China’s Medical Insurance Fund Spent $8.4 Billion on Special Cases
China’s National Healthcare Security Administration (NHSA) announced that the medical insurance fund spent approximately 61.26 billion yuan ($8.4 billion) on special case reviews in 2025, according to a report published by People’s Daily. A total of 2.435 million cases were submitted for review, with 2.071 million approved at a pass rate of 85.1%, averaging 29,600 yuan per approved case.
Context: The Special Case Review Mechanism
The special case review mechanism (特例单议) is a critical supporting policy for China’s Diagnosis-Related Group (DRG) and Diagnosis-Intervention Packet (DIP) payment reform. Established formally in July 2024 when the NHSA issued the DRG/DIP 2.0 grouping scheme, the mechanism addresses a key concern of fixed-payment models: that hospitals may be discouraged from treating complex, high-cost patients.
Under this system, medical institutions can apply for special review of cases involving long hospital stays, high medical costs, use of new drugs or technologies, or complex multi-disciplinary treatment. After expert evaluation, approved cases receive adjusted payment — either actual cost reimbursement or enhanced payment rates. As the NHSA explained, the mechanism “effectively reshapes the decision-making environment for hospitals in admitting complex and critically ill cases.”
National Implementation
All pooling regions (统筹地区) across China have now established the special case review mechanism. Approximately 80% of regions conduct reviews quarterly, with some having moved to monthly reviews to accelerate settlement cycles. The NHSA has emphasized that it will continue to improve the mechanism, encourage proactive applications from medical institutions, and guide local authorities to regularly publish results.
Provincial-level implementations have shown notable results. Hebei Province, for example, has implemented an online “apply anytime, review promptly, pay monthly” system. As of October 2025, it had reviewed over 56,000 cases with a 95% on-time completion rate and monthly settlement of approximately 80 million yuan. Fujian Province introduced an AI-assisted review system to improve efficiency, while Henan’s Anyang city implemented tiered quarterly and annual review mechanisms.
Impact on Hospitals and Patient Care
The mechanism has received positive feedback from medical institutions and frontline clinicians. A doctor at Hebei Medical University First Hospital noted that in the past, there were concerns about admitting extremely critical patients whose costs far exceeded payment standards. “Now, through special case reviews, we receive reasonable compensation, giving the team more confidence to adopt aggressive treatment plans,” the doctor said, as reported by the NHSA.
Qinghai University Affiliated Hospital, a regional critical care center, received over 10 million yuan in compensation through special case reviews in 2025. The hospital saw cases using new drugs and technologies grow from 43 in 2024 to 156 in 2025 — a 262% increase — significantly enhancing its capacity to treat critically ill patients.
Broader Significance
The 61.26 billion yuan expenditure represents a small but strategically important fraction of China’s total medical insurance fund, which was approximately 2.5 trillion yuan in 2024. However, the mechanism’s significance extends beyond its financial scale. By explicitly supporting the use of new drugs, consumables, and technologies, it creates financial incentives for medical innovation while ensuring equitable access to care for the most severely ill patients.
The NHSA has stated that it will continue to refine the mechanism, support clinical application of new technologies, and guide local authorities in regularly disclosing review outcomes. As Xinhua News Agency reported, the agency aims to “support medical institutions in their innovative development and alleviate concerns about treating critically ill patients.”
What to Watch
As China’s healthcare payment reform continues to evolve, several questions remain: How does the 2025 expenditure compare to previous years? What is the geographic distribution of approved cases across provinces? And what share of spending is attributed to new drugs and technologies versus long-stay or high-cost cases? The answers to these questions will help assess the long-term trajectory of this important policy mechanism.