BPI Backs Installment Payments, Returning Funds to Health Insurers’ Morbi-RSA Funding Pool

PRICENTRIC BRIEF:

• For the Federal Association of the Pharmaceutical Industry (BPI), pay-for-performance (P4P) models are the best way forward for the morbidity-oriented risk-sharing compensation (Morbi-RSA) fund among health insurers
• The Law for Fair Cash Competition in Statutory Health Insurance (Fairer-Kassenwettbewerb) was passed earlier this year, aiming to level the playing field between statutory health insurance companies
• As it stands, it’s more advantageous for health insurers to take over the deductible for one-off payment models and, thus, receive a larger part of the reimbursement amount from the risk pool; however, BPI believes the EUR 100,000 deductible should only be paid on the first installment, making this payment model commensurate to conventional reimbursement for one-off payments, and all refunds should be returned to the risk-pool

THE DETAILS

BERLIN, Germany – While risk-sharing among health insurance funds has been common practice in Germany for some time, the Law for Fair Cash Competition in Statutory Health Insurance (Fairer-Kassenwettbewerb) was passed earlier this year, aiming to level the playing field between statutory health insurance companies.

The Law seeks increased competition through organizational reforms. One such measure includes the introduction of a risk pool to “cushion” expenditure on high-cost medicines by reimbursing health insurers 80% of their expenses, which exceed 100,000 euros per year.

For the Federal Association of the Pharmaceutical Industry (BPI), pay-for-performance (P4P) models are the best way forward for the morbidity-oriented risk-sharing compensation (Morbi-RSA) fund to help more fairly share the risk, but with a few minor tweaks.

BPI is not calling into question AMNOG’s process behind evaluation, negotiation, and reimbursement; rather, utilizing P4P models for reimbursement would better benefit complex and highly personalized therapies, especially advanced therapy medical products (ATMPs).

According to BPI, there are two major types of P4P models, 1) installment payment models, as in payment at checkpoints, and 2) reimbursement in full if drugs works or only partial reimbursement if the drug does not work as promised. These approaches have been adopted to divide the risk between insurers and drugmakers.

The current design of the risk pool is unattractive, said BPI.

When it comes to one-off payments, the intended deductible is borne once by the health insurance company whereas for payment installments, the deductible is payable several times, at each installment. As it stands, it’s more advantageous for health insurers to take over the deductible for one-off payment models and, thus, receive a larger part of the reimbursement amount from the risk pool.

The two P4P models should be taken into consideration for the Morbi-RSA. BPI explained that such models are feasible today, however, health insurance companies are poised to benefit from therapy failure, even though the original payment comes from a risk pool.

For BPI, under the Installment Payment Model, the EUR 100,000 deductible should only be paid on the first installment, making this payment model commensurate to conventional reimbursement for one-off payments. Further, it must be possible for expenditure be recorded separately for the risk pool. And with this, refunds under P4P payment models must be returned to the risk pool as they were withdrawn.

BPI supports tweaked legislation to enhance the utilization of such models, preventing further advantaging of insurers when it comes to reimbursement. This move will allow a fairer playing field and more funds to be returned to the risk pool so that efforts can be spent on helping patients receive the innovative treatments they require.