Ways to Break Away from the Previous Year's Pay Structure During Compensation Negotiations Room to maneuver despite new restrictions?
For the years 2027 through 2029, the applicable rate of change in the base wage total will also be reduced by one percentage point each year. For example, if the rate of change is 3%, a 2% increase in the reimbursement rate would be the upper limit.
This cap does not apply only to individual care sectors. It covers numerous service providers, including, in particular, rehabilitation facilities, outpatient care services, providers of in-home nursing care, and providers of non-hospital intensive care.
However, the new regulations apply only to fee increases—that is, when linked to an existing fee rate.
Against this backdrop, the question of whether—and under what conditions—it remains possible to deviate from the previous year’s rate becomes particularly significant.
Case Law of the Federal Social Court
The Federal Social Court (BSG) clarified as early as 2015 that the link to the previous year’s rate does not constitute an absolute barrier to a remuneration increase beyond that rate.
In the BSG’s view, the decisive factor is whether changes have occurred that justify an increase in the previously agreed-upon remuneration beyond the adjustment rate specified in Section 71(3) of the German Social Code, Book V (SGB V). A prerequisite is that, without the additional remuneration, the facility’s ability to provide care would be jeopardized.
The BSG specifically cites the following categories of cases:
An increase in collectively bargained wages exceeding the average rate of change,
necessary changes to staffing ratios or the proportion of specialized staff,
unforeseeable changes in the composition of the patient population,
incorrect or deliberately underestimated calculations from previous years.
However, the service provider bears a special burden of proof and justification in this regard. It must provide a clear and comprehensible explanation of why exceeding the general limitation mechanisms is necessary.
The question is, which lines of argumentation will remain valid in the future?
Cost Increases Due to Collective Bargaining Agreements
The new statutory regulation addresses the possibility of claiming higher personnel costs due to collective bargaining developments. This renders the previous option to deviate from the prior-year benchmark obsolete.
For institutions or companies bound by collective bargaining agreements, pay increases above the average rate of change should not be rejected as uneconomical. In this context, 50% of the difference between the pay increase agreed upon in the collective bargaining agreement and the average rate of change is eligible for reimbursement. However, the provision is temporary and is to be evaluated after two years.
In particular, the treatment of institutions that align their compensation with collective bargaining agreements remains unclear. Although many service providers are not directly bound by collective bargaining agreements, they base their compensation on such agreements or are contractually obligated to pay corresponding rates. Whether these situations are covered by the regulation or whether a corresponding application is possible will depend largely on the future negotiation practices of the payers.
One thing is clear, however: facilities that are not bound by collective bargaining agreements and do not base their compensation on such agreements will continue to have to operate more strictly within the limits of the GLS.
Changes to the Staffing Ratio or the Ratio of Qualified Personnel
The case explicitly mentioned by the Federal Social Court (BSG)—a necessary change to the staffing ratio or the ratio of qualified staff—could take on particular significance in the future.
This applies in particular to the rehabilitation sector. As the requirements for rehabilitation facilities continue to evolve through the RE-REHA guidelines and their implementation in the care contracts, binding staffing requirements are being established.
This could justify a departure from the previous year’s cost basis.
In the field of rehabilitation in particular, it could be argued that a new baseline cost calculation is first required, and only then can the traditional cost-increase negotiations take place on this basis.
This line of reasoning would be of considerable significance: According to the wording of the law, the cap imposed by the GLS—or the reduced GLS under the Contribution Rate Stabilization Act—generally applies to cost-increase negotiations. An initial recalculation based on changed structural requirements would not be covered by this provision.
Special consideration must also be given in the negotiations to Section 5(4), sentence 2, of the RE-REHA, according to which personnel and structural changes resulting from the new care contracts must be brought up by the negotiating parties in the reimbursement negotiations. Therefore, a (substantial) increase in reimbursement must be negotiated in connection with the transition to the new RE-REHA-compliant care contracts.
It is recommended that service providers in the field of rehabilitation pursue this strategy and, if necessary, enforce it through arbitration proceedings.
Change in the Patient Population
The change in the composition of the patient population, also mentioned by the BSG, is likely to have only limited significance in practice.
It will generally be difficult to demonstrate a relevant change. A verifiable trend leading to a significant increase in average care costs per case would be required.
This could be the case, for example, with a significant increase in particularly complex or cost-intensive care needs.
Erroneous Calculations in Previous Years
According to BSG case law, the correction of an incorrect calculation may also allow for a departure from the prior-year benchmark.
However, this requires a verifiable demonstration that the previous reimbursement rates were, in fact, insufficient. A mere assertion of insufficient reimbursement is unlikely to suffice. Therefore, providing evidence remains problematic.
A detailed presentation is likely required to demonstrate that the previous compensation was consistently insufficient to cover costs and that this is not merely a retrospective reassessment of economic developments.
The increasing limitation of compensation increases through their linkage to the base wage bill does not mean the end of successful compensation negotiations. However, the line of argumentation will have to change.
In the future, it will no longer be sufficient to simply point to general cost increases. Rather, it will be crucial to highlight specific structural changes in the healthcare landscape.
The case law of the Federal Social Court (BSG) continues to offer starting points for this. In particular, necessary changes in staffing requirements and new healthcare delivery structures can serve as starting points for breaking away from the previous year’s benchmark. However, it is currently unclear from a legal standpoint whether the current reforms undermine the BSG’s case law regarding exceeding the total wage bill.
For service providers, it will therefore be crucial not only to document cost trends but also to present changes in healthcare conditions and their effects on the cost structure in a transparent manner at an early stage.
Dr. Inci Demir
Dr. Christoph Renz