Germany Proposes Abolishing Hybrid DRGs and Restructuring Short-Stay Reimbursement from 2028

On 8 October 2026, the National Association of Statutory Health Insurance Physicians (KBV) reported that Germany's governing coalition parties, the Christian Democratic Union/Christian Social Union (CDU/CSU) and the Social Democratic Party (SPD), had initiated amendments to the Statutory Health Insurance Contribution Rate Stabilisation Act.

The proposed amendments would significantly restructure reimbursement for short-stay hospital care and outpatient procedures, including the abolition of the existing Hybrid Diagnosis-Related Group (Hybrid DRG) payment mechanism from 1 January 2028.

The proposal introduces two distinct reimbursement arrangements:

• Short-stay hospital cases: Hybrid DRGs would be replaced by short-stay case-based flat rates (Kurzzeitfallpauschalen), covering inpatient cases with a length of stay of up to three days and a maximum of two overnight stays.
• Procedures without an overnight stay: Services currently reimbursed through Hybrid DRGs that do not require an overnight stay would transition to reimbursement under the Uniform Value Scale (Einheitlicher Bewertungsmaßstab, EBM) from 2027, rather than continuing under the Hybrid DRG flat-rate mechanism.

The proposed changes would therefore introduce different reimbursement arrangements depending on whether a procedure requires an overnight hospital stay.

The legislative process remains ongoing. The amendments are expected to be adopted alongside the proposed emergency care reform legislation. The bill must first be approved by the German Federal Parliament (Bundestag) before proceeding to the Federal Council (Bundesrat), which represents the federal states.

The legislation is currently scheduled to enter into force on 1 January 2027, with the abolition of Hybrid DRGs proposed for 1 January 2028.

What does it mean for the industry?

Hybrid DRGs have had varying implications for medical device manufacturers, depending on the type of technology (e.g., implants versus invasive non-implantable devices), device costs and other reimbursement-related factors.

If adopted, the proposed reform would require manufacturers to reassess reimbursement opportunities and adapt their market access strategies for outpatient and short-stay inpatient procedures. For innovative technologies previously disadvantaged by the Hybrid DRG framework, the reform may create new opportunities, although the actual impact will depend on the structure and payment levels of the replacement mechanisms. Manufacturers should evaluate the implications for their specific technologies and procedures once the new reimbursement arrangements are defined and introduced.

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