South Korea’s Ministry of Health and Welfare will implement a new “managed care” system for certain non-essential medical services, effective February 19th, according to a government announcement. The change, formalized through an amendment to the Enforcement Decree of the National Health Insurance Act, aims to address concerns over excessive utilization of services not covered by the national health insurance.
The amendment adds a provision to Article 18-4, Paragraph 1 of the decree, outlining “cases where management is necessary for appropriate medical utilization for the purpose of promoting social benefits.” This allows for the classification of certain non-covered services as “managed care,” subjecting them to increased oversight and cost-sharing for patients.
Under the new system, patients accessing these designated “managed care” services will be responsible for 95% of the costs, significantly increasing their out-of-pocket expenses. The move is intended to curb what authorities describe as overconsumption of non-essential treatments like cosmetic procedures, certain physiotherapy sessions, and traditional Korean medicine treatments, which collectively account for an estimated 25 trillion won annually in patient spending, according to reports.
The legal basis for the “managed care” system was established through revisions to the National Health Insurance Act, which stipulates the purpose of the law as contributing to the improvement of national health and the promotion of social welfare through the provision of insurance benefits for disease prevention, diagnosis, treatment, rehabilitation, childbirth, death, and health promotion (National Health Insurance Act, Article 1). The recent amendment builds upon this framework by creating a specific pathway for incorporating previously non-covered services into a managed system.
The Ministry of Health and Welfare has not yet released a comprehensive list of services that will be classified as “managed care,” but officials have indicated that treatments subject to frequent overutilization and lacking clear medical necessity will be prioritized. The government also announced the launch of a special police corps dedicated to investigating and cracking down on illegal medical practices, signaling a broader effort to regulate the healthcare sector.
The Ministry of Health and Welfare has also announced plans to expedite the review process for coverage of treatments for rare and intractable diseases, reducing the timeframe for approval from 240 days to 100 days. This initiative appears to be a separate, concurrent effort to address healthcare access issues, but does not directly relate to the implementation of the “managed care” system.
