Gov-Industry dispute over non-covered care intensifies

Medical community files constitutional challenge over limits on manual therapy pricing and treatment frequency

Ruling party lawmakers, “Need to manage shift toward non-covered services at the expense of essential care”

Tensions between the government and the medical community are escalating over tightened regulation of non-covered medical services, including the introduction of the managed reimbursement system.

Although disputes over physicians' autonomy in providing non-covered services have persisted for years, the latest flashpoint is the government's decision to bring manual therapy under the managed reimbursement framework.

The medical community plans to challenge the system's constitutionality, arguing that it unlawfully infringes on physicians' professional autonomy and patients' rights. The government, meanwhile, maintains that stronger oversight is necessary to curb unnecessary and excessive medical care while reinforcing regional, essential, and public healthcare services, suggesting that the conflict is likely to deepen.

In particular, as the ruling Democratic Party of Korea is emphasizing the need to manage medical institutions that focus solely on non-covered treatments rather than essential or covered medical services, attention is turning to the legislative direction of the government and the National Assembly.

On Aug. 3, the Seoul Medical Association plans to file a constitutional petition with the Constitutional Court challenging the managed reimbursement system.

According to the medical community, reclassifying manual therapy under managed reimbursement effectively allows the government to regulate both the price of non-covered services and the number of treatments patients may receive, thereby infringing upon physicians' clinical autonomy as well as patients' right to receive appropriate medical care.

The medical community argues that the policy creates an environment in which physicians cannot provide, and patients cannot receive, what they consider the most appropriate treatment.

The competent ministry, the Ministry of Health and Welfare, however, contends that managed reimbursement is intended to reduce unnecessary use of non-covered services and excessive price variations, thereby easing patients' financial burden while improving the sustainability of the National Health Insurance system.

The latest escalation in tensions was fueled by media reports indicating that, alongside the introduction of managed reimbursement, the government is considering targeted regulation of medical institutions that provide only non-covered services, such as cosmetic and dermatology clinics.

The report, which suggested that the ministry was considering measures including special legislation on the management of non-covered care to regulate healthcare providers that generate revenue exclusively from non-covered services without providing any reimbursed care, elicited robust opposition from medical professionals asserting that state intervention in clinical practice constituted an overreach.

The ministry later issued a statement rejecting those reports, saying it had never considered making reimbursed services legally mandatory or imposing penalties on medical institutions that provide only non-covered care.

Rather, it reaffirmed that previously announced policies, including the managed reimbursement system, will be implemented as planned to strengthen oversight of unnecessary non-covered services.

What is noteworthy is that some lawmakers from the Democratic Party of Korea have also expressed concern over the growing concentration of medical institutions on non-covered care.

Rep. Jin-sook Jeon and Rep. Young-seok Seo, both members of the National Assembly's Health and Welfare Committee, cited data showing medical institutions that do not submit any National Health Insurance claims and emphasized the need for legislative and policy measures to address the worsening outflow of healthcare professionals from essential care and the increasing concentration of providers in non-covered fields such as dermatology and cosmetic medicine. 

As a result, industry observers believe the National Assembly could eventually pursue special legislation aimed at regulating excessive reliance on non-covered medical services among frontline healthcare providers.

Rep. Jeon said, "Although a significant amount of newly established clinics operated by general practitioners are registered as dermatology clinics, many have no National Health Insurance claims related to the treatment of skin diseases. The government must go beyond simply increasing the number of physicians and instead address the concentration of healthcare professionals in specific practice areas. It should establish reimbursement systems and institutional incentives that encourage physicians to choose public, regional, and essential healthcare.

Rep. Seo said, "There are inherent limitations in understanding clinical practice at medical institutions that do not file National Health Insurance claims. Given concerns that the number of cosmetic medical clinics operated by general practitioners and focused primarily on non-covered services continues to increase, there is a need to assess the current situation and consider appropriate management measures."

An official from the Health and Welfare Committee commented, "Debate over physicians' autonomy in providing non-covered medical services has long been a controversial issue. Differences exist not only between the ruling and opposition parties but also among individual lawmakers. Since strengthening essential healthcare remains a key policy priority of the current administration, opinions within the committee also differ considerably regarding the direction of future policy and legislation. It will therefore be important to watch whether related bills are introduced and how they proceed through the legislative process."