Next Year’s Medical Fees to Increase by an Average of 1.99%... Negotiations Fail Between KMA, KHA, and KDA

▲National Health Insurance Service

[Asia Economy Reporter Cho Hyun-ui] The National Health Insurance Service (NHIS) announced on the 2nd that it has completed negotiations for the 2021 medical fee schedule contract with seven organizations including the Korea Hospital Association, and that the Financial Management Committee has reviewed and approved the agreement.

Based on the results of the research on conversion factors by type, the NHIS pursued negotiations within the required financial range (band) presented by the Financial Management Committee, taking into account the health insurance financial status, subscribers' ability to pay premiums, and the rate of increase in medical expenses.

As a result of the negotiations, the average increase rate for 2021 was 1.99% (approximately 941.6 billion KRW in required funds). Four types were settled with increases as follows: Korean medicine 2.9%, pharmacies 3.3%, midwifery centers 3.8%, and public health institutions 2.8%. However, negotiations failed for three types: hospitals, clinics, and dental clinics.

The NHIS stated, "In this year's negotiations held under the unprecedented circumstances of the novel coronavirus disease (COVID-19), there was a gap that could not be reconciled between provider groups, who expected a policy consideration in the form of an increase in the conversion factor due to rising labor costs from minimum wage hikes and worsening management conditions, and subscriber groups, who found premium increases burdensome amid the economic crisis."

Kang Cheong-hee, Director of the NHIS Fee Negotiation Team, expressed regret over the failure of negotiations with hospitals, clinics, and dental clinics despite multiple consultation processes to resolve differences between subscribers and providers. He added, "The NHIS engaged in bilateral negotiations aiming to minimize the burden on the public and will accept the outcome as the best possible result."

He further stated, "In the future, we hope to bring together subscribers, providers, academia, the government, and the NHIS to discuss overall matters related to the fee system, including research on conversion factors, and to develop a plan for the advancement of medical fee schedule contracts that can achieve amicable agreements."

Meanwhile, the NHIS plans to report the results of the 2021 medical fee schedule contract, as reviewed and approved by the Financial Management Committee, to the Health Insurance Policy Deliberation Committee (HIPDC) meeting scheduled for the 5th. The HIPDC will decide on the conversion factors for hospitals, clinics, and dental clinics, which failed in this negotiation, within this month according to the National Health Insurance Act, after which the Minister of Health and Welfare will announce the 2021 medical fee schedule details.

This content was produced with the assistance of AI translation services.