Sang-Soo Lee, PhD, MBA, Sr. Director, Government Affairs and Market Access (GAMA), Medtronic Korea, Seoul, South Korea and Head of Center of Expertise (COE), GAMA, Medtronic Asia Pacific

MoHW decided on the temporary reimbursement listing of DTx and AI-enabled medical technologies

On July 26, 2023, the Ministry of Health and Welfare (MoHW) made a significant decision regarding the temporary listing of digital therapeutics (DTx) and artificial intelligence (AI)-enabled medical technology. [1] As part of this decision, a national health insurance (NHI) application plan has been prepared for DTx and AI-enabled imaging diagnostic medical technology, both of which represent new and innovative medical technology fields, with the plan set to take effect in September 2023. The primary objective behind this decision is to create opportunities for the utilization of these new medical technologies. In order to achieve this, a temporary listing method will be applied to the NHI, specifically tailored to the unique characteristics of the technology in question. Under this new arrangement, the use of 'innovative health technology' will be facilitated, which will involve the designation of integrated review and evaluation of such technology. Consequently, a maximum temporary code period of 3 years under NHI will be assigned to enable the temporary application of reimbursement payment for these technologies. Moreover, DTx and AI-enabled medical technology will be granted the option of entering the market as new medical technologies by allowing for non-coverage or Selective Benefit (which requires a higher patient copayment rate) to be chosen at the time of application. This approach aims to encourage the adoption and use of these advancements within the healthcare system.

The MoHW has introduced a temporary listing system within NHI for up to 3 years for DTx and AI-enabled medical technology. This approach takes into account that medical institutions may need time to utilize these technologies and gather clinical evidence to demonstrate their efficacy before they can be formally listed for coverage and payment. Following the temporary listing phase, a comprehensive health technology assessment (HTA) will be conducted to make a final decision on whether these technologies will be covered and paid for under the NHI upon formal listing. Given that innovative health technology may replace existing medical technology, the NHI payment will be in the form of Selective Benefit. This allows applicants (manufacturers) to choose non-coverage for their technology if they wish to introduce it to the market. However, for items that are not covered, measures will be implemented to monitor and manage cases of misuse and abuse through mandatory claims and reporting of non-coverage amounts.

A payment plan suited to the unique characteristics of DTx and AI-enabled medical technology will be developed. For DTx, the payment structure will be divided into a physician fee schedule and a DTx usage fee. The physician fee will be remunerated for managing and evaluating the effects of prescriptions, while the DTx usage fee will be determined by the Digital Health Expert Evaluation Committee, taking into account factors such as cost, application amount, and international cases, etc. Manufacturers will be required to submit the rationale for price calculation, including the basis for the application amount, domestic distribution price, and expected usage, etc.

Regarding AI-enabled medical technology, it will be categorized to similar fields and paid through add-on payments in addition to existing payments. However, to mitigate the risk of healthcare provider-oriented use leading to excessive non-coverage utilization, measures will be implemented to prevent such abuse. In summary, the introduction of a temporary listing system in the NHI for DTx and AI-enabled medical technology aims to strike a balance between facilitating their adoption and ensuring that they are effectively evaluated before formal coverage and payment decisions are made. This approach also addresses concerns about misuse and abuse while encouraging innovation in the healthcare sector.

In August 2023, the MoHW will develop and distribute the NHI application guidelines, which will encompass the fundamental principles of temporary listing as well as the method for payment calculation specifically applicable to DTx during the temporary listing period.

HIRA announced the research plan for medical device reimbursement pricing rule

On July 11, 2023, the Health Insurance Review and Assessment Service (HIRA) announced the research plan for the ‘Improvement of the medical device reimbursement pricing rule under the National Health Insurance (NHI)’. [2]

Research Background and Objectives

Due to changes in the healthcare environment and the development of the medical industry, there has been a rise in emergence of new medical devices and technologies. The number of listed items has increase over the years, with 29,869 items in 2018, 32,598 items in 2020, and 35,570 items in 2022.

The continuous increase in the number of listed medical devices has had an impact on the finances of the NHI and overall medical expenses. Therefore, it is essential to improve the adequacy of the medical device reimbursement pricing rule to ensure reasonable price determination. The total claimed amounts for medical devices under the NHI were 3.21 trillion Korean won / 2.47 billion USD in 2018, 3.88 trillion Korean won / 2.98 billion USD in 2020, and 4.42 trillion Korean won / 3.40 billion USD in 2022.

Furthermore, as part of the medical device management system improvement plan, it is necessary to review the reasonableness of the price calculation for already listed items and develop institutional improvement plans.

In order to enhance the adequacy of the medical device reimbursement pricing rule, ensure transparency, and gain acceptance for the development of institutional improvement measures, research is being conducted on methods to improve the medical device reimbursement pricing rules under the NHI.

Research Contents

The research will encompass the following aspects:

Review of medical device reimbursement pricing rule;

• Examination of the current status of laws and regulations related to the medical device reimbursement pricing rule in Korea and other countries
• Comparative analysis of pricing rules in Korea and other countries

   

  Improving the pricing rule adequacy in Korea:

  When initially listing the medical devices;
  

• Evaluation of the multiplier (currently set at 1.78 times) used for determining the manufacturing cost of locally manufactured devices and imported device costs (FOB) during the initial listing of medical devices
• Development of a reasonable and appropriate multiplier
• Prepare a plan to improve the pricing rule for first-entered devices and follow-on devices (including preparation for management measures, such as the appropriateness of differential additional pricing rates for heavily R&D invested devices and follow-on devices)
• Formulation of a plan to enhance the pricing rule for both first-entered devices and follow-on devices. This includes considerations for management measures, such as assessing the appropriateness of differential additional pricing rates for devices with significant research and development investments and follow-on devices

   

  When improving already listed devices;

• Establishment of criteria for identifying devices that require the preservation of manufacturing costs and development of an appropriate pricing rule based on "differences in dimension, capacity, size, and content”
• Review of pricing rule for reusable medical devices
• Evaluation of the pricing rule per functional category of medical devices

   

  Setting the direction of the improvement plan for the pricing rule and ensuring acceptance:

• Organizing meetings, conducting focus group interviews (FGI), and other forums to gather input and opinions from diverse stakeholders, including companies, industries, academia, and other relevant parties.

   

  Developing institutional improvement measures for the reasonable pricing rule:

• Providing recommendations for institutional improvement directions and proposing solutions to address identified issues.
• Establishing a detailed pricing rule that incorporates the suggested improvements and preparing a proposal for the revision of relevant legal regulations.
• Developing specific methodologies, including guidelines for submission documents and the process that companies need to follow in alignment with the enhanced pricing rule.

  
  

  Expected Effects and Utilization

• Developing a legal and institutional basis for pricing rule improvement
• Establishment of institutional improvement measures for the pricing rule
• Efficient management of NHI finances and national medical expenses through system development and rational operation of the pricing rule through institutional improvement plans

   

  RWE Can Be Used for Regulatory Approval of Digital Health Medical Devices

  On June 1, 2023, the Ministry of Food and Drug Safety (MFDS) published the revised "Regulations on Medical Device Approval, Notification, and Review, etc." [3,4] This revision allows real-world evidence (RWE) to be recognized as clinical trial data for medical devices that incorporate digital technologies such as big data and Artificial Intelligence (AI). With this revision, RWE is acknowledged as clinical trial documentation validating the safety and efficacy of the following:

• Medical devices utilizing digital technologies like big data and AI
• Medical devices designated as rare and urgently needed.
• Medical devices manufactured using 3D printers, upon receiving regulatory approval as a medical device.

   

  Moreover, the revision specifies the inclusion of the following elements to ensure reliability, including the definition of RWE and data quality:

• Relevance of real-world information, such as type, source, collection method, inclusion criteria, and exclusion criteria.
• Information on the medical device being used.
• Matters related to the planning, implementation, and result analysis necessary for collecting and evaluating real-world information.
• Personnel responsible for collecting and analyzing usage information.
• Indications, performance, procedure method, and analysis items of real-world information.

   

  The recognition of RWE as a clinical trial document supplements the previous "Guidelines for RWE Application of Medical Devices in 2019" and incorporates it into the approval regulations to ensure predictability and reliability in medical device approval reviews. RWE can be applied for new approvals or supplementary approvals for changes in the intended use of the afore-mentioned medical devices. Pre-consultation or discussion may be required in advance when applicants undergo the regulatory approval process using RWE.

   

  HIRA Announces Research Plan for "Monitoring Utilization and Status of Non-Covered Services and Items in 2023”

  On June 15, 2023, the Health Insurance Review and Assessment Service (HIRA) announced its research plan for the "Monitoring Utilization and Status of Non-Covered Services and Items in 2023." [5] The main objectives of the plan are as follows:

• Researching the overall experience of citizens who have used or have not used non-covered services and items, including their awareness of the non-covered program, their experience and the effects of utilization, and their encounters with prior explanations of non-covered services and items.
• Conducting a satisfaction survey on the content of non-covered medical cost information and the prior explanation system provided on the HIRA website and mobile platforms. This survey aims to assess the actual usage of public information, the rate of intent to recommend to others, the level of satisfaction, and areas for improvement.
• Analyzing the results of satisfaction and status monitoring, identifying key findings from the survey, and formulating improvement strategies based on these implications.

   

  The survey will involve a total of 1,000 participants, including 800 individuals who have used the non-covered medical cost information service and 200 individuals who have not used the service. The survey is scheduled to be conducted between August and December 2023, employing both quantitative and qualitative research methods:

• Quantitative research: Online surveys using structured questionnaires.
• Qualitative research: In-depth interview research through focused group interview (FGI) and usability evaluation

   

  HIRA announced a plan for the “Study on Selective Benefit program impact assessment”

  On April 27th, 2023, the Health Insurance Review and Assessment Service (HIRA) announced a plan to conduct a "Study on the Impact Assessment of the Selective Benefit program". [6] The Selective Benefit program was implemented in July 2014 and has now entered its 10th year. In light of this milestone, there is a need to analyze and understand the positive effects of the program as well as any operational problems that have arisen. To address this need, a study has been planned to analyze the impact of the policy, including the performance evaluation of the 10-year implementation of the Selective Benefit program and changes in medical service use patterns.

  The study will cover the following topics:
  

  Assessment of the impact of the Selective Benefit program:

• Assessment of impact before and after the introduction of the program in terms of process indicators for each Selective Benefit item
• Assessment of effect through comparative analysis of data before and after the introduction of the Selective Benefit program
• Assessment of effects according to the results of listing and re-assessment of Selective Benefit items
• Listening to the opinions of stakeholders such as healthcare providers and patient groups on the Selective Benefit program
• Derivation of implications for the Selective Benefit program

   

  Through this study, HIRA aims to suggest a direction for program improvement through impact assessment before and after the introduction of the Selective Benefit program.

   

  References 

  1. https://www.mohw.go.kr/react/al/sal0301vw.jsp?PAR_MENU_ID=04&MENU_ID=0403&page=1&CONT_SEQ=377470
  2. https://www.hira.or.kr/bbsDummy.do?pgmid=HIRAA020004000000&brdScnBltNo=4&brdBltNo=11545&pageIndex=1&pageIndex2=1#none
  3. https://www.mfds.go.kr/brd/m_207/view.do?seq=14888&srchFr=&srchTo=&srchWord=&srchTp=&itm_seq_1=0&itm_seq_2=0&multi_itm_seq=0&company_cd=&company_nm=&page=1
  4. https://www.mfds.go.kr/brd/m_99/view.do?seq=47313&srchFr=&srchTo=&srchWord=&srchTp=&itm_seq_1=0&itm_seq_2=0&multi_itm_seq=0&company_cd=&company_nm=&page=1
  5. https://www.hira.or.kr/bbsDummy.do?pgmid=HIRAA020004000000&brdScnBltNo=4&brdBltNo=11535&pageIndex=1&pageIndex2=1#none
  6. https://www.hira.or.kr/bbsDummy.do?pgmid=HIRAA020004000000&brdScnBltNo=4&brdBltNo=11522&pageIndex=1&pageIndex2=1#none