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Reimbursement mapping: GERMANY. 2011. Content. Key Economic Indicators Healthcare Overview Reimbursement Systems Market Access Funding Mechanisms HTA Decision makers, Acronyms and Links Austerity Measures 2011. Key Economic Indicators Germany. Healthcare system overview.
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Content • Key Economic Indicators • Healthcare Overview • Reimbursement Systems • Market Access • Funding Mechanisms • HTA • Decision makers, Acronyms and Links • Austerity Measures 2011
Healthcare system overview • The Federal Republic of Germany currently has approximately 82 million Inhabitants and is organised in 16 states (Laender). • Statutory Health Insurance Funds (SHIs) are responsible for the costs of healthcare provision to their insured population. Being insured is legally mandatory and 92% of the population are members of a SHI. • Medical Devices and Diagnostics are used both in the inpatient and the ambulatory sectors with markedly different reimbursement and funding mechanisms in each one. • Traditionally, hospitals are public institutions providing only inpatient care, while ambulatory care is supplied by private practices which are paid by SHIs and private insurances. • Increasingly, hospitals are also providing ambulatory care which is regulated by a Committee for Ambulatory Care in the Hospital.
Market Access The CE mark is required for a new technology before it can be marketed and reimbursed. Specific diagnostic and procedure codes are used for prospective (hospital) or retrospective (ambulant) reimbursements. However, coding does not directly and automatically lead to reimbursement. The main issue that is related to market access in Germany: • both inpatient procedures and ambulatory treatments are capitated and subject to a “global budget” mechanism. The actual amount is determined in a retrospective way because once all physicians in a region have invoiced the association, the limited budget is distributed according to the EBM points. In case a physician has too many points he receives relatively less resources according to the budget available. • physicians can only invoice for 1 procedure per patient quarter and if the patient comes back a second time, there is no additional payment. Introduction of new technologies need to overcome the inherent barriers associated with budgetary capitations.
Funding Mechanisms (1/2) Mechanisms of Hospital Funding: • It is regulated by the “Hospital Financing Act” which establishes a dual funding mechanism for German hospitals. Under the Act, each state is responsible for covering large investment costs and the procurement of assets with a long economic life (more than three years). • The principle mechanism of inpatient activity reimbursement to hospitals by the SHIs (or private insurers) is a highly evolved Prospective Payment System (PPS) called the German DRG or G-DRG. DRG funding: • The G-DRG system is maintained by the “Institute for the Hospital Remuneration System” also known as InEK. InEK is responsible for the collection and processing of hospital costing data, the updating of the funding units associated with each funding code and the updating of the funding codes themselves. • There is an uniform national application of the DRG system for the whole country. However, the uniform base rates to which the individual base rates of the hospitals converge are defined on state level. • In addition, psychiatric, ambulatory care and rehabilitation hospitals are excluded from the DRG system and some areas of inpatient care that are not represented appropriately in the DRG system are financed individually.
Funding Mechanisms (2/2) Process of Accurate Reimbursement of Newly Introduced Technologies • The reimbursement of newly introduced technologies depends on the availability of specific diagnostic and procedure codes, as well as the adequate uptake and correct coding of this new technology by the hospitals that participate in InEK’s calculation system. • InEKis updating G-DRG on an annual basis, using however data from the previous two years. This may contribute to a time lag for successfully funding a new technology or creating new funding codes for it. Correct coding of a new technology will not necessarily lead to sufficient reimbursement immediately because German hospitals who are constantly under pressure to contain expenditure and improve efficiency may have a counter-incentive against potentially useful and cost-effective or cost-efficient technologies because of the certainly negative initial budget impact. • The InEK has created an “on-top” funding process for innovative products, known as NUB (NeueUntersuchungs- und Behandlungsmethoden). Every hospital will need to apply separately (electronic application at InEK) and the “on-top” payment (if the application is approved) will be available only to the hospitals that applied for it and not to every hospital in Germany.
Funding Mechanisms - Ambulatory Sector Broad Payment Mechanism – The Uniform Value Scale • The majority of ambulatory services are provided by private practitioners in the community. These physicians are paid by their regional association who is in turn paid by the SHIs. • Payments by the SHIs to physician associations are usually based on a “per physician member” or a “per insured person” basis, while private insurers predominantly pay on a fee for service basis. • The physician associations are responsible for distributing these payments to their members in accordance with the EBM catalogue. • The EBM system constitutes a mix of services delivered, number of patients served, and fixed budget distribution system. • Physicians are only able to invoice services that appear on the EBM.
HTA • In general, new diagnostic and therapeutic procedures can only be reimbursed by the SHI if they are ‘necessary, appropriate, and economic’. The decision on acceptance of new procedures for coverage by the SHI has to be ratified by the Federal Joint Commission (GemeinsamerBundesausschuss, G-BA). • New technologies aspiring to be used in the ambulatory sector will need to be listed on the EBM, a process which requires physician support and may involve a Health Technology Assessment (HTA) by the Institute for Quality and Efficiency in Healthcare (Institute fürQualität und WirtschaftlichkeitimGesundheitswesen) or IQWiG. The actual payment amount of an EBM-listed procedure is the responsibility of the Valuation Committee which is separate from the Ambulatory Care Committee. • Ambulatory care procedures will need to be approved by the Ambulatory Care Committee and the Federal Joint Committee if they are to become listed on the EBM and offered to German patients through private physicians.
Austerity measures General country measures • Cuts in public service wage and employment (10 000 fewer posts by 2014) and defense spending. Revenue-raising measures include a reduction in tax exemption, a tax on nuclear power plants, an environmental surcharge on airline passengers, higher healthcare costs and a financial transaction tax. HTA and DRG / Reimbursement reforms • New law handles MedTech innovations. • The German Health Ministry submitted comprehensive key points to the newly proposed Healthcare Provision Act in mid-April 2011. The central elements of the planned law concern the improved regional distribution of doctors in Germany, but it also includes provisions that have a direct impact on the medical device industry. For instance, Section 8 „Innovative Treatment Methods“ states that the Joint Federal Committee (JFC) shall be able to „test promising innovative examination and treatment methods for a limited time period under specifically structured conditions for the purpose of immediate fact-finding without imposition of the evaluation procedure“ in the future. If the proposal passes in its current version, the JFC will get a new instrument for assessing medical technologies whose benefit is not yet confirmed by sufficient evidence. On the subject of financing, the Ministry's paper calls for a system surcharge analogous to the financing of the Institute for Quality and Economic Efficiency in Healthcare (IQWiG).
