To reflect differences in admitted severity mix and supplied quality of care, BNHI pays better accredited hospitals higher rates for the same service.
The practice--paying better accredited hospitals higher rates for the same service--was first used by the Bureau for Labor Insurance where hospitals were categorized into three levels: A, B, and C; BNHI subsequently adopts this practice in designing the reimbursement scheme of NHI.
In 2002, during a formal investigation by Control Yuan, BNHI claims this payment scheme not only can adjust for the severity mix of patients among hospitals, but also offers an incentive for hospitals to improve their service quality (becoming a better accredited one).
In 2002, the Control Yuan started a formal investigation and advised BNHI to consider adjusting the scheme to meet the standard of "equal job, equal pay.
In a DRG system, the BNHI will set a fixed payment level for each disease requiring in-hospital care.
The BNHI has stated that the DRG system will not apply to treatments for AIDS, rare diseases, cancer, hemophilia and mental illnesses.
The BNHI also has proposed other policies to address its financial problems, including increasing NHI premiums.