On the Alterations Introduced in the Compulsory Medical Insurance Rules

In September 2011, a number of alterations were introduced in the Compulsory Medical Insurance Rules*. These alterations are designed to make more complete and precise some of the provisions adopted in February 2011 as part of the law on CMI.

These provisions refer, firstly, to the composition of the regional boards responsible for decision-making and formation of the tariff for the services rendered by medical institutions. In accordance with the newly introduced alterations, from now on the regional boards may incorporate representatives of medical organizations, including not only those of state institutions but also those of private companies. Secondly, the procedure for and the form of payment for medical aid by medical insurance organizations and territorial CMI funds have also been altered. The payments are now divided in two stages: advance payments and payments for services actually rendered; besides, bonuses for medical insurance organizations and medical institutions are envisaged.

That order is by no means the first document introducing alterations (or additions) in the CMI Rules. In fact, from March 2011, in the framework of the new CMI Rules, any insured Russian citizen may make his or her own choice of a medical insurance company and/or an outpatient hospital for the routine provision of medical attendance and treatment. Any medical institution participating in the government CMI program, in any region across Russia may, in accordance with the newly adopted law, make its medical services available to any insured Russian citizen irrespective of the actual place of his or her permanent residence and residence registration.

Alongside the new rules, a new single form of a CMI policy was introduced for all the RF subjects.

The alterations adopted in the framework of the law’s previous wording may be arbitrarily called ‘a step to meet the needs of the consumer of medical services’, because they are designed to expand a consumer’s freedom of choice. However, for that freedom of choice to actually come in existence, without being a priori limited by an established list of state (or municipal) medical institutions, some further transformations in the financing and decision-making system have been necessary. It was precisely these alterations that were incorporated in the wording approved in September, and they can be described as ‘a step to meet the needs of medical institutions and trade unions’.

As a result of the changes introduced in the CMI system by the September document, one may look forward to the following advantages alongside some potential risks.

One systemic advantage will be an optimization of financial flows within the health care system and a reduction in the volume of unsubstantiated costs
The newly adopted alterations may in the future play a positive role in the mechanism for financing the health care system as a whole because, ideally, a better-balanced composition of the boards with participation of representatives of the executive authorities, insurance companies and the institutions providing the population with primary outpatient care may produce better-balanced funding that will satisfy the principle ‘money follows the patient’. Thus, in perspective, one may expect redistribution of financial resources in favor of those medical institutions that will be providing the population with an adequate volume of services of better quality. This trend has already become manifest in a number of RF subjects, with some real results (for example, the health care model implemented in Perm). Besides, it will be conducive to removing the barriers that prevent private medical companies from entering the CMI market.

The advantages enjoyed by private organizations will be increased transparency of decision-making and fewer barriers preventing their entry on the market
Prior to October 2011, there existed some objective barriers that limited the entry on the CMI market of private medical organizations. First of all, the tariffs based on medical and economic standards developed on the basis of state institutions’ ‘existing clinical practice’ were not feasible for private clinics. Private clinics had also expressed their desire to participate, on equal terms, in discussing and determining the tariffs for services to be rendered in the framework of the CMI program. However, the composition of the tariff boards had not then envisaged the participation of representatives of private clinics.

In this connection, the right to render hi-tech medical services under CMI programs was at the time enjoyed only by state medical institutions, which also restricted the participation of private clinics in the CMI system.

The possibility of participation of private medical organizations in regional CMI boards, including the setting of the tariffs for medical services, may significantly alter their situation and, in perspective, be conducive to their broader representation on the CMI market.

The order also offers a detailed list of medical organizations’ expenditure items that can be covered in accordance with coordinated tariffs within the CMI system. From now on it will include, for example, the cost of necessary resources; the implementation and development of new state-of-the-art medical technologies; availability, on a territorial level, of some types of medical care. Besides, this may also increase the attractiveness, for private medical organizations, of their entry on the CMI market.

The primary tier: a rise in transaction costs
Optimization of the decision-making process and a more complex procedure of payment for medical care that envisages bonuses may, in its turn, make more complex the decision-making procedure, increase working time and documentation turnover for the primary tier (outpatient hospitals) and insurance companies. The two-stage financing procedure, given the expanded list of expenditure items, on the one hand, will become more transparent and better rationalized, while on the other, it will create a pretext for the unsubstantiated rises in working time resulting from the growth of paperwork performed by medical personnel, as well as for an increase in the time needed for coordination of decisions by boards.

A.V. Ramonov – Researcher, Budget Federalism Department

*Order of the Ministry of Health Care and Social Development of the Russian Federation, of 9 September 2011, No 1036n “On the Introduction of Alterations in the Compulsory Medical Insurance Rules Approved by Order of the Ministry of Health Care and Social Development of the Russian Federation, of 28 February 2011, No 158n ‘On the Approval of the Compulsory Medical Insurance Rules’”.