Policy & RegulationAnalysis
China Updates Inpatient Payment Schemes to Cover 95% of Hospital Cases
The medical insurance bureau released version 3.0 DRG and DIP standards, consolidating categories while expanding coverage.
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The Brief
China's National Healthcare Security Administration has released version 3.0 grouping plans for Diagnosis-Related Groups and Big Data Diagnosis-Intervention Packet payment schemes. The revised DIP framework consolidates its national core disease groups from 9,520 to 5,125 while increasing patient case coverage from 92 percent to 95 percent. The reform builds on nationwide implementation figures showing case-based payments accounted for 91.8 percent of all insured inpatient discharges last year, marking a transition toward standardized hospital cost controls and clinical resource alignment.
Why it matters
The shift to version 3.0 grouping schemes directly impacts public hospital revenue structures, clinical diagnosis practices, and patient co-pays. Moving from broad coverage to standardized groupings aims to refine inpatient fee settlements across tertiary and secondary public hospitals without distorting clinical incentives.
China context
China is transitioning away from fee-for-service reimbursement toward bundled prospective payment models centered on DRG and DIP systems. Over 90 percent of inpatient discharges now fall under case-based payment schemes, putting pressure on regulators to balance healthcare cost containment with compensation for complex medical interventions.
Editor's View
EDITOR'S VIEW — Analysis and inference, not factual reporting.
The reduction in DIP disease categories alongside an increase in total coverage reflects a deliberate shift toward administrative efficiency and clinical commonality. By merging subcategories with comparable resource use while isolating high-cost procedures into advance groupings, regulators seek to prevent hospitals from gaming minute classification differences while safeguarding funding for intensive clinical care.
What to watch
- Implementation by local hospitals of updated electronic medical record coding aligned with 3.0 disease group standards.
- Regional enforcement of regulatory rules preventing hospitals from directly linking bundled payment quotas to doctor compensation.
- Reimbursement adjustments and access levels for emerging innovative medical technologies under the merged categories.
Key Takeaways
- 1NHSA issued version 3.0 grouping schemes for nationwide DRG and DIP inpatient payment systems.
- 2Case-based payments covered 91.8 percent of all insured hospital discharges in China last year.
- 3DIP 3.0 reduced core disease categories from 9,520 to 5,125 while increasing patient coverage from 92 percent to 95 percent.
- 4Consolidations merged four-digit codes into broader categories, while high-cost treatments like organ transplants were placed in advance groupings.
China's National Healthcare Security Administration has officially released version 3.0 grouping schemes for Diagnosis-Related Groups (DRG) and Big Data Diagnosis-Intervention Packet (DIP) reimbursement systems, refining how public hospitals are paid for inpatient care.
The update comes as case-based prospective payments reached 91.8 percent of all insured inpatient discharges across China last year, according to figures cited by state media outlet China News Service.
Under the new DIP 3.0 framework, the number of core disease categories in the national catalog was reduced from 9,520 in version 2.0 to 5,125, according to statements made at an administration briefing reported by the Daily Economic News. Despite the nearly 50 percent cut in group categories, the scheme's overall case coverage expanded from 92 percent to 95 percent of inpatient records.
Ying Yazhen, leader of the DIP technical guidance group and executive dean of the National Healthcare Security Research Institute at Capital Medical University, explained that the reduction followed empirical evaluations of clinical data and local reform pilots. Groups were consolidated when medical conditions exhibited similar clinical pathways and comparable resource consumption.
The reform consolidated diagnostic classifications from four-digit subcategories into three-digit categories, merged combined surgical operations, and grouped comparable therapeutic pathways into unified payment tiers, creating 1,725 merged groups that replaced more than 6,000 previous classifications. At the same time, high-resource procedures, including organ transplants, respiratory and circulatory life support, and low-birth-weight neonatal care, were placed into preliminary advance groupings to stabilize payment variations for critical conditions.
Regulators stressed that the streamlined taxonomy does not sacrifice clinical nuance, retaining targeted auxiliary diagnoses to account for disease severity while discouraging redundant classification across hospital networks.