On May 25, the Financial Supervisory Service (the “FSS”) announced its plan to establish and implement consumer protection measures to prevent insurance companies from unfairly refusing to pay insurance proceeds and engaging in excessive litigation in relation to new medical technology.
In principle, if the safety and effectiveness of a medical technology have not been proven through a new medical technology assessment, said technology would be categorized as a discretionary non-reimbursable item (which is not a statutory non-reimbursable item under the National Health Insurance Act), and hence would not be covered by health insurance (i.e., indemnity insurance for medical costs). However, if the new medical technology is essentially similar or identical to an existing technology that has already been assessed to be safe and effective, it may qualify for coverage as a statutory non-reimbursable item. In addition, if a medical institution satisfies the following requirements, as acknowledged by the Supreme Court, a discretionary non-reimbursable medical service may be eligible for coverage by health insurance.
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Requirements acknowledged by the Supreme Court (Case Number: 2010Du27639, etc.) ① Urgency of treatment; ② medical necessity; and ③ the patient’s consent |
Considering the above aspects of new medical technologies, the FSS announced its plan to have insurance companies revise the criteria for reviewing health insurance proceeds for consumer protection and to improve litigation procedures to prevent any damage to consumers, as detailed below.
1. Revision of the Review Criteria for Insurance Proceeds
An insurance company may outright refuse to pay insurance proceeds for a specific medical technology, arguing that it falls outside the approved scope as a new technology. To mitigate this risk, revisions should be made to the criteria for reviewing health insurance proceeds. When determining the eligibility of insurance proceed payments, insurance companies are now required to conduct comprehensive evaluations, considering (i) the relevant terms and conditions of insurance policy, (ii) court precedents, (iii) confirmation by the Health Insurance Review and Assessment Service (the “HIRA”) on non-reimbursable medical expenses, and (iv) other pertinent factors.
2. Improvement of Litigation Procedures
Improvements will be implemented in the litigation procedures as well. Under the new procedures, insurance companies are mandated to notify their customers, prior to initiating lawsuits against them, to use the confirmation system for non-reimbursable medical expenses provided by the HIRA, and verify the outcome. Furthermore, insurance companies are directed to regularly assess the adequacy of their litigation proceedings through their internal litigation management committee or other established mechanisms.
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[Reference: HIRA’s confirmation system for non-reimbursable medical expenses] The system allows patients to request a confirmation of their eligibility for national health insurance coverage of non-reimbursable medical expenses they have paid to medical institutions.
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The FSS announced these consumer protection measures in response to the ongoing disputes concerning health insurance proceeds for new medical technology. Therefore, it is recommended that relevant parties promptly and diligently incorporate them into their work procedures pertaining to health insurance proceed payments and related litigations.
