The largest payor:

Medical device reimbursement - important aspects on the German market

Reimbursable medical devices are financed in Germany by various groups of persons, institutions and payers. The largest payor for reimbursable medical devices is the GKV.

Introduction: Purchasing reimbursable medical devices

Represented by some 100 statutory health insurers, the National Association of Statutory Health Insurance Funds (GKV) is the largest payer institution. The largest single health insurance fund in Germany, based on the number of insured persons, is the Techniker Krankenkasse (TK), or technicians’ sick fund, currently insuring around 10 million individuals. Alongside the statutory health insurers, the private health insurance companies play an important role in reimbursing costs for medical devices. Nearly 9 million German citizens are covered under the numerous private health insurers; the rates can vary substantially depending on the extent of coverage and benefits chosen.

There are two separate systems for regulating the reimbursability of medical devices in the outpatient sector—one for the statutory and one for the private health insurers. For example, while medical practice supplies are important for the outpatient sector, the medical device reimbursement process in the inpatient sector is governed by uniform rules essentially independent of any differentiation between statutory or private plans. Beyond the question of whether a medical device is reimbursable, the focus of certain products can also be directed at the self-payer market. Many medical devices that are not subject to sales restrictions can be bought and used by patients themselves. That means that the costs for these medical devices might not be reimbursed by the statutory health insurance. Bandages or plasters for the skin, contact lenses and body temperature thermometers are some examples of medical devices that patients usually pay for themselves, without receiving reimbursement from any of the medical reimbursement companies. The reimbursability of medical devices is subject to their status as prescription-only products; for instance, many medical devices listed as assistive devices in the Medical Aids Directory of the German statutory health insurers do not require a prescription. Once listed in the Directory, however, they are generally reimbursable at the expense of the statutory scheme and can be prescribed. Conversely, there are also prescription-only medical devices that are not covered by any medical device reimbursement strategy. This can have various reasons, e.g. the manufacturers of such medical devices may intentionally design them to be prescribed exclusively by private sector physicians.

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How statutory health insurers reimburse medical devices

Medical devices for medical care may be used in both outpatient and inpatient settings. However, the reimbursement processes differ fundamentally from those for pharmaceuticals.

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Medical device reimbursement in the outpatient sector

Barring the exceptions listed in Section 34 SGB V, pharmaceuticals may be used in the outpatient sector, making them fundamentally reimbursable. However, the reimbursability of medical devices differs from that of pharmaceuticals in that they and the medical methods associated with them in outpatient settings are subject to "prohibition with provisional permission". That means that medical devices subject to a positive judgement by the German Federal Joint Committee (G-BA) under Section 91 the 5th Book of the German Code of Social Law (SGB V) cannot be used at the expense of the statutory scheme. Medical devices and the methods associated with them are thus fundamentally excluded from the reimbursement policies of the statutory scheme. Although the CE marking for medical devices is a mandatory prerequisite for their reimbursability, the marking per se does not entail automatic reimbursement under the statutory insurance scheme. The statutory health insurers only reimburse medical devices in the outpatient sector if they are connected to a recognized therapy or treatment method and remain with the patient for further use or are intended for single use only. Excluded from this are some low-cost medical devices referred to as "medical practice supplies". The other costs for medical devices are regarded as overhead for operating a doctor’s practice, reimbursed within the fee and invoiced indirectly under the EBM number (uniform assessment standard) of the Statutory Health Insurance Funds’ fee schedule.

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Medical device reimbursement as assistive devices in outpatient settings

Medical devices reimbursable as assistive devices and listed in the Medical Aids Directory undergo additional quality testing. Once successfully listed in the Medical Aids Directory, they are recommended as reimbursable but subject to different pricing and contractual reimbursement regulations. As a result, physicians are partly bound to fixed rates or maximum quantities when prescribing assistive devices to be covered by the statutory medical reimbursement companies.

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Medical device reimbursement for inpatients

Hospitals are subject to the legal principle of "permission with provisional prohibition". This means that new examinations and treatment methods can generally be used as long as they have not been excluded by the G-BA under Section 137 c SGB while also meeting certain criteria. As a rule, hospitals are reimbursed for products and services at a fixed rate per discharge based on diagnosis, treatment and type of discharge or diagnosis-related groups (DRG). Since 1 January 2004, it is nationwide policy that treatments in hospitals be invoiced according to DRGs. Applicable to most medical device reimbursement in Europe, DRG rates specify the amount hospitals are reimbursed according to the type and severity of the disease diagnosed and treatments administered. The rules governing this medical device reimbursement process apply to patients insured under both statutory and private schemes. The reimbursement system in hospitals does not differentiate between these two groups of insured individuals in terms of their medical care. Although privately insured patients can claim entitlement to additional services in the hospital (like accommodation in a single room or treatment by the head physician), the costs for reimbursement of medical devices used on patients is not affected thereby.

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Exceptions for medical device reimbursement in hospitals

Excluded from the aforementioned rules governing the reimbursement of medical devices are fixed assets like X-ray machines or hospital beds intended for refinancing through the dual hospital financing, a system of cost sharing between state government and hospitals. Indirect or proportional reimbursement of costs through dual hospital financing is possible for these medical devices; direct reimbursement of costs by the statutory insurance is excluded for large-scale equipment.