Bundeskartellamt safeguards innovation with regard to software for the classification and invoicing of hospital services

The Bundeskartellamt successfully assisted the Institute for the Hospital Remuneration System (Institut für das Entgeltsystem im Krankenhaus, InEK) in ensuring that its conditions for licensing an algorithm required for the development of software for identifying and invoicing hospital services complied with competition law. The solution that was found ensures equal conditions for incumbents and new suppliers and promotes competition for innovative software solutions.

Andreas Mundt, President of the Bundeskartellamt: “When drafting the licensing conditions we focused on ensuring that there will be no unjustified discrimination between different software suppliers and that the market will be kept open, in particular for innovative newcomers. Our assistance made it possible to find a practicable solution which does not establish any unnecessary barriers to market entry, but also takes into account the InEK’s concerns.”

The German health insurance funds pay for hospital services on the basis of a case-based fixed sum system. The hospitals and health insurance funds use a special software to identify and invoice cases correctly. This software is based on an algorithm which automatically classifies case-specific data and sorts them into the relevant group. A license by InEK is required in order to be able to use the algorithm. Furthermore, if the software is to be used for invoicing purposes, it must also be certified by InEK.

Over time, both hospitals and health insurance funds had felt the need for innovative functionalities which would not only support the actual invoicing process but also the identification and documentation of cases in a way that optimises revenues, and an efficient retrospective review of the case-specific fixed sums paid. While the incumbents increasingly added such functionalities to their software, InEK refused to license the algorithm to suppliers which intended to use it mainly to develop such new functionalities. New entrants, in particular, were thus put at a disadvantage.

The proceeding was triggered by a number of complaints made by software manufacturers which had initially not been granted a license by InEK. After a compromise had been found, the proceeding was discontinued.