Another region tightens medical insurance designated provider qualifications, and the "shrinking volume era" has fully arrived!

Hangzhou, Zhejiang; Liupanshui, Guizhou; Suzhou, Anhui; Qingdao, Shandong; Weihai, Shandong; Nanping, Fujian…… A nationwide tightening wave for medical insurance designated-entity eligibility is underway. From now on, it will be difficult to apply for medical insurance designated-entity status!

Source: Zhen Su Jie

Edited by: Bei Xuan

Cover source: pixabay

On March 24, the Hangzhou Municipal Medical Security Administration and Service Center released its 2026 plan for the allocation of medical insurance designated medical and pharmaceutical institutions. The plan makes clear that for outpatient designated medical institutions, only 18 new units will be added annually, and 90 new designated retail pharmacies will be added. For inpatient beds under medical insurance at non–secondary and non-tertiary hospitals, there will be zero新增, and supporting policies such as “best-qualification entry,” “dynamic evaluation,” and “fund-warning constraints” are also introduced.

Looking at the specific data from Hangzhou, medical insurance designated-entity admission has moved beyond the “crude expansion” stage of barbaric, unchecked growth and has entered a new era of refined management characterized by “total quantity control and selecting the best among applicants,” sending a strong signal that designated-entity eligibility is being tightened across the board.

Hangzhou is not an exception—Liupanshui in Guizhou, Suzhou in Anhui, Qingdao in Shandong, Weihai in Shandong, Nanping in Fujian…… A nationwide tightening wave for medical insurance designated-entity eligibility is unfolding.

From now on, it will be difficult to apply for medical insurance designated-entity status!

Tightening of Hangzhou’s medical insurance credentials ends the era of growth in additions

In the designated medical and pharmaceutical institutions allocation plan released by Hangzhou this time, it sets a “total quantity red line” for medical insurance designated entities, clearly conveying the core direction of “strictly controlling incremental additions and selecting the best among applicants.” The tightening trend can be clearly reflected in three major dimensions.

01| Outpatient designated medical institutions: full-area contraction, with marked regional differentiation

For 2026, Hangzhou’s annual increase plan for outpatient designated medical institutions is only 18. Compared with previous years, this represents a significant reduction and also reflects a strict control schedule of “decreasing with each quarter.”

First quarter: 9; second quarter: 6; third quarter: 2; fourth quarter: 1. The quota is progressively tightened, sending a clear message of “strict control over incremental additions and selecting the best among applicants.”

From a regional distribution perspective, the tightening trend shows pronounced differentiation:

• The Qiantang District leads with 5 new slots, the Shangcheng District has 3, Gongshu District, Xihu District, Yuhang District, and Linping District each have 2, and Xiaoshan District and Fuyang each have 1. Only the core urban districts have a small amount of new quota;

• Meanwhile, Binjiang District, Lin’an District, Tonglu County, Chun’an County, and Jiande City directly cancel the new plan and implement “zero-slot” control. This means that outpatient designated medical institutions in these areas have essentially reached saturation, the admission channels for new institutions are basically closed, and existing institutions become the main market players.

02| Designated retail pharmacies: total quantity control, with counties as the main force for expansion

For 2026, the planned number of new designated retail pharmacies in Hangzhou is 90. Although the total is much higher than that for outpatient institutions, it still falls within a strict total-quantity control range.

In terms of quarterly allocation, the pattern also shows a quarter-by-quarter decline: 27 in the first quarter, 24 in the second quarter, 22 in the third quarter, and 17 in the fourth quarter.

In regional distribution, because the main urban districts have reached layout saturation and enforce strict quota control, county-level areas raise entry thresholds in parallel during expansion:

• County-level areas have become the main force for expansion: 23 new slots in Chun’an County, 21 in Jiande City, and 19 in Lin’an District; the combined total for the three counties/cities accounts for more than 68% of the citywide quota.

• By contrast, the main urban districts enforce strict quota control: 5 in Shangcheng District, 4 in Gongshu District, 4 in Linping District, only 1 in Binjiang District, 2 each in Xihu District and Fuyang, and 3 each in Qiantang District, Xiaoshan District, and Yuhang District.

03| Medical insurance inpatient beds: tiered management and resource concentration toward high-quality options

The new policy clarifies that for 2026, only tertiary medical institutions and secondary medical institutions (with rehabilitation hospitals following the secondary institutional planning framework) may add medical insurance inpatient beds. Other tiers of inpatient medical institutions will have zero new bed plans.

This means the expansion channel for medical insurance designated beds at lower-tier inpatient medical institutions has been completely closed. Medical insurance resources will further concentrate on high-quality inpatient medical institutions. In essence, by tightening eligibility, it forces optimization of the allocation of medical resources and eliminates inefficient supply.

In addition, the optimization of entry rules further raises the threshold: pharmaceutical and medical institutions that obtained the relevant qualifications after December 1, 2025 must compete for designated-entity eligibility through an evaluation based on total score. If the total scores are the same, applicants will compete using the bonus items. This completely breaks the “first-come, first-served” extensive approach. For institutions whose quarterly evaluation score exceeds 120 but were not selected due to quota limits, any subsequent application will require re-evaluation, forming dynamic management that is “in or out.”

Overall, whether it is the reduction in added totals, the differentiation in regional entry, or the raising of the entry threshold, all clearly point to one conclusion: Hangzhou’s medical insurance designated-entity credentials are being tightened across the board, and the industry is entering a new stage of competition for existing capacity.

More regions follow suit to tighten, speeding up industry reshuffling

It is worth noting that Hangzhou is not the only city tightening medical insurance designated-entity credentials.

In recent years, the National Healthcare Security Administration has continuously strengthened the management of designated institutions. In June 2025, it issued the “Notice on Further Strengthening the Management of Healthcare Security Designated Medical Institutions,” requiring all localities to establish mechanisms for total-quantity control of designated institutions and to optimize resource allocation.

At present, many places have rolled out related policies: pausing new applications for medical insurance designated entities or strictly controlling incremental totals. Tightening medical insurance designated-entity credentials has become a nationwide trend. Although the specific tightening measures differ across regions, the core direction is highly consistent—focusing on total-quantity control, best-qualification entry, and fund safety.

Starting March 20, 2026, Nanping in Fujian will pause accepting applications for medical insurance designated status for medical institutions, resuming after a resource allocation plan is issued;

Jinan in Shandong has clarified that in 2026 medical insurance designated inpatient beds per 1,000 insured persons will be kept stable at 8.5–9.0 beds, representing a modest contraction from 9.33 at the end of 2024, while also strictly controlling the number of new outpatient and new pharmacy additions;

Weihai in Shandong has clarified that starting April 1, 2026, it will pause accepting applications for new medical insurance designated status. For regions where existing institutions exceed the planned number, no new designated institutions will be added;

Jiuquan in Gansu issued its 2026–2027 plan for the allocation of medical insurance designated resources. It clarifies that it will reduce designated medical institutions from 973 down, and reduce designated retail pharmacies from 609 to 495. It will also lower bed and pharmacy density at the same time to optimize resources;

Tianjin sets a 1,500-meter service radius barrier: within the same area, no new private designated institutions of the same type may be added, and private designated institutions must follow the public-institution price standards, further standardizing market order;

Liupanshui in Guizhou, starting March 11, 2026, will pause accepting applications for designated status from pharmaceutical/medical institutions until the completion of the resource allocation planning work for medical insurance designated medical and pharmaceutical institutions;

In addition, places such as Wenzhou in Zhejiang, Suzhou in Anhui, Hefei, Wuhan, Jingzhou, and Baise in Guangxi have already paused new applications for medical insurance designated status and will resume acceptance once the regional resource allocation plan is released, forming a “plan first, then entry” governance model.

From a nationwide perspective, medical insurance designated-entity management has fully entered a new stage of “total quantity control + best-qualification entry + dynamic adjustment.” The core trends are becoming increasingly clear:

• First, designated-entity credentials have shifted from “easy-to-obtain resources” to “scarce, high-quality certifications.” Entry thresholds continue to rise, and the difficulty for small and mid-sized medical and pharmaceutical institutions to obtain designated status increases significantly;

• Second, industry concentration is rising rapidly. Inefficient and non-compliant small and mid-sized institutions will accelerate clearing-out, while high-quality chain institutions and specialized institutions with distinct strengths will gain more development space through standardized management and professional services;

• Third, regulation is getting stricter. Dynamic evaluations and mechanisms for exiting due to violations are becoming normalized, forcing institutions to stick to the compliance bottom line, improve service quality, and make industry development more standardized and orderly.

What impact will this have on medical institutions

In the past, whether a medical institution could become a medical insurance designated provider largely determined the survival ability of that institution or pharmacy. The full tightening of Hangzhou’s medical insurance designated-entity credentials will create structural, even disruptive, impacts on medical and pharmaceutical institutions.

Outpatient medical institutions: higher entry thresholds, with clear advantages for high-quality institutions

The 18 annual new slots in Hangzhou mean a substantial rise in the entry threshold. Especially in areas with zero new additions, newly established institutions will be almost unable to obtain medical insurance designated status, and market competition will concentrate among existing institutions.

On the one hand, existing outpatient institutions will face stricter dynamic evaluations. Compliance operations and service quality will become the bottom line for survival, and institutions with unstandardized services or insufficient professional capabilities may have their designated status canceled;

On the other hand, the limited new additions in the core urban areas will tilt toward high-quality institutions. Outpatient institutions with distinctive specialty services (such as pediatrics, traditional Chinese medicine, rehabilitation, etc.), good reputations, standardized management, and high acceptance among insured persons will gain more opportunities.

In addition, before the end of the 2026 transition period on December 31, existing institutions established before December 1, 2025 can apply for designated status without being limited by the planned quotas. This window period becomes a key time frame for these institutions to lock in compliant identity.

Inpatient medical institutions: resources concentrate at the top, with pressure on mid/small institutions

In terms of inpatient bed management, only tertiary and secondary hospitals (including rehabilitation) can add medical insurance inpatient beds; inpatient medical institutions of other tiers will have zero new additions.

In effect, this regulation is guiding inpatient medical resources toward higher-tier, more specialty-focused development. Tertiary and secondary hospitals remain the encouraged targets of policy.

However, for the large number of first-tier hospitals and unrated hospitals, the space to expand inpatient beds has effectively been sealed, the dividend from medical insurance patient inflow weakens, and survival pressure increases. These institutions need to focus on optimizing the efficiency of existing bed resource utilization, focusing on specialty diagnostic and treatment areas and avoiding homogeneous competition.

Private medical institutions: faster reshuffling—transformation and breakthroughs are urgent

The impact of tightening medical insurance designated status is most evident for private medical institutions. Taking Hangzhou as an example, more than 400 private dental institutions across the city will need to gradually exit the medical insurance designated-entity scope due to total-quantity control. In other regions across the country, there are also many small and mid-sized private institutions facing rising compliance costs and tightening supervision, and they are proactively applying to “opt out of coverage.”

For private medical institutions, a model that relies solely on medical insurance patient inflow is no longer sustainable; transformation and breakthroughs are an inevitable choice:

On the one hand, they can focus on specialized areas with distinct characteristics—such as aesthetic medicine, health examinations, rehabilitation, and high-end diagnostics and treatment—follow a “outside medical insurance, self-pay” market route, and build differentiated competitive advantages;

On the other hand, they need to strengthen standardized management, improve service quality, proactively adapt to the requirements of dynamic evaluations, and strive to obtain medical insurance designated-entity status to realize diversified development.

For pharmacies: both structural opportunities and challenges coexist.

Policies of “zero new additions” or “only minimal new additions” in the core urban areas mean that the pharmacy market in these areas has officially entered the era of competition for existing market share. If newly opened pharmacies cannot solve the medical insurance designated status issue, their survival space will be severely compressed.

At the same time, tens of new slots in places such as Chun’an, Jiande, Lin’an, etc. provide precious opportunities for chain pharmacies to expand outward and seize down-tier markets. How to capture these limited slots will become the top priority for the strategic deployment of major chain pharmacies in 2026.

Medical insurance designated status has completely left the “incremental expansion” era and entered a new stage of “optimization of existing capacity and development of the best.” This reshuffling brings industry pains, but it also pushes the medical and pharmaceutical industry toward a more standardized, more professional, and higher-quality direction.

For medical institutions, compliance is the survival bottom line, professionalism is the core competitiveness, and distinctive specialties are the path to development. Only by proactively adapting to policy changes, staying true to the essence of medical care, improving service quality, and running operations in a standardized manner can institutions stand firm in competition for existing capacity.

A massive amount of information and precise analysis—exclusively on the Sina Finance APP