"Selected treatment" (選定療養) is a term patients meet at the point of payment—private room charges, or the flat fee for visiting a large hospital without a referral. Since long-listed drugs joined the list in October 2024, it has become a familiar matter for clinics too.
Selected treatment is, in short, a mechanism where the patient pays only for an add-on they chose themselves. Basic care stays under insurance coverage; the patient pays only for the additional service.
This article covers why the mechanism exists, how it differs from the other categories, what qualifies, and how to run it inside a clinic.
Disclaimer: This article is general information. Covered items and amount requirements change as notifications are revised. Please check the latest notifications from the Ministry of Health, Labour and Welfare.
What Is Selected Treatment—An Exception to the Ban on Mixed Billing
The starting point is that Japan's public health insurance prohibits mixed billing in principle.
The ban means that if insured and non-insured care are combined in one course of treatment for the same illness or injury, the entire course falls outside insurance coverage. There is no penalty as such; it operates by removing coverage.
Applied strictly, this creates a problem. If merely requesting a private room made the whole hospital bill self-paid, patient choice would effectively disappear.
The exception is the combined insured/non-insured care system. Within a predefined range, the basic portion is covered and the add-on is self-paid. Selected treatment is one category within it.
The rules and accounting treatment are covered in Separating Insured and Private-Pay Accounting.
Three Categories—Evaluated, Patient-Requested, and Selected
The system has three categories. Because their purposes differ, confusing them leads to operational error.
| Category | Purpose | Examples |
|---|---|---|
| Evaluated treatment | Care at the stage of being evaluated for future insurance coverage | Advanced medical care, care in drug and device trials, use after approval but before listing |
| Patient-requested treatment | A mechanism starting from a patient's request, examining unapproved drug use case by case | Care approved on the basis of a patient's request |
| Selected treatment | An add-on where the patient chose a special service or option | Private rooms, after-hours visits, appointment consultations, flat fees at large hospitals, choosing a long-listed drug |
The decisive difference is whether insurance coverage is anticipated.
Evaluated and patient-requested treatment look toward future coverage. They are at the stage of gathering efficacy and safety data and may eventually be listed.
Selected treatment does not anticipate coverage. It concerns comfort, convenience, and patient preference—different in nature from the "necessary care" public insurance should support. Hence its structure: it arises only if the patient chooses it.
What Qualifies as Selected Treatment
Scope is limited to items set by notification. The main ones:
Environment and convenience
- Special care environment (private room charges) — where the patient requests a private or small room
- Consultation by appointment — where an appointment fee is charged
- Consultation outside the clinic's stated hours — an after-hours visit at the patient's convenience
Visiting a large hospital
- Flat fee for visiting without a referral — applying to advanced treatment hospitals, regional medical care support hospitals above a certain size, and designated referral hospitals. Minimum amounts are set for first and follow-up visits
Choices about the content of care
- Choosing a long-listed drug — requesting the brand-name product without medical necessity (from October 2024)
- Procedures beyond the frequency limit — tests or rehabilitation beyond the billable cap, at the patient's request
- Hospital stays beyond 180 days
Dental
- Choice of material for metal crown restoration of anterior teeth
- Choice of metal-based full dentures
- Guidance and management for patients with caries
Of these, the three that touch daily clinic work most are choosing a long-listed drug, appointment consultations, and after-hours visits. Long-listed drugs are covered in What Are Long-Listed Drugs?.
The Nature of the Charge—Outside Insurance, and Taxable
The "special charge" collected as selected treatment has three properties worth fixing in mind.
It is entirely patient-paid. It sits outside insurance coverage and is not counted toward the high-cost medical expense benefit. For the patient it arises separately even after the monthly cap is reached.
Consumption tax applies. Insurance benefits are tax-exempt, but a charge collected as selected treatment is consideration for a service outside insurance and is therefore taxable. In accounting, the tax category differs from the insured portion—which is what bites in practice.
The institution sets the amount. Some items (such as the large-hospital flat fee) have minimums, but most are set by the institution. That does not mean the amount is free; it must be socially reasonable.
In-Clinic Practice—Posting, Explanation, Consent, Accounting
Providing selected treatment requires meeting procedural requirements. Setting a price is not enough.
Posting. Post the content and amount where patients can see it. Publication on the website may also be required. You cannot charge for an item you have not posted.
Advance explanation and consent. You must explain the content and amount in advance and obtain consent. For some items, such as private rooms, written consent is clearly required. Collecting without consent may lead to a refund demand.
Issuing receipts. Issue a receipt that states the selected treatment charge separately from insured care. A combined total does not meet the requirement.
Record keeping. Beyond accounting, the record should make the judgment and its basis explainable. What gets examined in an audit is the documentation.
Written internal rules. Which items are treated as selected treatment, and when no charge applies. If explanations vary by staff member, patients lose trust.
Particular Care With Private Room Charges
Private room charges cannot be collected where the patient did not request the room. These cases are outside scope:
- No confirmation by consent form was obtained
- The patient was placed in the room because treatment required it
- The placement was for the institution's convenience, such as a full ward
You cannot charge on the grounds that "it was the only room free." The test is whether the patient made a choice.
Common Misconceptions
"Selected treatment is a form of private practice." No. In private practice the whole course is outside insurance; in selected treatment the basic portion remains covered and only the add-on is self-paid.
"An institution can designate anything as selected treatment." It cannot. Scope is limited to items set by notification. Pricing your own service makes it private practice, not selected treatment.
"Posting removes the need for consent." Posting and consent are separate requirements. Even with posting, individual explanation and consent are a precondition for charging.
"It does not arise once the high-cost cap is reached." Because the charge sits outside insurance, it is not counted toward the high-cost benefit. It arises separately.
"Selected treatment only concerns large hospitals." Choosing a long-listed drug, appointment consultations, and after-hours visits all arise at clinics.
What the System Has to Do
For selected treatment, the system needs a design that separates and then connects.
Accounting must separate. The insured and selected treatment portions must be handled as distinct items with distinct tax categories. A system that only handles a combined total cannot meet the receipt requirement.
It must stay connected under one patient and one visit. Using a separate system to achieve separation loses the per-patient history. The requirement is to divide within a single foundation.
It must track amount changes. Items like long-listed drugs change with price revisions and must update through master data. Fall back to manual calculation and the front desk stalls at every revision.
For pricing private-pay menus generally, see How to Price Private-Pay Services.
Pottech's AI Karte is an AI-native EMR that handles the medical record and billing system as one. For the design principle of separating insured and non-insured while connecting them on one foundation, see What Is an AI-Native Electronic Medical Record?.
Conclusion
- Selected treatment lets the patient self-pay only the add-on they chose
- It exists because of the ban on mixed billing, with the combined insured/non-insured system as the exception
- Of the three categories, evaluated and patient-requested treatment anticipate coverage; selected treatment does not
- Scope is limited to items set by notification; institutions cannot add their own
- The charge is fully patient-paid, taxable, and outside the high-cost benefit
- Four practical requirements: posting, advance explanation and consent, a separated receipt, and record keeping
- Private room charges cannot be collected where placement was for the institution's convenience or treatment necessity
- The items closest to clinic work are long-listed drugs, appointment consultations, and after-hours visits
- The system requirement is "separate, yet connected"—divided in accounting, joined at the patient level
For details on AI Karte or to request a demo, please contact us.