Rationale Behind Government Intervention

According to the 2026 Ministerial Work Report of the Ministry of Health and Welfare (National Task No. 86), the government has identified the introduction and operation of a management framework for non-reimbursable services to reduce patient burden as a core policy agenda, with substantive implementation now underway.

Historically, non-reimbursable services have largely operated under market-driven principles, with limited oversight of pricing, clinical standards, or utilization. However, when combined with private indemnity insurance, concerns have increased regarding excessive utilization, repeated overtreatment, and disproportionate insurance payouts. These issues have raised broader policy concerns related to healthcare system distortion, cost escalation, and patient safety.

“Managed Reimbursable”

In response, the government has announced plans to reclassify certain high-risk non-reimbursable services as “Managed Reimbursable.”

Under this framework:

• Patients will remain responsible for 95% of the cost
• Pricing standards and clinical criteria will be formally established
• Government oversight will be strengthened to curb overuse and inappropriate treatment

Services Affected

In 2025, five candidate services were reviewed for managed reimbursable designation. The following three have been selected for conversion:

• Manual therapy
• Percutaneous epidural neuroplasty
• Radiation-based hyperthermia and hyperthermia treatment planning

Other outcomes include:

• Extracorporeal shock wave therapy: to be governed by a self-regulatory framework led by the medical community
• Speech therapy: deferred pending further review of treatment necessity by indication

What Happens Next?

The government plans to revise the notification titled “Standards for the Designation and Implementation of Selective Reimbursable” to establish separate evaluation criteria for managed reimbursable services that will consider factors such as clinical necessity, social value, and the need to alleviate the national healthcare cost burden. 

For services selected as managed reimbursable, pricing and coverage criteria will be reviewed, followed by evaluation and deliberation by relevant committees, with coverage conversion scheduled for the first half of 2026.

Selection decisions will be based on:

• Mandatory non-reimbursable services reporting (conducted twice annually)
• Detailed surveys of sampled medical institutions
• Ongoing monitoring of utilization, pricing, growth rates, and expenditure trends

These data will be reviewed through a multi-stakeholder consultative body involving healthcare professionals, patient and consumer groups, and subject-matter experts.

Conclusion

This policy shift should not be viewed simply as a conversion of non-reimbursable services into reimbursables. Rather, it represents a structural change that may significantly affect:

• Business and pricing models
• Market access strategies
• Clinical evidence and value demonstration requirements

Even within the non-reimbursable domain, the ability to clearly demonstrate clinical necessity and social value is expected to become increasingly critical.

MDREX will continue to closely analyze the impact of these policy changes on the medical device industry and market strategies, and to provide our clients with actionable insights. If you have any questions, please feel free to contact us at pro@mdrex.co.kr.

Thank you,

MDREX