The proper execution of the transfer of a medical practice is a key prerequisite for continuing existing contractual relationships with health insurance companies. If the transfer process is not correctly set up, complications may arise in the relationship with health insurance companies, in the worst case even the loss of transferred contracts, which can significantly decrease the value of the practice. Read the commentary of Ondřeje Grygara and Františka Šimka.
TYPES OF TRANSFER
Act No. 48/1997 Coll., on Public Health Insurance and on Amendments and Supplements to Some Related Acts (hereinafter referred to as the "Public Health Insurance Act"), distinguishes two regimes for concluding contracts with health insurance companies when changing a health service provider: (i) transfer with the holding of a selection procedure[1]; and (ii) transfer without the holding of a selection procedure[2].
It is important to note that in the case of a selection procedure, the acquiring physician does not have a statutory right to conclude contracts with health insurance companies, as the conclusion of the contractual relationship is left to their discretion.[3]
A key indicator for choosing the appropriate method of transferring a medical practice may be the PURO[4], as this indicator serves to set reimbursements for the assessed period.
If the transferor had lower performance or provided health services in a narrow scope, the PURO may be set at a low level. Thus, after the transfer of the medical practice, the acquirer may face undervalued limits, even in a situation where he or she plans to invest in the modernization of the practice.
Under these circumstances, it may be more advantageous for the acquirer to carry out the transfer with the holding of a selection procedure, within which the PURO value may be newly set, even though this procedure entails uncertainty about the conclusion of contracts with health insurance companies. In this regard, it is always necessary to assess the specific circumstances of the case individually, in particular the type of health care provided (specialization) and the geographical location. These factors can fundamentally influence both the probability of success in the selection procedure and the subsequent contractual policy of the health insurance companies.
For these reasons, it is essential to pay increased attention both to the choice of the appropriate transfer variant and to the preparation of the contractual documentation.
TRANSFER VARIANTS
In order for the selection procedure not to be required, it is necessary that the transfer of the medical practice results in the transfer of all property rights related to the provision of health services from the provider to the acquirer (hereinafter referred to as "Transfer of the Medical Practice as a Whole").[5]
In practice, the Transfer of the Medical Practice as a Whole most commonly takes place through the transfer of a business establishment (hereinafter referred to as the "Establishment"), especially if the transfer is taking place between natural persons, or if the acquirer is a business corporation.
In addition, a medical practice can be transferred through the transfer of a share in a business corporation, if the practice is operated by a legal entity.
Another variant is the contribution of a medical practice to a business corporation, in the form of a non-monetary contribution to the registered capital or an additional payment outside the registered capital. This procedure is used especially in situations where a physician, performing his or her activities as a natural person, decides to perform them through a business corporation.
TRANSFER BETWEEN NATURAL PERSONS
The condition for the Transfer of the Medical Practice as a Whole can be fulfilled, for example, by concluding a contract for the purchase of a business establishment, or its part, if the business activity is conducted through several independent workplaces or fields, of which only some will be transferred to the buyer.[6]
However, when preparing a contract for the purchase of a business establishment, caution must be exercised, as in disputed cases health insurance companies may insist on holding a selection procedure, which may jeopardize the purpose of the transfer.
In addition to the requirement for the Transfer of the Medical Practice as a Whole, further conditions must be met, namely: (i) the transferor must apply to the relevant authority for the withdrawal of the authorization to provide health services or registration of a non-state medical facility; and (ii) the acquirer must, following the decision on the withdrawal of the authorization of the original provider, obtain authorization to provide health services specifying the same place of business as the transferor. It applies that if the acquirer intends to operate the practice on the day following the withdrawal or change of authorization of the existing provider, he or she must state this fact in his or her application, which must be submitted no later than on the day of submission of the application for withdrawal or change of authorization by the existing provider.[7]
It is also possible to use the procedure under the Public Health Insurance Act in the event of the death of a health care provider. If a provider dies, another natural person may, on the basis of that authorization to provide health services, continue to provide health services if they are authorized to use the deceased provider’s medical practice. Provided the conditions set out in Section 16(1) of the Public Health Insurance Act are met, this natural person must, within 15 days of the provider’s death, submit written notification to the relevant administrative authority and the health insurance companies with which the deceased provider had contracts as of the date of death, expressing the intent to continue with the provision of health services in order to acquire the provider’s rights and obligations.[8]
The provision of health services must be continued no later than 60 days from the date of the provider's death. The natural person is obliged to notify the relevant administrative authority in writing of the date from which they are continuing to provide health services, no later than 10 days from that date, and must also submit a declaration of fulfillment of the conditions set out in Section 27(3) of the Act on Health Services. [9] If the conditions for continued provision of health services are met, the relevant administrative authority, on the basis of notification, issues a certificate confirming fulfillment of these conditions to the notifier, who then submits it to health insurance companies and other authorized entities.[10]
On the day of death of the original provider, the right to continue providing health services expires; thereafter, a natural person may provide health services only on the basis of his or her own authorization and according to the process set out above.[11]
However, mere fulfillment of these conditions in either case does not lead to the automatic transfer of contracts with health insurance companies. The acquirer must deliver an application for contract conclusion on the provision and payment of reimbursed services to the health insurance company within 30 days from the date of granting the authorization to provide health services, or within 30 days from the date of issuance of the certificate on fulfilling the conditions for continuation of providing health services after the deceased provider, in the same scope as was concluded with the original provider.[12]
Upon delivery of this application, the health insurance company has a contractual obligation to conclude a contract with the acquirer within 180 days of its delivery. Until the contract is concluded, the acquirer has the right to payment for provided reimbursed services to the extent resulting from the contract concluded between the transferor and the health insurance company, but for no longer than a period of 210 days from the date of transfer of proprietary rights associated with the provision of health services.[13]
The article was published on the website Česká-justice.cz
Authors:
Ondřej Grygar, attorney at Portos, advokátní kancelář s.r.o and senior consultant at CCS Premium Trust a.s.
František Šimek, attorney at Portos, advokátní kancelář s.r.o. and senior consultant at CCS Premium Trust a.s.
