-making.

The establishment of pricing items for “Internet+” medical services shall simultaneously meet the following basic conditions:

First, the services must be permitted by the health industry regulatory authorities to be delivered via “Internet+” models, with clearly defined clinical pathways and well-established technical standards.

Second, direct services should be provided to patients;

3. The service process should be completed remotely via the Internet and other media;

Fourth, the service must be capable of delivering the same functions as its offline counterpart; fifth, the service must have a substantive effect on the diagnosis and treatment of diseases. It is prohibited to add items by changing wording, splitting the connotation of services, adding non-medical steps, or under other pretenses.

Services that occur solely between medical institutions or between medical institutions and other entities, not directly facing patients; services provided by medical institutions to patients that do not constitute diagnostic and treatment activities; and services provided by non-medical personnel shall not be included as items in medical service pricing. These include, but are not limited to, remote surgical guidance, remote ward rounds, medical consultation, education and training, research follow-ups, data processing, medical appraisal, health consultation, health management, and convenience services.

Provincial-level healthcare security authorities shall formulate and adjust the prices of "Internet+" medical services.Reasonable price comparison should be maintained for similar services offered online and offline.：

First, online and offline service prices should align with service utility, maintaining reasonable price ratios and levels to reflect a balanced approach of incentivizing service provision while preventing abuse.

Second, the pricing of online and offline services should align with the degree of economic improvement, ensuring that online services are more effective than traditional medical care in reducing patients’ overall costs.

Third, the price differential between online and offline services should align with necessary costs, reflecting the shared costs of medical services and the additional costs associated with “Internet+” models.

“Internet+” medical services provided by designated medical institutions that are identical in content to offline medical services covered by medical insurance payments and that adhere to the corresponding fee schedules of public medical institutions shall be included in the scope of medical insurance coverage and reimbursed accordingly, upon completion of the requisite filing procedures.

“Internet Plus” services that constitute entirely new content and provide basic medical services subject to government-regulated pricing shall be evaluated by provincial-level healthcare security administrations. In accordance with relevant regulations, these administrations shall determine whether to include such services in the scope of medical insurance coverage, taking into comprehensive consideration factors such as clinical value, price levels, and the payment capacity of medical insurance funds.

To the Healthcare Security Administrations of all provinces, autonomous regions, municipalities directly under the Central Government, and the Xinjiang Production and Construction Corps:

To implement the spirit of the General Office of the State Council’s “Opinions on Promoting the Development of ‘Internet + Medical Health’” (Guo Ban Fa [2018] No. 26) and the “Notice on Issuing the Key Tasks for Deepening the Reform of the Medical and Healthcare System in 2019” (Guo Ban Fa [2019] No. 28), and to improve the pricing and payment policies for “Internet +” medical services, the following opinions are hereby proposed.

I. General Requirements

(I) Guiding Principles

(II) Basic Principles

First, deepen the “delegation, regulation, and service” reforms. Adhere to a combined approach of market-driven formation, government adjustment, and social co-governance, establish an open, flexible, and multi-stakeholder price formation mechanism, and place equal emphasis on stimulating vitality in the healthcare market and guiding the provision of appropriate services.

Second, implement classified management. In accordance with the operational and developmental patterns of “Internet+,” formulate actionable pricing and payment policies tailored to different service providers, target populations, and service contents.

Third, we encourage innovation. More flexible development space should be provided for new technologies and models that rely on “Internet+” to significantly improve cost efficiency and better meet multi-tiered healthcare needs.

Fourth, coordinated development. Equitable pricing and reimbursement policies shall be implemented for both online and offline medical services to promote their coordinated development.

(III) Main Approach

“Internet Plus” medical services refer to the online delivery and extension of existing offline medical services by medical institutions at all levels and of all types, under the premise of compliance with laws and regulations. The pricing of “Internet Plus” medical services is incorporated into the current policy framework for medical service prices and subject to unified management. For eligible “Internet Plus” medical services, health insurance payment policies are implemented in accordance with the principle of fairness between online and offline services, while agreement management, settlement processes, and relevant indicators are improved based on the characteristics of these services. We will actively adapt to the development of new business models such as “Internet Plus,” enhance the informatization and intelligence of monitoring and regulation of medical service prices, guide the restructuring of competitive relationships in the healthcare market, and explore a new, open, and diversified mechanism for medical service pricing under the conditions of emerging technologies.

II. Improve the Management of Pricing Items for “Internet+” Medical Services

(I) Project policies are managed by category based on the operational nature of medical institutions

For “Internet+” medical services provided by non-profit medical institutions in accordance with laws and regulations, the healthcare security authorities primarily implement project-based management; unapproved medical service price items shall not be charged to patients. For-profit medical institutions providing “Internet+” medical services in accordance with laws and regulations may independently establish medical service price items. Internet hospitals shall apply the corresponding price item policies based on their registered ownership structure and operational nature.

(II) Project access is subject to tiered management with provincial authorities as the primary level.

Medical service price items are managed under a three-tier system involving the national, provincial, and municipal levels, with primary responsibility at the provincial level. The National Healthcare Security Administration is responsible for standardizing principles for project establishment, item names, service connotations, pricing units, pricing instructions, coding rules, and other aspects, and for guiding provincial-level healthcare security departments in their work on medical service price items. Provincial-level healthcare security departments are responsible for establishing medical service price items applicable to their respective regions, based on advancements in medical technology and local conditions. Where medical institutions apply to establish chargeable items for existing offline services that are now being delivered online, such applications shall be accepted by municipal-level healthcare security departments; those meeting the access criteria shall be submitted to the provincial-level healthcare security department for centralized review and decision-making.

(III) Clarify the basic conditions that project access should meet

To establish pricing items for “Internet+” medical services, the following basic conditions must be met simultaneously: First, the services must be permitted by the competent health authorities to be delivered via “Internet+” methods, with clear clinical pathways and well-defined technical specifications. Second, they must provide direct services to patients. Third, the service delivery process must be conducted remotely through the Internet or other media. Fourth, the services must be capable of achieving the same functions as their offline counterparts. Fifth, the services must have a substantial effect on the diagnosis and treatment of diseases. It is prohibited to create new items by altering terminology, fragmenting the scope of services, adding non-medical steps, or under any other pretexts.

(IV) Clarification of Circumstances Excluded from Medical Service Pricing Items

Services that occur exclusively between medical institutions or between medical institutions and other entities, and are not directly provided to patients; services provided by medical institutions to patients that do not constitute diagnosis and treatment activities; and services provided by non-medical personnel shall not be included as items in medical service pricing. These include, but are not limited to, remote surgical guidance, remote ward rounds, medical consultation, education and training, research follow-ups, data processing, medical appraisal, health consultation, health management, and convenience services.

III. Improve the Price Formation Mechanism for “Internet+” Medical Services

(I) Price policies shall be implemented under classified management for public and non-public institutions.

Public medical institutions providing “Internet+” medical services are primarily subject to government regulation. The healthcare security authorities provide guidance on the upper limits of service fees, and public medical institutions shall charge fees no higher than the prices published by these authorities. For “Internet+” medical services that mainly cater to personalized and high-level needs, as well as those provided to overseas countries and regions, the requirements for controlling the scale of special-needs medical services and the policy of market-regulated pricing shall be implemented. Where prices are subject to market regulation, public medical institutions shall independently determine fee standards and fluctuation ranges, taking into account factors such as service costs and patient demand, and notify the local healthcare security authorities in writing.

Non-public medical institutions providing “Internet+” medical services shall have their prices determined by market forces.

(2) The fee structure should reflect the characteristics of cross-regional services.

Public medical institutions providing "Internet Plus" medical services shall include the full cost of a service item in the price, which is to be set by the public medical institutions or their provincial-level healthcare security administrations based on the principle of localized management. Healthcare security administrations and medical institutions are prohibited from establishing unfair pricing standards based on differences in service recipients or service areas.

Patients receiving “Internet+” medical services shall pay fees based on the priced items provided by the invited party. Where “Internet+” medical services involve multiple parties, such as the inviting party, the invited party, and the technical support provider, or involve different departments within the same entity, the allocation arrangements shall be determined through mutual consultation among the relevant parties.

(3) The medical insurance authorities shall implement provincial-level management for the formulation and adjustment of prices.

Provincial-level healthcare security authorities are responsible for formulating and adjusting the prices of “Internet+” medical services provided by public medical institutions. For newly launched “Internet+” medical services, prices may be set by provincial-level healthcare security authorities or determined through agreements with medical institutions as trial prices. When applying for project approval, medical institutions shall simultaneously submit materials such as price recommendations, cost estimation results, economic evaluation reports, and comparative analyses with comparable offline services, in accordance with the regulations of provincial-level healthcare security authorities. Upon expiration of the trial period (generally not exceeding two years), pricing policies shall be further clarified based on evaluations of service effectiveness, costs, and revenue.

(4) Price adjustments should maintain a reasonable price parity between online and offline channels.

Provincial-level healthcare security authorities shall formulate and adjust the pricing of “Internet+” medical services while maintaining a reasonable price parity between online and offline services of the same type. First, the prices for online and offline services should align with their service utility, maintaining a reasonable price ratio and level that reflects both the incentive to provide services and the prevention of misuse. Second, the prices for online and offline services should correspond to the degree of economic improvement, ensuring that online services are more conducive to reducing patients’ overall costs compared to traditional healthcare-seeking methods. Third, the prices for online and offline services should reflect differences in necessary costs, accounting for the common costs of medical services and the additional costs associated with “Internet+” services.

(V) Refine pricing policies in accordance with the characteristics of various services

First, where public medical institutions provide examination and testing services and entrust third parties to issue conclusions, the fees shall be charged in accordance with the prices of the offline examination and testing service items of the entrusting party; separate billing items shall not be established for remote diagnosis, and duplicate charges are prohibited. Second, where public medical institutions conduct internet-based follow-up consultations, with services provided by medical personnel at different levels, the fees shall be charged according to the price standards for general outpatient consultation services. Third, where public medical institutions provide family doctor services relying on “Internet+” technologies, services shall be delivered and fees settled in accordance with the content and standards specified in the service package contracts; no additional or extra charges shall be imposed solely due to changes in the mode of service delivery.

(6) Fully safeguard patients' legitimate and reasonable rights to fair pricing

All entities providing “Internet+” medical services shall base their fee structures on the principles of informed consent and legal compliance, adhering to the principles of fairness, legality, and good faith. Prices should be reasonably set and adjusted within the scope permitted by policy and disclosed in a clear and transparent manner. Healthcare security departments across all regions shall strengthen the supervision of medical insurance funds. For medical institutions engaging in dishonest practices such as forced services, unbundling of services, provision of services at unfair prices, or false price reporting, regulatory measures including admonitory interviews and orders for rectification shall be imposed. Cases suspected of violating laws or regulations shall be promptly referred to inspection and law enforcement authorities.

IV. Clarify the Medical Insurance Payment Policies for “Internet+” Healthcare Services

(1) Determining the Scope of Medical Insurance Reimbursement

“Internet+” medical services provided by designated medical institutions that are identical in content to offline medical services covered by health insurance payment and that adhere to the corresponding charging standards of public medical institutions shall be included in the scope of health insurance payment and reimbursed accordingly, upon completion of the requisite filing procedures. For basic medical services delivered via “Internet+” platforms that constitute entirely new service offerings and are subject to government-regulated pricing, provincial-level healthcare security administrations shall determine their inclusion in the health insurance payment scope in accordance with relevant regulations, taking into comprehensive consideration factors such as clinical value, price levels, and the affordability capacity of the health insurance fund.

(II) Improving the Management of Medical Insurance Agreements

Healthcare security departments at all levels shall, in light of the characteristics of “Internet+” medical services, reasonably determine global budget control targets, improve service agreements with designated medical institutions, adjust healthcare security information systems, and optimize settlement processes. Meanwhile, they shall strengthen supervision of medical services to support designated medical institutions in delivering standardized, convenient, high-quality, and efficient medical services through “Internet+” platforms. Any designated medical institution engaging in price-related dishonesty or fraudulent claims against healthcare security funds shall be deemed in breach of its agreement and handled in accordance with relevant regulations.

V. Strengthening Organization and Implementation

(1) Ensure effective implementation and facilitate conflict resolution

Healthcare security departments of all provinces (autonomous regions, and municipalities directly under the Central Government) shall, in accordance with the requirements of these Opinions, promptly review and adjust pricing and medical insurance reimbursement policies for “Internet+” medical services, standardize price items, resolve accumulated pricing discrepancies, and ensure effective coordination between pricing and reimbursement policies. Where matters fall within the responsibilities of health, market regulation, or other relevant departments, adequate input shall be solicited, communication and collaboration shall be strengthened, and leads on issues shall be transferred in a timely manner.

(II) Strengthen Price Monitoring and Tracking Evaluation

Healthcare security departments of all provinces (autonomous regions and municipalities) shall prioritize public medical institutions, strengthen daily monitoring and supervision of medical service prices, and promptly report any new developments or issues arising in their work. In cases where offline service items undergo changes in service delivery models resulting in significant cost fluctuations, timely investigations shall be conducted, and prices shall be dynamically adjusted or public medical institutions shall be guided to make timely price adjustments.

(III) Conduct effective policy interpretation and public opinion guidance

In light of the new patterns and characteristics of “Internet+” medical services, timely and accurate interpretation of pricing and payment policies should be provided to reasonably guide public expectations, actively respond to societal concerns, and strive for understanding and support from all sectors of society. Efforts should be made to build consensus among all stakeholders, encourage active participation by healthcare professionals, create a favorable environment for reform, and ensure its smooth implementation.

Source: National Healthcare Security Administration