The new DRG is a mixed payment method in which the NHIS pays for medical expenses incurred during a single medical treatment, dividing the cost of procedures, drugs, and therapeutic materials into all-inclusive and non-inclusive fees.
Most medical services are comprehensively bundled together, but high-value services that cause differences in medical expenses are paid independently. In this report, we have selected the most important aspects of this new system in regard to therapeutic materials.
The new DRG is the third type of payment model that has been introduced within the NHIS pricing structure. First, fee-for-service was introduced, then DRG, and finally the new DRG. Currently, these three payment models coexist and they are applied depending on the type of healthcare facilities and disease groups.
Fee-for-service is a system that divides the various services provided in the course of a single medical or surgical procedure into separate, predetermined amounts (e.g., anesthesia, surgical procedure, materials, medications, hospitalization, etc. used in a single surgery are paid separately).
The DRG system pays for the entire cost of a single surgery in one predetermined amount (e.g., one overall fee for a single surgery). Prior to the introduction of the new DRG, the NHIS was divided into two categories: those that were paid on a fee-for-service basis and those that were paid on a DRG basis under a single diagnosis.

Abbreviations and Acronyms
Disclaimer
Preface
Executive Summary
1 Payment Systems of National Health Insurance Service
1.1 FFS (Fee-For-Service)
1.2 DRG (Diagnosis Related Group)
1.3 Fixed Pricing
1.4 New DRG (Diagnosis Related Group)
1.5 DRG vs. New DRG
2 Background on Introduction of New DRG
2.1 New DRG Expansion History
2.2 Medical Billing Formula for New DRG
3 New DRG Management
3.1 New DRG Applications
3.2 New DRG Classification Criteria
3.3 Inclusive & Non-Inclusive Products of New DRG
3.4 Issues with New DRG Criteria Change
4 Actual Cases of New DRG Inclusive Product Changes
4.1 Anti-Adhesion Products
4.2 Disposable Shears (Electric/Ultrasonic)
4.3 Circular Staplers
4.4 Intraocular Lens

Appendix 1 History of NHIS Payment System
Appendix 2 Categorizing New Reimbursement Items as Non-Inclusive or Fully Non-Inclusive Exceptions

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