Concept and legal framework of the care rate
Der Care rate is a central term in German social and health law. It refers to the remuneration that a residential care facility or hospital receives for the accommodation and care of persons in need of care or patients. The determination, structure, and billing of care rates are regulated by law and subject to a variety of legal norms. The legal design of the care rate serves to ensure a cost-effective, efficient, and needs-based provision in inpatient health and care sectors.
Legal basis of care rates
Statutory provisions for calculating care rates
The relevant provisions for calculating and determining care rates are set out in particular in Book XI of the Social Code (SGB XI) for care facilities and in Book V of the Social Code (SGB V) for hospitals. Additional regulations are found in the Heimgesetz (HeimG), the Hospital Financing Act (KHG), as well as in various state ordinances.
- Care facilities: The care rate covers costs for care, accommodation, meals, as well as investments. SGB XI (§§ 84 ff. SGB XI) regulates the structure and amount of the care rates. The remuneration must ensure the financial security of the facility while remaining affordable for payers and persons in need of care.
- Hospitals: In the hospital sector, the determination is mainly based on the flat-rate remuneration system (Diagnosis Related Groups, DRG). The classic care rate still exists here in special cases, for example in forensic psychiatric facilities (§ 13 KHG).
Care rate agreement and determination
Care rates are set between the facilities and the responsible payers, consisting of care insurance funds, social welfare agencies, and private payers, in so-called care rate agreements . If an agreement cannot be reached, the arbitration board may be called upon to make a binding care rate determination (§ 85 SGB XI; § 18 KHG).
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Structure and content of care rates
Components of care rates
Care rates are divided into several components, each associated with different types of costs:
- Care-related expenses: Costs of nursing care and support
- Accommodation and meal expenses: (“hotel costs”)
- Investment costs: Costs for buildings, equipment, and their maintenance
- Additional services: Optional or selectively utilized special services
In the hospital sector, analogous costs are reflected case-by-case through the care rate or generally through DRGs.
Care levels and grades
The respective amount of care-related expenses is calculated according to the determined care levels (up to 2016) or care grades (since January 1, 2017) pursuant to SGB XI. As the intensity of nursing care needed increases, the care component of the care rate increases.
Negotiation process and oversight
Negotiation of care rates
Care rates are regularly negotiated individually between the operators of care facilities or hospitals and the payers on the basis of legal requirements. The negotiation considers, among other things, the actual personnel and material costs, an appropriate personnel calculation, as well as regional characteristics. In particular, § 85 paras. 2 and 3 SGB XI regulate the calculation bases.
Arbitration board procedure
In case of failed negotiations, either party may call upon the arbitration board regulated by state law. This body decides, taking legal requirements into account, on the amount and structure of care rates in a binding manner, in order to ensure provision and maintain the balance between cost-effectiveness and appropriate medical or nursing care.
Monitoring and approval
Care rates are subject to oversight by the relevant state authorities. These authorities review compliance with legal requirements, cost-effectiveness, and transparency. Regular review ensures the ongoing appropriateness of the rates.
Financing and benefit provision
Application and billing of care rates
Care rates form the basis for the billing of services by facilities to nursing care funds, social welfare agencies, and private payers. For persons in need of care, the care-related portion is covered by long-term care insurance, while accommodation and meal costs generally have to be borne by the individual or via social assistance. Excess costs can, under certain conditions, be covered by the social welfare agency.
Personal contribution and co-payments
Because care rates often exceed the maximum amounts covered by social service providers, the individual in need of care is frequently left with a personal contribution. This amount varies nationwide and is subject to statutory adjustments to remain sustainable in the interests of social justice.
Care rate in the context of current developments
Reform movements and legislative adjustments
The amount, composition, and limitation of nursing-related personal contributions are the subject of ongoing reforms in order to organize rising care costs in a socially responsible manner. Most recently, adjustments and new regulations have been made through the Care Further Development Act as well as various amendments to SGB XI, which, for example, introduced the facility-specific personal contribution (EEE) .
Case law and practical effects
The design of care rates is regularly the subject of judicial clarification, especially regarding transparency, calculation, and compatibility with the principles of cost-effectiveness. In particular, administrative and social courts review rejections or approvals of care rates to ensure compliance with statutory requirements.
Literature and further regulations
- SGB XI (in particular §§ 82 – 90 SGB XI)
- SGB V (in particular §§ 109 – 127 SGB V)
- Hospital Financing Act (KHG)
- HeimG (Heimgesetz)
- Care Further Development Act
- DRG System Regulation (DRG-V)
Conclusion
The care rate represents a legally well-defined and comprehensively regulated cost framework for inpatient care and medical provision. Its legal structure achieves a balance between the protection of those in need of care, remuneration security for facilities, and the interests of payers. Ongoing supervision, further development, and adaptation to societal requirements is a central element of social law practice.
Frequently asked questions
How is the care rate determined by law?
In Germany, the care rate is regulated by law on the basis of the Social Codes, especially SGB XI (Statutory Long-Term Care Insurance) and SGB V (Statutory Health Insurance). The precise determination takes place within the framework of care rate negotiations between the providers of care facilities and the payers, particularly the long-term care funds and social welfare agencies. According to § 85 SGB XI, in particular, a detailed calculation of the facility’s own costs is required, which must be transparent and verifiable. The agreed care rates must on the one hand ensure the economic security of the care facility, but on the other hand also be economical and efficient, so as not to cause disproportionately high costs. The care rate is documented following negotiation in a written agreement between the parties and is binding until the next adjustment. If no agreement can be reached, an arbitration board decides (§ 80 SGB XI). The amount of the care rate can be adjusted with each new agreement, for example due to collectively agreed salary increases, changed operating costs, or legal requirements on staffing standards.
What legal options are available if the care rate is considered too high or too low?
If one party — whether payer or care facility — considers the care rate to be set too high or too low, the Social Codes provide clear legal means for review. According to § 85 para. 5 SGB XI, a subsequent review and, if necessary, correction as part of new negotiations is initially possible. If no agreement is reached, the arbitration board can be called upon, and its decision is legally binding. This is explicitly provided for by law to ensure a fair level of remuneration. Residents or their relatives do not have a direct right to sue for lower care rates; however, they may lodge complaints with the local social welfare agency or — in cases of hardship — apply for supplementary social assistance benefits (SGB XII) to avoid unreasonable hardship.
What is the legal relationship between the care rate and the facility-specific personal contribution (EEE)?
Legally, the care rate includes all services that a care facility must provide for its residents, including care, accommodation and meals, and additional investment costs. Since the 2017 reform of long-term care insurance, the so-called facility-specific personal contribution (EEE) applies in fully residential care facilities. The care rate serves as the basis for calculating the EEE — meaning that the legally prescribed personal contribution within the care rate is the same for each care level in full residential care. This regulation under § 43c SGB XI ensures that an increase in costs due to a higher care level no longer affects the resident’s personal contribution. However, changes to the care rate — for example, due to wage increases — can lead to an adjustment of the personal contribution for all residents.
What legal obligations must care facilities fulfill in connection with the care rate?
Care facilities are required under § 72 ff. SGB XI to obtain accreditation (care contract) in order to bill the long-term care funds. In relation to the care rate, this means they must disclose their own costs, provide comprehensive documents for the calculation, and ensure transparency regarding their cost structure. They are also obligated to inform residents in writing and in good time about any changes in the care rate — for example, after completed renegotiations or a decision by the arbitration board. At the time of contract conclusion and for each change, the transparency principle strictly applies — i.e., the legal obligation to clearly show all price components and services (§ 8 WBVG). It is also important that care facilities without an approved care rate agreement are not permitted to make lawful claims against payers or residents.
How are changes to the care rate implemented and communicated by law?
Changes to the care rate only take effect after a successful care rate negotiation or arbitration board decision. Legally, implementation takes place according to § 85 SGB XI through the conclusion of a new care rate agreement, which must be signed by both the care facility and the payers. This agreement specifies the date from which the new care rates apply. Care facilities are required to notify all affected residents and their legal representatives or relatives in writing at least four weeks before entry into force, as also required by the Residential and Care Contracts Act (WBVG) in §§ 9 and 10. If changes are not communicated in a timely or proper manner, the new care rates cannot be enforced against residents until notification has been provided in accordance with legal requirements.
What is the legal significance of the arbitration board procedure in determining the care rate?
If the negotiating parties cannot agree on the care rate, the arbitration board procedure pursuant to § 76 SGB XI applies. The arbitration board is an independent body made up of representatives of payers, care facilities, and neutral members. After hearing both parties, it makes a binding decision that, in individual cases, can be challenged before the social court. The arbitration board process is thus a central legal corrective intended to ensure a fair balance of interests and to guarantee the security of provision for those in need of care. During the proceedings, the last negotiated care rate generally continues to apply.
Do care rates have to be reimbursed or retroactively adjusted after the fact?
By law, a retroactive change in the care rate is generally possible under § 85 para. 6 SGB XI. If a new, higher (or lower) care rate is determined by a decision of the arbitration board or through a belatedly concluded agreement, it can be demanded retroactively from the date specified in the agreement or arbitration decision. Retroactive claims are only permitted if the affected residents were previously notified of this possibility or if this was contractually agreed. In practice, any back payments due from residents are often deferred or collected in installments, in order to avoid undue hardship. Payers must, in any case, pay their statutory share retroactively, provided the legal requirements have been met.
