Market-Access is increasingly becoming the key to sustainable market-success for medical devices within Germany.

For the healthcare industry we offer our market access services German-wide following a proven growth strategy that identifies and develops new markets or new market segments for your products.

All medical devices and diagnostics are subject to contracts (Hospitals, Medical Doctors, and Health Insurers). These contracts differ between hospitals and ambulant services.

All applications for reimbursement of CE-certified medical devices and care products must be submitted to the SHI umbrella organization. Applicants must provide information supporting product functional suitability, safety, quality, and – subject to requirement – medical or nursing care benefits. The SHI informs applicants of the application decision in writing.

Broad Mechanisms of Hospital Funding

Hospital Funding in Germany is regulated by the “Hospital Financing Act” which establishes a dual funding mechanism for German hospitals. Under the Act, each state is responsible for covering large investment costs and the procurement of assets with a long economic life (more than three years). These types of investments need to be negotiated and agreed between the state and the hospital in question. Inpatient hospital activity is the responsibility of each patient’s SHI (or private insurer) and this covers facility maintenance costs (unless the facility is going to be completely replaced in which case the state would be liable for that), labour costs and disposable costs. The principle mechanism of inpatient activity reimbursement to hospitals by the SHIs (or private insurers) is a highly evolved Prospective Payment System (PPS) called the German DRG or G-DRG.

Different to other healthcare systems , the German DRG system does not aim to incentivise, or disincentivise hospital activity; instead it aspires to accurately reimburse all activity types in a budget-neutral way for the hospital.

The G-DRG system is maintained by the “Institute for the Hospital Remuneration System” (Institut für das Entgeltsystem im Krankenhaus, located in Siegburg, Germany) also known as InEK. InEK is responsible for the collection and processing of hospital costing data, the updating of the funding units associated with each funding code and the updating of the funding codes themselves. The institute is also responsible for certifying the logic system of various grouper software available to German hospitals. However, InEK does maintain neither the diagnostic, nor the procedural codes employed by G-DRG, which are responsibilities of the “German Institute of Medical Documentation and Information” (Deutsche Institut für Medizinische Dokumentation und Information) or DIMDI.

German Diagnostic Code System

The diagnostic codes system employed by G-DRG is the ICD-10-GM “German Modification”).  DIMDI maintains and updates the ICD-10-GM on an annual basis. As the name implies, the system is based upon and closely resembles the ICD-10 maintained by the World Health Organisation (or WHO).

German Procedure Code System

Procedure codes (arguably one of the most important pillars of successful market access in Germany) in the G-DRG come from the OPS (Operationen- und ProzedurenSchlüssel) system which is also maintained by the DIMDI and also updated on an annual basis. In contrast with ICD-10-GM, OPS is unique to Germany.

Despite the introduction of the G-DRG system, hospitals in Germany are not free to increase activity beyond pre-defined limits. Through G-DRG based calculations, German hospitals are still under a system of “global budget”. Therefore, all new technologies are essentially attempting to capture a share of a budget that remains largely stable throughout the years. Successful market access will be based either on increases of this activity caps or on more efficient inpatient activity that will allow space for new procedures within current limits.

As with every PPS system, the reimbursement of newly introduced technologies depends on the availability of specific diagnostic and procedure codes, as well as the adequate uptake and correct coding of this new technology by the hospitals that participate in InEK’s calculation system. InEK is updating G-DRG on an annual basis, using however data from the previous two years. This may contribute to a time lag for successfully funding a new technology or creating new funding codes for it. Furthermore, as explained, correct coding of a new technology will not necessarily lead to sufficient reimbursement immediately. Therefore, German hospitals (who are constantly under pressure to contain expenditure and improve efficiency) may have a counter-incentive against potentially useful and cost-effective or cost-efficient technologies because of the certainly negative initial budget impact. In addition, diagnostics and medical devices for hospital use often are part of the procedure (flat rate per case) and therefore do not necessarily lead to a new coding. This creates even more disincentive to introduce a new additional procedure (e.g. diagnostic) since it most probably decreases the margin.

Recognising the need for a mechanism allowing innovation within the G-DRG system, the InEK has created an “on-top” funding process for innovative products. This process, known as NUB (Neue Untersuchungs- und Behandlungsmethoden) Application can be filed by hospitals only for technologies that have just been introduced in Germany. Every hospital will need to apply separately (electronic application at InEK) and the “on-top” payment (if the application is approved) will be available only to the hospitals that applied for it and not to every hospital in Germany. Approved applications are subsequently monitored by InEK and should the new technology be adequately used; correctly coded; and, exhibit a cost profile of sufficient difference, the InEK may integrate it permanently to the G-DRG. It should be noted that InEK makes no decision on the actual amount of the “on-top” payment. That will need to be directly negotiated between the successful hospital applicants and the SHIs. The NUB pathway has the potential to accelerate market access for new technologies but requires significant effort from its users.

• Market research: Potential segmentation analysis along healthcare-system, geographic, competition and product-benefit lines.
• Market Analysis: How many hospitals could potentially use your product and how often?
• Pricing: What is the achieveable price for your product or service?
• Cost-Benefit-Strategy/Health Economics: Achieving potential pathway for payment of your product in the German Healthcare Market, especially for Medical Devices.
• Reimbursement Application and Regulatory support: Providing you with needed support for new DRGs, ZEs, NUBs, OPS, ICD coding and reimbursement analysis.
• Market entry strategy: Develop the most suitable and profitable market entry strategy for you.
• Market entry: Execute the market entry strategy for high potential hospitals in the healthcare industry, liase with reknown Medical Societies and German KOLs.

Please contact us in case of any further enquiries and contact us for a free consultation with regards to our services.