Medical Insurance Payment by Disease Category Grouping Scheme Version 3.0 Expected to be Released in July

Our medical insurance payment reform will undergo further upgrades. The DRG/DIP 3.0 version grouping plan is expected to be announced in July and implemented nationwide as early as January 2027.

On March 19, the National Healthcare Security Administration held an event to introduce the adjustments to the 3.0 version of the diagnosis-related group (DRG) and disease-based payment (DIP) grouping plans. A First Financial reporter learned from the event that in July 2025, the National Healthcare Security Administration launched the revision of the DRG/DIP 3.0 grouping plan, which has now completed the clinical validation results for the first phase of version 3.0.

Huang Xinyu, Director of the Medical Management Department of the National Healthcare Security Administration, stated that the adjustments focus on factors such as age and comorbidities that are heavily influenced by clinical opinions. The plan aims to improve grouping rules for age subdivisions, unilateral/bilateral/multi-site surgeries, obstetrics grouping, radiotherapy and chemotherapy for malignant tumors, and combined surgeries. The core groups and subdivisions of DRG are mainly being adjusted, while the core disease database of DIP is also being refined. Additionally, the plan considers the future integration of DRG and DIP, ensuring coordination on related technical foundations.

The government work report this year proposed deepening the reform of healthcare payment methods. According to the Interim Measures for the Management of Payment by Disease Group, the national plan establishes a dynamic adjustment mechanism for disease grouping plans, generally updating the grouping every two years, with the results published by the end of July each year.

In July 2024, the National Healthcare Security Administration issued version 2.0 of the disease-based payment grouping plan, which adjusted and optimized the 1.0 version released in 2020. Following the two-year adjustment cycle, this year is the year for revising the disease grouping plan, with the updated plan expected to be officially implemented in January 2027.

Basis and Content of the 3.0 Version Adjustment

Since 2019, China has initiated pilot reforms of payment methods based on DRG and DIP valuation, achieving near-complete coverage across pilot regions, eligible medical institutions, inpatient diagnoses, and fund expenditures.

In July 2025, the National Healthcare Security Administration simultaneously launched the revision of the 3.0 version of the disease-based payment grouping plan. After eight months, the collection of opinions and the first phase of clinical validation were largely completed. The next step involves a second phase of clinical validation, combined with data verification, to develop the 3.0 grouping plan, which is expected to be publicly released around July this year and officially implemented in January 2027.

Huang Xinyu explained that the adjustment of the grouping plan is based on four factors: recent real-world data from healthcare settlements, extensive feedback from various stakeholders, developments in medical technology, and healthcare policy and management requirements.

Regarding data, the national unified healthcare information platform collected settlement data from 2022 to the first half of 2025, forming a database with approximately one billion case records.

From mid-July to the end of November last year, the National Healthcare Security Administration gathered opinions through multiple channels, collecting about 35,000 suggestions, with around 30,000 deemed valid. Most feedback focused on adjusting grouping rules, updating disease diagnosis codes, and surgical operation codes.

In terms of DRG, clinical validation was conducted in late January 2026 across 30 specialties, including orthopedics, neurosurgery, cardiovascular surgery, and oncology. For DIP, in March 2026, clinical validation was carried out across 25 specialties, marking the first large-scale clinical validation for DIP grouping adjustments since its implementation.

Huang emphasized that the payment method plays a crucial role in guiding the development of different hospitals, specialties, and departments, and the National Healthcare Security Administration attaches great importance to procedural rigor and standardization in the grouping plan adjustments, especially in collecting opinions, data, and conducting clinical validation.

“Every piece of feedback collected has been carefully discussed by experts, every data point reflects the true medical services provided by institutions, and every disease case in the validation process embodies rigorous scientific professionalism,” Huang said.

Stronger departmental collaboration is a key feature of this 3.0 version grouping adjustment. While the healthcare security department is the main driver of payment reform, the final implementation occurs at the clinical frontline within medical institutions. The National Healthcare Security Administration has established smooth cooperation mechanisms with the National Health Commission, the National Center for Disease Control, and other departments to ensure that the 3.0 plan aligns closely with clinical realities and maximizes the role of healthcare payment in respecting, serving, and guiding clinical practice.

Gan Ge, Director of the Hospital Management Research Institute of the National Health Commission, stated that the clinical experts involved in the validation are highly authoritative, with strong professional backgrounds, familiarity with healthcare policies and clinical practice, and represent diverse regions and institution types across the country. This ensures high-quality validation.

He believes that adjusting the payment grouping plan is an important task in implementing the reform of the national healthcare insurance system and a critical bridge connecting healthcare policies with clinical practice. The adjustment is not only a technical issue but also relates to the burden on the public, the sustainability of funds, and the long-term development of medical institutions.

First Phase of Clinical Validation Focus

Yan Bing, head of the DRG technical guidance team, stated that the upgrade of the 3.0 version grouping plan is not a simple patch of version 2.0 but a systematic optimization that responds to clinical development, technological progress, and public expectations.

By the end of November 2025, over 20,000 opinions had been collected through various channels. The DRG technical guidance team summarized, screened, and analyzed these opinions, resulting in about 17,000 valid suggestions covering 124 core groups, nearly all clinical specialties, mainly focusing on tumors, critical illnesses, unilateral/bilateral surgeries, obstetrics and gynecology, pediatrics, geriatrics, rehabilitation, pain management, and new technologies.

Yan noted that the overall results of the first round of clinical validation show broad consensus, indicating that the prior work on opinion collection and data preparation was solid and effective, and that the direction of the 3.0 plan adjustment aligns closely with clinical needs.

For example, in oncology, suggestions during the opinion collection phase called for combining chemotherapy with other treatments. After expert review, this was approved for inclusion. In rehabilitation, experts agreed to add a rehabilitation ADRG group (core group) for four major disease categories: neurological, respiratory, circulatory, and musculoskeletal systems, reflecting the important role of rehabilitation in modern healthcare. The DIP 3.0 grouping plan received about 12,000 suggestions from society, mainly aimed at optimizing grouping logic for certain diseases and updating diagnosis and operation codes.

Based on expert discussions and local practice experience, the DIP 3.0 grouping rules are expected to be optimized as follows: maintaining the original basic rules, integrating DIP and DRG development, streamlining grouping processes, and refining grouping rules, including “merging, subdividing, and auxiliary” for diagnoses and procedures to improve clinical applicability.

During the event, clinical experts from infectious diseases, thoracic surgery, ophthalmology, neonatology, and orthopedics shared their validation and feedback experiences.

Orthopedics expert Wu Xinbao, Vice President of Beijing Jishuitan Hospital, stated that the DRG orthopedics validation focused on technical difficulty, resource consumption, and clinical practice, optimizing the structure of orthopedic ADRGs and clarifying inclusion logic, thereby improving the scientificity, standardization, and applicability of grouping.

A hot topic in orthopedic validation was bilateral joint replacement, especially whether bilateral procedures should be grouped separately.

Historically, many elderly patients with bilateral knee problems could only undergo staged surgeries due to high surgical trauma and costs, with long recovery times between procedures. Now, conditions have changed: patients are generally healthier and can tolerate simultaneous bilateral surgeries; also, national procurement has significantly reduced joint prosthesis costs, leading to more patients opting for one hospitalization to replace both knees at once.

Experts agreed that bilateral multi-site joint replacements should be separated from the original joint replacement group. This change aligns with clinical needs and better supports more efficient recovery treatments.

“Once the revised DRG/DIP 3.0 orthopedics grouping plan is implemented, it will more accurately reflect the value of orthopedic diagnosis and treatment, effectively motivate medical institutions to improve service quality and technical standards, and ultimately benefit orthopedic patients and their families,” Wu said.

Huang Xinyu added that the National Healthcare Security Administration will organize the second phase of clinical validation based on work arrangements, combining data verification to develop the 3.0 plan, which will be released following procedures to continuously improve China’s healthcare payment policy system.