China unveils new primary-care illness catalogs to reform medical insurance payments

China published third-generation catalogs of common primary-care illnesses on Wednesday, the latest step in a medical insurance reform aimed at steering patients with minor ailments away from crowded hospitals and toward community-level facilities.

At a news conference organized by the National Healthcare Security Administration on Wednesday, authorities issued 31 Diagnosis-Related Groups and 127 Diagnosis-Intervention Packets — the newest phase of a payment overhaul that reimburses hospitals per case rather than for each service provided.

Under DRGs, patients with clinically similar conditions are grouped together, and hospitals receive a fixed payment per group, regardless of how much care is actually provided. Under DIPs, each combination of diagnosis and treatment is assigned a point value, and hospitals are paid according to the points they accumulate within a regional budget.

The catalogs replace fee-for-service payment, under which hospitals were reimbursed for every test and procedure — an arrangement widely blamed for encouraging overdiagnosis and unnecessary treatment.

Speaking at the news conference, National Health Commission officials said that local governments may adjust the catalogs based on regional medical resources, grassroots service capacity and local epidemiological characteristics.

A new "same disease, same payment" rule standardizes reimbursement rates for the designated conditions across all tiers of hospitals within each regional insurance pooling area.

Previously, tertiary hospitals received higher payouts for identical treatments — a financial incentive that exacerbated overcrowding at top-tier hospitals.