Healthcare and Life Sciences
COVID-19: Protection of hospitals, SHI-accredited physicians
and rehab facilities
In a special session on 27 March 2020, the Federal Council (Bundesrat) adopted the “COVID-19 Hospital Relief Act” (COVID-19-Krankenhausentlastungsgesetz) which entered into force one day later. The Act regulates relief measures for hospitals, rehabilitation facilities and SHI-accredited healthcare providers which will supplement the general measures for the protection of companies. Contrary to what at first sight would appear to be a particularly high demand for services in the healthcare sector during the crisis, hospitals, rehabilitation facilities and SHI-accredited physicians (Vertragsärzte) are currently frequently experiencing considerable drops in their turnover. This is due for one thing to the cancellation and postponement of plannable operations in hospitals so as to keep capacities free for the “wave” of COVID-19 infection treatments and in particular to build up additional intensive care capacities very quickly. For another thing, due to the current measures to avoid social contact and the fear of infection, patients are avoiding visits to healthcare facilities. The Act is meant to cushion the financial consequences.
The liquidity of the hospitals is to be safeguarded by the following measures:
- Lump sum payment for reduction of admissions per “lacking” patient
- Supplementary payment of EUR 50 per patient to cover additional costs
- Bonus of EUR 50,000 for every additional intensive care bed that hospitals put in place
- Suspension of the fixed cost degression deduction for the agreement on the 2020 income budget (Erlösbudget 2020)
- Reduction of the payment period of the social health insurance funds (Krankenkassen) for invoices issued by the hospitals to five days
- Simplification of the auditing of the invoices by reducing the audit rate
- Increase of the provisional nursing fee to EUR 185
1. Compensation for decreased admissions by lump sum payments
The reduction in income is in particular to be cushioned by lump sum payments which are financed from the liquidity reserve of the Health Fund (Gesundheitsfond). The amount of the lump sum payment is calculated by determining the difference between the number of patients currently being treated per day and the average number of patients that were treated per day in the previous year. The amount of this difference is then multiplied by a lump sum of EUR 560. In order to expedite the disbursement, the federal state authority (Landesbehörde) can apply for payments on account from the Federal Authority for Social Security (Bundesamt für Soziale Sicherung). The precise billing procedure is determined by the Central Federal Association of the Health Insurance Funds (GKV-Spitzenverband Bund der Krankenkassen), the German Association of Private Health Insurers (Verband der privaten Krankenversicherung) and the German Hospital Association (Deutsche Krankenhausgesellschaft) as contracting parties or, if they do not come to an agreement, then by the arbitration board acting as a substitute pursuant to section 18a(6) Hospital Financing Act.
2. Financial aid for replenishing the treatment capacities and the nursing staff
Hospitals which – with the permission of the hospital planning authority – put additional intensive medical treatment capacities with ventilation capabilities in place by setting up additional beds or incorporate them from other stations will receive a one-time bonus of EUR 50,000 for each intensive bed they set up or keep free in the period from 1 April 2020 to 30 September 2020. This will likewise be financed from the liquidity reserve of the Health Fund.
Additional costs of the hospital – e.g. for face marks, protective gear or disinfectants – will be remunerated by a lump sum payment of EUR 50 per patient who is admitted in the period from 1 April 2020 to 30 June 2020.
Raising the provisional nursing fee by around EUR 38 to EUR 185 per day as of 1 April 2020 is supposed to give hospitals financial leeway in scheduling their nursing staff so that they will be able to meet the increased need for nursing. Should the provisional nursing fee exceed the actual nursing staff costs of the hospital, the excessive amount will remain with the hospital. On the other hand, if the provisional nursing fee is not sufficient to cover the actual nursing staff costs, the excessive nursing costs will be completely assumed by the social health insurance funds
3. Hospital invoices: reduced payment periods and fewer audits
The reduction of the payment period for the social health insurance funds to five days after receipt of the invoice is meant to secure liquidity of hospitals. Additionally, the hospitals are to be largely protected from expensive and time-consuming billing audits and the compilation of necessary documents for the Medical Service of the Health Insurance Funds (Medizinischer Dienst der Krankenkassen). For this reason, the maximum permissible review rate of 12.5 % of the invoices received per quarter has been lowered to 5 %. Billing audits that have already been commissioned which exceed the reduced review rate must be cancelled by the social health insurance funds.
1. Compensation payments in case of low bed occupancy
Preventive health care and rehabilitation facilities with a service agreement will receive a compensation payment for loss of revenues since 16 March 2020 due to low bed occupancy rates pursuant to section 111d German Social Security Code, Book V (SGB V) new version. The amount of the payment will be calculated by comparing the number of inpatients per day as of 16 March 2020 with the average number of inpatients per day in 2019. The difference thus calculated will be offset by a lump sum payment per case, currently up to 30 September 2020 at the latest. This amounts to 60 % of the average remuneration rates that were agreed upon with the social health insurance funds.
These calculations will be carried out by the federal state authority responsible for the hospital planning or a social health insurance fund designated by one of these federal state authorities, which will also make the payments which are to be rendered. The verification procedure will be regulated by an agreement between the Central Federal Association of the Health Insurance Funds (GKV-Spitzenverband) and the relevant associations of the preventive health care and rehabilitation facilities. Should the facility receive compensation payments from a different body, the offsetting payments pursuant to section 111d German Social Security Code, Book V, new version, will need to be repaid.
2. Temporary accreditation as hospital
Additionally, preventive health care and rehabilitation facilities can be designated by the federal states as acute inpatient treatment facilities, and to this extent they will be deemed to be accredited hospitals within the meaning of German Social Security Code, Book V (section 22 Hospital Fees Act , new version) up to 30 September 2020. They will then be remunerated with lump sum payments.
SHI-accredited healthcare providers
The COVID-19 Hospital Relief Act also provides for an adjustment of the standards according to which the remuneration is allocated to the SHI-accredited physicians in order to offset any revenue shortfalls they experience. Along with the costs incurred thereby, the social health insurance funds will also assume those costs which the Regional Associations of SHI-Accredited Physicians (Kassenärztliche Vereinigungen) incur by carrying out so-called “extraordinary measures”. The legislature designates additional expenses incurred thereby as not yet quantifiable.
1. Compensation payments for decreases in revenue within the discretion of the Regional Association of SHI-Accredited Physicians
If the total fee of the SHI-authorised service provider decreases by more than 10 % compared with the quarter in the previous year (corresponding to an average of EUR 5,600 in the quarter) and if the reason for this is a reduction in the number of cases as the result of a pandemic, epidemic, endemic, natural disaster or another major damage event, the competent Regional Association of SHI-Accredited Physicians can render a compensation payment to the SHI-accredited physician. However, such payments are limited to extra-budgetary services. Moreover, other compensation claims, e.g. under the Infection Protection Act (Infektionsschutzgesetz), will be taken into account. If compensation payments are made, they must be reimbursed by the social health insurance funds.
2. Duty to safeguard the existence of SHI-accredited physicians
If the continuation of the medical practice is jeopardised due to the reduction in cases, the Regional Association of SHI-Accredited Physicians competent for the SHI-accredited physician (in consultation with the federal state associations of the substitute health insurance funds and the social health insurance funds) will be obliged to secure the SHI-accredited physician’s work by suitable regulations in the allocation standard. These regulations are not defined in more detail by the law.
3. Financing of so-called extraordinary measures to maintain the SHI-accredited physician services
The social health insurance funds must reimburse the Regional Associations of SHI-Accredited Physicians for the additional costs of such extraordinary measures. These are measures which are necessary to secure the SHI-accredited physician services for the duration of the epidemic situation pursuant to section 5(1) Infection Protection Act – for example, the establishment of special centres to separate patients with respiratory problems from the rest of the patient clientele, the establishment of services to render additional visitations or the expansion of the appointment service points due to the increased utilisation of the service number 116117.