RSA Collateral calculation method under review

The lack of a collateral calculation formula in the refund-type RSA criticized during NHIS audit

“Revision discussions underway…guidelines to be amended if necessary”

The National Health Insurance Service (NHIS) is currently reviewing improvements to the collateral calculation method for the refund-type risk-sharing agreement.

Setting collateral in risk-sharing contracts is a crucial safeguard to secure claims in case refund obligations are not met. While a formula exists for setting the collateral amount, shortcomings were identified in some newly established RSA types, prompting NHIS to review improvements.

According to industry sources on the 9th, this year’s NHIS audit highlighted deficiencies in the collateral calculation method for certain RSA types. The NHIS was advised to establish alternatives that would secure unpaid refund amounts for risk-sharing types lacking a collateral calculation formula.

The NHIS's collateral-related operations are governed by the “Detailed Operational Guidelines for Drug Price Negotiations under Risk-Sharing Agreements.” Article 13 of the guidelines stipulates that the NHIS must receive collateral from companies to ensure the fulfillment of contractual obligations.

Furthermore, the collateral amount is calculated using a separate formula, and the amount can be adjusted based on the type, the expected reimbursement amount, and the level of uncertainty.

The collateral calculation methods are broadly categorized and specified in the guidelines as: ▲Conditional sustained treatment and refund hybrid type ▲Total expenditure cap type ▲Refund type ▲Patient-Unit usage cap type. For example, the Total expenditure cap type sets collateral at expected claim amount × refund rate × 30%.

Within the RSA refund type, ▲the outcome-based reimbursement type is a newly added category for which no standardized calculation method is defined in the guidelines.

According to the NHIS, the type of guarantee calculation formula identified as inadequate during the audit is the ‘outcome-based reimbursement type’. The NHIS stated it is currently under internal discussion and plans to revise the guidelines if necessary.

An NHIS official explained, "The guidelines lack a calculation formula for the outcome-based reimbursement type. Internal discussions are ongoing, and revisions will be made to the guidelines if necessary."

The outcome-based refund type is a contract type in which the applicant refunds a certain percentage of the total claim amount to the NHIS if the treatment effect set for each treated patient is not achieved after tracking and observing the treatment effect over a specified period.

The outcome-based refund type is applied to some ultra-high-priced drugs, including Kymriah and Zolgensma.