Germany: A game changer for financial investors in the German healthcare industry

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The Schedule Service and Supply Act aims to improve service levels within the compulsory health insurance system.

On March 14, 2019, the German Bundestag passed the Services and Procurement Act (“Terminservice- und Versorgungsgesetz, TSVG”), generally aimed at improving service levels within the compulsory health insurance system. In addition to these regulations, the TSVG contains a set of rules which are of great interest to private investors active in the German healthcare sector.

Rules and regulations now approved affect investment in medical supply centers (“Medizinische Versorgungszentren, MVZ”), through hospitals and non-medical dialysis providers who are the only forays into the legal health supply system available for – and, in fact, widely used by – sponsors (the others being nonprofits and municipalities which by definition are not viable options for investors).

The new law states that the incorporation of an MVZ through a non-medical dialysis provider will only apply to an MVZ providing subject-related medical care (i.e. medical care in connection with dialysis services or general care for renal patients), thus making these investment vehicles unavailable for the establishment of MVZ in other disciplines, such as ophthalmology or radiology.

The incorporation of MVZ through hospitals has not been restricted for any discipline of human medicine, but the creation of dental MVZs will be affected by a new quota system: in general, one hospital (including all MVZ owned and operated by him) may not exceed a 10 percent share in the dental service offer in the respective planning area (Planungsbereich) of the Association of Dentists of Statutory Health Insurance (Kassenzahnärztliche Vereinigung) where the MVZ is located. In planning areas where the dental supply is insufficient, the quota is 20%; in planning areas with a surplus dental supply, the quota is 5 percent. The quota system will not be applied retroactively to already established MVZs, but it comes into force in the event of an extension of these MVZs.

On April 12, 2019, the TSVG bill was approved by the Federal Council (Bundesrat) and should enter into force during the month of April 2019.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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