Health Insurance Review & Assessment Service

Transcription

1 Health Insurance Review & Assessment Service Seoho3-dong, seocho-gu Seoul , Korea Published in July, 2010

2 Health Insurance Review & Assessment Service

3 MISSION STATEMENT The Health Insurance Review and Assessment Service is dedicated to ensuring the quality and cost effectiveness of national healthcare

4 CONTENTS 04 Healthcare System in Korea 06 Background 08 Introduction Review Activities 10 Review Service 12 Comprehensive Management for Appropriate Medical Services (CM) System 14 Verification of Healthcare Benefit Coverage Assessment Activities 16 Quality Assessment Service 18 Quality Incentives Healthcare Benefits Management 20 Healthcare Benefit Fees and Drug Prices 21 Korea Pharmaceutical Information Service (KPIS) 22 Drug Utilization Review (DUR) Post Facto Management of Healthcare Benefits 24 On-site Investigation Supporting Activities 26 Electronic Data Interchange (EDI) & National Data Warehouse (DW) Systems 28 Reserch & Development 30 HIRA in Numbers Organizational Chart

5 HEALTHCARE SYSTEM IN KOREA The healthcare system in Korea has two components, health insurance and medical aid. The national health insurance system provides coverage to all citizens. It is managed comprehensively in the form of social insurance and is funded by beneficiaries contributions. Medical aid component provides support to lower income groups and is funded by the government.

6 HEALTH CARE SYSTEM IN KOREA 04_05 Ministry of Health & Welfare ( the Ministry hereinafter), oversees the national health insurance system. Two other institutions, the National Health Insurance Corporation (NHIC) serves as the insurer and the Health Insurance Review and Assessment Service (HIRA) conducts reviews and assessments of medical costs and service quality. Fee-for-Service (FFS) has been the traditional reimbursement system. Given that FFS payment is based on the number of visits or procedures, it may encourage use of more services. In order to reduce the number of unnecessary services, Diagnosis Related Group (DRG) system has been implemented since For certain illnesses, DRG method pays a lump sum based on patient s diagnosis. The reimbursement process starts with the health institution filing a claim for medical costs to HIRA. After HIRA reviews the claim, it notifies the result to NHIC and the healthcare institution. NHIC then makes the payment to the health institution.

7 BACKGROUND In the past, multiple insurers managed medical insurance*and an insurers union called the National Federation of Medical Insurance (NFMI) conducted the review of medical costs. On July 1, 2000, as part of the medical insurance reform, hundreds of existing insurers were unified into one single insurer. The reform also proposed a plan for an independent agency to conduct medical fee reviews.

8 BACKGROUND 06_07 Before the reform, reviews by the NFMI only considered insurance budget. The reviews were not conducted with objective standards and there were criticisms that the reviews favored the insurers. There was a concern that the medical cost review process mainly focused on preventing overuse of treatment and illegitimate claims, without considering the quality of medical care delivery. Previous review standards also did not promptly reflect the changing medical environment. With the previous review standard, there was an ongoing concern that the standards lacked expertise and objectivity. To perform objective and impartial review of medical costs as well as to prevent potential conflicts between the insurer and medical service providers, Health Insurance Review Agency (currently the Health Insurance Review and Assessment Service) was created. The establishment of HIRA not only provided an opportunity to conduct objective and expert reviews, but also ensured the delivery of appropriate and quality medical services to citizens. In addition, HIRA contributed to the stability of the national health insurance budget by implementing a provision for cost-efficient medical services. lack of client protection Before the Establishment of HIRA lack of financial stability due to inefficient review process lack of objectivity, transparency, and rationality HIRA ensuring the appropriateness of medical care quality Improvements after HIRA enhancing financial stability in the long term establishing an independent agency with clinical authority toward healthcare institutions Medical insurance was later changed to health insurance in order to encompass a broader scope of the services offered to the general public.

9 INTRODUCTION Feedback Area Key Business Area CM System - Conduct proactive activities - Encourage voluntar improvement of medical practices Knowledge & Information Area IT Supports Post-Factum Management - On-site Investigation - Ex-post healthcare benefit management Review Services - Review medical costs and develop the criteria - Verification of Healthcare Benefit Coverage Assessment Services - Assess by item - Disclose assessment results - Process and store data electronically, - Produce data and provide information R & D Healthcare Benefit Management - Develop healthcare benefit criteria - Manage medical fees, drug prices and medical resources - Assess new drugs, new technologies, and new medical materials - Research on healthcare policy - Analyze and monitor healthcare benefits

10 REVIEW ACTIVITIES Review Service Comprehensive Management for Appropriate Medical Services (CM) System Verification of Healthcare Benefit Coverage

11 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE Review Service Medical institutions can submit the claims for medical care costs in the form of EDI (Electronic Data Interchange), electronic media (diskette, CD), or in writing in accordance with the appropriate details. The requests for medical care costs for tertiary hospitals, dental hospitals, and oriental hospitals are conducted at the Headquarters while the review for hospitals, doctors offices and pharmacies are handled at their respective branches. The cost request details received by EDI are automatically reviewed by applying a computerized program that catch missing required fields such as base fees including drug fees, and physician fees as well as check for discrepancies in the application of standards. [Figure 1] [Figure 1] Review Process Medical Care Institutions submit claims to HIRA receipt of claims input / error check and claims check claims undergoing indicator review Staff Review Committee Member Review Committee Review claims undergoing close review comparing claims with standards of medical care reviewing the appropriateness and clinical propriety of health care determining review guidelines settling disputes on different clinical views output of review results Medical Care Institutions cost reimbursed & review results check NHIC medical costs payment

12 REVIEW ACTIVITIES 10_11 The purpose of medical service cost review is to maintain quality standards and an adequate level of medical costs. This is achieved by determining whether the payment claimed by the service providers is clinically valid, formulated in a cost-efficient manner, and calculated according to the Benefit Coverage Standards stipulated in the National Health Insurance Acts. From its introduction, the Korean health insurance system has chosen fee-for-service as the reimbursement system. Although high quality care can be provided under this reimbursement system, there is a risk of providing additional medical services that are unnecessary. The review process can minimize this risk. [Figure 2] [Figure 2] Necessity of Review Service Physician s Clinical Autonomy Principles of Health Insurance Benefits Appeal System HIRA The insurer, healthcare institutions, and patients have a right to make an appeal to HIRA to reverse a decision made by the National Health Insurance Acts.

13 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE Comprehensive Management for Appropriate Medical Services (CM) System The Comprehensive Management for Appropriate Medical Services (CM) is a system that compliments the existing review system. While the existing review system handles individual claims by each episode, the new CM system combines all the individual claims of one institution and classifies that institution into one of three categories according to its claim behavior: intervention (I), warning (W) and monitoring (M). The system provides a summary of customized information on rendered medical services, assessment results, medical resources, and on-site investigation results. The review criteria is also provided to the medical care institutions to encourage them to voluntarily improve any improper practices within their medical services. This guarantees the safe provision of necessary medical services while preventing unnecessary medical services, thereby improving the quality of national healthcare services and rationalizing the costs. [Figure 3] [Figure 3] Overview of the CM System Classification - development of indicators - data analysis and management - classification of healthcare institutions Intervention - counseling, monitoring, & education Behavior Changes Feedback - result analysis - effectiveness evaluation

14 REVIEW ACTIVITIES 12_13 Method 1. Selection of Healthcare Institutions for CM interventions Healthcare institutions are selected for CM interventions by analyzing each institution s claim review and assessment results. About 10 percent of the total medical institutions are classified as intervention institutions and managed by the CM system. 2. Classification of Medical Institutions Based on a range of medical indicators, and review and assessment results, healthcare institutions are classified into three types for the purpose of management. 1) I (Institutions requiring an intervention) - Institutions with a high risk indicator or other problems based on the review results 2) W (Institutions issued with a warning) - Institutions that need to undergo an expert review 3) M (Institutions requiring monitoring) - Institutions other than those under categories I and W. - Institutions that need to be continuously monitored with regard to the pertinent indicators 3. After extracting specific items from the in-depth analysis of the institution according to the Indices, there is exchange of ideas with the medical institution to improve using various methods such as telephone counseling, written correspondence, on-site visitation, and education.

15 Verification of Healthcare Benefit Coverage The Verification of Healthcare Benefit Coverage service by HIRA is designed to provide confirmation to the recipients of medical services as to whether the costs they have incurred are covered under the National Health Insurance Act. When an applicant requests a verification from HIRA, the HIRA reviews the medical records and details of uncovered costs provided by the pertinent hospital. The results are then notified to the applicant, the pertinent hospital, and the NHIC. When there is evidence that excessive charges have been made, the difference must be resettled. Requests for the Verification of Healthcare Benefit Coverage service have been on the increase recently; thus the method of handling claims and the relevant procedures are being improved.

16 ASSESSMENT ACTIVITIES Quality Assessment Service Quality Incentives

17 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE Quality Assessment Service The quality assessment is a system that assesses the clinical validity and cost efficiency of medical services. The assessment system serves a dual role of containing health care costs and increasing medical practitioners to provide appropriate treatments. [Figure 4] [Figure 4] Purpose of quality assessment - prevent overuse, underuse, misuse - minimize the variance of treatment between medical institutions & surgeons promote high quality of medical service Assessment & disclosure of clinical validity & cost effectiveness of medical services Prevention of overuse of treatment, reformation of inappropriate treatment habits, and encouragement of economic treatment activity Items selected for assessment are based on expected impacts, social interests (awareness), medical and pharmaceutical importance, costs, and frequency of use. The area of assessment has continued to broaden since it was first conducted in [Figure 5] [Figure 5] Assessment status by year ~ Stroke C/S CT Volume outcome relationship Prophylactic Antibiotics for Surgery Transfusion Prescribing Knee replacement AMI Stroke CABG C/S CT Volume outcome relationship Prophylactic Antibiotics for Surgery Transfusion Prescribing Long-term Care Hospital Knee replacement AMI Stroke CABG C/S Volume outcome relationship Hemo-dialysis Transfusion Prophylactic Antibiotics for Surgery Prescribing Long-term Care Hospital Psychiatric Hospital AMI Stroke CABG C/S Volume outcome relationship Hemo-dialysis Hypertension Prophylactic Antibiotics for Surgery Prescribing Long-term Care Hospital Psychiatric Hospital

18 ASSESSMENT ACTIVITI 16_17 [Figure 6] Assessment action plan & application of results Preliminary Investigation - selection of assessment items - development of assessment indicators Establishment of Annual Quality Assessment Plan - selection of subject healthcare institutions - disclosure of detailed information online - in the form of guides and indicators Disclosure of Detailed Assessment Items Development of Quality Assessment Standards - collecting healthcare institution information - deliberation by the Central Assessment Committee and disclosure the results Conduct Data Investigations - disclosure of the results Insured Analysis and Application of the Results Utilization of Results - notification of assessment results and education Healthcare Institutions and related organizations Insurer Governments - providing basic policy information and reporting of results - notification of the results for reasonable payment

19 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE Quality Incentives As part of the quality assessment service, financial incentives (Pay for Performance, P4P) are granted to providers who have superior ratings, while the reimbursed amounts can be reassessed and lowered for providers who receive low ratings. Such penalty can expedite the improvement of healthcare service quality as provided under the National Health Insurance. Presently, this project is only applied to the tertiary hospitals. The project was initiated by organizing an efficient assessment structure and developing incentive models that fit Korean standards. A pilot project examines the incentives for service fee adjustment. The P4P pilot project is being implemented with 44 tertiary hospitals from July 2007 to December AMI and Caesarean section delivery cases were selected as priority items of assessment as the providers are required to correct their service patterns. [Figure 7] [Figure 7] P4P Demonstration Scenario Grade1 Grade2 Grade3 Incentive +1% Grade1 Grade2 Grade3 Grade4 Incentive Grade1 Grade2 Grade3 Grade4 Grade5 Grade4 Grade5 Grade5 Disincentive -1% The 2nd half 2007 claim data 2008 report 2008 claim data 2009 report 2009 claim data 2010 report

20 HEALTHCARE BENEFITS MANAGEMENT Healthcare Benefit Fees and Drug Prices Korea Pharmaceutical Information Service (KPIS) Drug Utilization Review (DUR)

21 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE Healthcare Benefit Fees and Drug Prices HIRA is entrusted to produce the healthcare benefit list and the prices including physicians fees, pharmaceuticals and medical materials as well as their application guidelines. The benefit list and the prices are decided and disclosed by the Ministry of Health, Welfare and Family Affairs. Calculation method of physicians fee The physicians fee schedule is determined by multiplying each treatment s RBRV(Resource-Based Relative Value) score to the unit price related to the medical service, also known as conversion factor. Physicians fee = RBRV score X Unit price The RBRV is calculated by considering the amount of resources including time, effort, work amount, manpower, facilities and equipment used in the medical treatment as well as the risk. The Minister of the Ministry notified the score. Each year, a mutual agreement between the head of the National Health Insurance Corporation (NHIC) and the representatives of each group of healthcare providers makes the decision on unit price. Pharmaceutical Price Setting The pharmaceutical reimbursement item list is decided by considering cost-efficiency and benefit adequacy among the pharmaceuticals recognized by the Korean Food & Drug Administration (KFDA) as being safe. The positive list system partly introduced in December 2006 is a system that only lists selected highly cost-effective drugs for healthcare benefits. For new drugs, a procedure was introduced to allow negotiations between the NHIC and the pharmaceutical companies concerning ceiling prices. This occurs after HIRA assesses their benefit inclusions based on the results of the economic evaluation submitted by the companies. Standards for medical material fees The standard fees for medical materials are similar to pharmaceutical price settings. The medical material reimbursement item list includes items recognized by the KFDA as being safe and found to be cost-efficient. The healthcare provider calculates the actual transaction cost within the predetermined upper limit disclosed by the Ministry.

22 HEALTHCARE BENEFITS 20_21 Korea Pharmaceutical Information Service (KPIS) In accordance with the government s policy to effectively manage the distribution information, HIRA operates the Korea Pharmaceutical Information Service(KPIS). KPIS aims to gather and manage the information for the drug distribution flow (production A distribution consumption) rapidly and accurately. In an effort to advance the country s drug distribution system and to create a proper drug statistics system, KPIS also ensures that the drug codes are standardized. Core Duties Collect, survey, process, use and provide the information on drug distribution flows Manage drug bar-codes; manage, conduct research, educate and disseminate the standardization of drug distribution flow information Create and operate databases containing information on drug distribution flows Develop and spread programs aimed at submitting information on drug distribution Survey the status of drug distribution and conduct research into advancing the distribution system Conduct other pertinent services when deemed necessary by the Minister of the Ministry Expected Outcomes Create a comprehensive national statistical infrastructure on drugs Boost the transparency of drug distribution and rationalizing insurance finance Ensure safe use of drugs by the pubic Enhance the management efficiency of pharmaceutical companies

23 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE Drug Utilization Review (DUR) The DUR system refers to the institution or system that was designed to optimize drug utilization by reducing medically inappropriate drugs, unnecessary prescriptions or dispensing. A database using a software program that enables an easy advance checkup was installed to help medical care institutions and pharmacies to screen contraindications or utilization of prohibited drugs for children. This screening can occur at the time when physicians issue prescriptions or when pharmacists dispense drugs. The details of government notices and database information were published on our website ( to disseminate the information. The system, whose pilot operation has been conducted since April 2008, will be expanded its service to nationwide by 2010.

24 POST FACTO MANAGEMENT OF HEALTHCARE BENEFITS On-site Investigation

25 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE On-site Investigation On-site investigation is a type of administrative investigation that determines whether there should be business suspension or penalty fines after verifying the lawfulness of medical service cost claims. The investigation verifies whether the medical services and cost claims made by the medical service provider are identical to the actual medical examination & treatment performed. It also examines whether the claims made were in accordance with the Healthcare Benefit Standards stipulated in the National Health Insurance Acts. Process [Figure 9] On-site investigation process Discovery of Problems Selection of Target Institutions Setup the Investigation Plans Implementation of Data Investigation Result Analysis Expected outcomes Prevention & deterrence of fraudulent claims Complement review limitations with on-site visit Protection of patients rights to access high quality care Assurance of stable insurance funds

26 SUPPORTING ACTIVITIES Electronic Data Interchange (EDI) & National Data Warehouse (DW) Systems Reserch & Development

27 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE Electronic Data Interchange (EDI) & National Data Warehouse (DW) Systems In order for the efficient execution of its duties, HIRA is currently running an in-house Information & Communication Center. HIRA also supports the review & assessment duties with state-of-the art equipment such as 44 servers (including HP Superdome) and various communications and security devices. After providing medical treatment, the medical institutions submit treatment details and file a medical fee claim through an electronic billing system either through Diskettes, CDs or EDI (Electronic Data Interchange). The EDI system was developed to electronically review the medical fees and automatically review items such as medical and drug fees. [Figure 10] 99.9% of total healthcare claims are filed EDI-based electronic claims. EDI requests started in 1995 and a Data Warehouse was constructed in ISO 9001 authentication was approved in EDI (2005), DW (2006) and the Portal System (2007) In 2005, EDI obtained Korean Patent In 2006~2007, HIRA provided consulting services to assist building EDI system in Japan In 2007, EDI obtained South African Patent In 2008, EDI obtained Japanese Patent Various healthcare related information including medical fee request information are stored in the Data Warehouse for 5 years after the completion of the review process. Based on the 137 TB of DW capacity, the information is utilized in R&D through the manipulation of application tools such as OLAP and Data Mining.

28 SUPPORTING ACTIVITIES 26_27 Through the EDI claim system, about 1.28 billion cases of medical fee claims are made in The following are the system s positive effects: Reduction in computer input & request costs Prompt & accurate execution of duties through informatization & smooth exchange of information with medical institutions Creation of precise policy data as well as securing of comprehensive healthcare information Ensuring social transparency of medical costs [Figure 10] EDI Process Medical Care Institutions claim submission Paper Diskettes or CD s EDI files Korea Telecom Relay Center HIRA Computer Program Check-up Monitor Review by Staff Committee member Review Commitee Review DW System Information on management, analysis, etc. NHIC Medical Care Institutions

29 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE Reserch & Development HIRA is carrying out high quality research and development duties. Using the results from research on citizen s medical use and cost, HIRA is promoting improvement in the quality of review & assessment duties and contributing to the scientific and logical policy decision making. In addition, international collaboration activities help to promote globalization through mutual exchange of healthcare information and support the advancement of management processes. Health Insurance Review & Assessment Policy Institute established in February 2007 [Figure 11] Vision and Goals of the Institute Conduct analytical research to improve the quality of core work Build, share and utilize healthcare information systems Leading healthcare policy research institute based on the empirical studies Strengthen the systematic research management system Produce practical research achievements that customers can trust and use Client-oriented Professional High Quality Directions Produce the data required to formulate and establish healthcare policies Create and develop new fields for future development

30 SUPPORTING ACTIVITIES 28_29 Staff Composition : 43 researchers :16 administration staff Structure Head Healthcare Policy Research Dept. Research Planning Division Healthcare Benefit Policy Research Division Review & Assessment Research Dept. Review Research Division Assessment Research Division Healthcare Statistics & Information Disclosure Division In 2009, total 128 researches have completed : 24 review & assessment related researches : 104 health insurance policy related researches Research areas : Analyze & research to improve the quality of HIRA s core activities such as review and assessment : Produce necessary evidence to form healthcare policies : Construct & utilize of healthcare information knowledge system : Conduct highly reliable client-centered research : Achieve Globalization of activities through international cooperation in the health care research field

31 HEALTH INSURANCE REVIEW & ASSESSMENT SERVICE HIRA IN NUMBERS Establishment: July 1, 2000 Headquarters & 7branch offices nationwide Current Employees: Total 1,749 - Executives (including the president): 5 - Senior Management: Review Staff: Administration: Researchers: 43 - IT Specialists: 158 ORGANIZATIONAL CHART President Auditing Dept. Secretary s Office Health Care Review & Assessment Committee Administration Development Business Health Insurance Review & Assessment Policy Institute Auditor Executive Director Executive Director Executive Director Executive Director Seoul branch Auditing Dept. Planning & Coordination Dept. Healthcare Benefit Standards Dept. Comprehensive Review Planning Dept. Healthcare Policy Research Dept. Korea Pharmaceutical Information Service Busan branch General Affairs & Management Dept. Medical Resources Management Dept. Healthcare Cost Reviewing Dept. Review & Assessment Research Dept. Daegu branch Customer Service Dept. Drug Management Dept. Quality Assessment Dept. Gwangju branch Education & Public Relations Dept. Information & Communication Department Healthcare Expenses Investigation Dept. Daejeon branch Suwon branch Changwon branch

32 M oreover, HIRA is planning to exert diligent effort into elevating the quality of national healthcare. Through actively pursuing co-research projects as well as supporting research activities by providing and sharing the HIRA s vast wealth of information, HIRA will fulfill the role of the disease information & statistics hub center.