Contract for the provision and payment of healthcare services

Entering into a contract with a health insurance company is an essential step for doctors and healthcare facilities to be able to provide care covered by public health insurance. However, the process of obtaining a contract is subject to a strict legal framework and the requirements of insurance companies. In this article, we will try to explain how a contractual relationship with an insurance company is established, what conditions the provider must meet, what risks may arise when negotiating or terminating a contract, and what impact the absence of a contract has on a doctor's practice. We will also mention the reasons why it is useful to involve a lawyer in the process.

Author of the article: ARROWS (Mgr. Dita Zbožínková, LL.M., office@arws.cz, +420 245 007 740)

(part of the ARROWS team in the photo)

Legal framework: selection procedure and network of contracted providers

The legal framework governing the contractual relationship between doctors (healthcare providers) and health insurance companies is laid down in Act No. 48/1997 Coll. on public health insurance. This Act imposes an obligation on insurance companies to ensure that their insured persons have access to healthcare through a network of contracted providers. Insurance companies cannot conclude contracts entirely at their own discretion – a new contractual relationship is usually subject to a selection procedure organized by the regional authority (in Prague, the municipal authority). The selection procedure is a process laid down by law to assess whether a new provider is needed in a given field and location and whether it meets the required conditions.

A proposal to announce a tender may be submitted by a health insurance company, the applicant (doctor) or the local government (municipality). The regional authority announces the tender well in advance – the announcement is published on the official notice board for 30 working days, during which interested parties can submit their applications.

Applicant means a provider authorized to provide healthcare in the relevant field, or a natural or legal person who intends to provide healthcare services and is able to meet the requirements for providing healthcare services in the relevant field of healthcare (i.e., registration of a healthcare facility in accordance with Act No. 372/2011 Coll. on health services).

The evaluation of the selection procedure is carried out by a committee composed of representatives of the regional authority, the health insurance company concerned, a professional chamber (e.g., the Czech Medical Chamber) and a professional medical society. Each representative has one vote and the final recommendation is made by a vote.

The insurance company may only conclude a contract with a provider if it has been recommended in the selection procedure. However, the committee's recommendation does not automatically entitle the provider to conclude a contract – the insurance company must take it into account, but the final decision is up to them. In practice, even a candidate who is successful in the selection procedure may have to wait for a contract if the insurance company considers that its network of providers is already sufficient.

The aim of this mechanism is to maintain a rational network of healthcare facilities. Insurance companies assess, for example, the availability of care in the region, the number of insured persons who need care, and the current saturation of the area with doctors of a given specialization. If there are enough doctors in the area, the insurance company may refuse another contract on the grounds that it would be redundant. Conversely, in areas where there is a shortage of doctors, insurance companies themselves actively issue calls for tenders to attract new doctors (e.g., rural or border regions with a shortage of practitioners).

Insurance companies have internal contracting policies that take into account not only availability but also other criteria, such as whether the applicant has the appropriate specialization, equipment, and staffing for the required scope of care. Emphasis is also placed on the scope of office hours and their schedule (the provider should be open long enough, ideally also in the afternoon), for which the insurance company motivates the provider with a so-called bonus, i.e., an increase in the price per point. The insurance company also assesses the purpose of the intention (whether the services offered meet the needs of insured persons in the area). Only when all these aspects are favorable is the insurance company willing to include the new provider in its network.

Summary: The first step to obtaining a contract is to successfully pass the selection process. The doctor must prove that they are qualified and that their practice will provide insured persons with accessible care that is genuinely needed. From a legal point of view, this is a transparent process designed to prevent an unnecessary increase in the number of contracted facilities, while at the same time forcing insurance companies to provide care where it is lacking.

Application for a contract and necessary documents

If a doctor is successful in the selection process (the committee recommends concluding a contract), they then submit an official application to the specific health insurance company to enter into a contractual relationship. The application is usually sent in writing to the relevant department (clerk) of the insurance company. The application must be accompanied by a number of documents proving that all legal and contractual conditions have been met. The typical documents required by insurance companies include, in particular:

• Confirmation of the selection procedure result – i.e., a copy of the decision that the provider has been recommended to conclude a contract. Without this document, it is not possible to proceed further.

• Authorization to provide healthcare services – a decision by the regional authority on the registration of a healthcare facility in the given field (pursuant to Act No. 372/2011 Coll.). This proves that the doctor or facility meets the professional, technical, and personnel conditions for providing care.

• Liability insurance – a copy of the professional insurance policy, which is mandatory for healthcare providers. The insurance company must be certain that any damages incurred during the provision of care will be covered.

• Staffing and qualifications – a list of doctors and other healthcare personnel who will work at the facility, including proof of their education and specialization. For independent practices, this means providing the doctor's certification diplomas or nurses' certificates, etc.

• Office hours – a schedule of proposed office (operating) hours for individual doctors/service providers.

• List of required medical services – a list of services (according to the code list) that the doctor intends to provide and report to the insurance company.

• Material and technical equipment – a list of medical devices and equipment in the office. For services that are tied to a specific device, the insurance company usually requires proof of ownership or lease of the device (e.g., a purchase or lease agreement). Sometimes a declaration of conformity for medical devices (confirmation that the device meets standards) is also attached.

• IČZ and other identification – assigned identification number of the facility (IČZ) from VZP and, if applicable, other codes (IČP – identification number of the workplace, if assigned). The VZP insurance company assigns the IČZ to a new provider upon entering into a contractual relationship.

Larger insurance companies have contract committees that usually meet once a quarter to evaluate individual applications. The committee evaluates the application according to internal criteria (often similar to those used in the selection procedure, see above) – taking into account, for example, the needs of the area, existing coverage of care, expert opinion, etc. The outcome is a decision on whether or not to conclude a contract with the applicant.

The insurance company then sends the doctor a written notification, usually to their data box. If the opinion is positive, it attaches a draft contract for signature. If the opinion is negative, this may not be the end of the process – the provider has the option to appeal.

The appeal must be submitted in writing, stating the reasons why the insurance company should reconsider its decision. It is advisable to add new information or arguments (e.g., emphasize the deteriorating availability of care in the region, additional specializations obtained, etc.). Appeals may be filed repeatedly. Insurance companies sometimes change their opinion if new facts emerge—for example, another doctor ends their practice, creating space for another. Patience and good communication with the insurance company can lead to success the second time around.

Practical example: A young doctor successfully passed the selection process in the field of general practice, but the insurance company initially refused to conclude a contract, citing a sufficient number of practitioners in the area. The doctor lodged an appeal, emphasizing that several older practitioners would soon be retiring and offering extended office hours into the evening. Based on these arguments, the insurance company changed its decision and eventually signed the contract. This hypothetical scenario shows that a negative decision is not always final and that it pays to fight with expert arguments.

Contract terms and reimbursement limits

Once a doctor receives and signs a contract for the provision and reimbursement of covered services, they become a contracted provider for the insurance company. The contract is usually concluded for an indefinite period (unless otherwise specified) and is governed by a framework contract issued by the Ministry of Health (decree). The framework agreement contains basic provisions on the rights and obligations of the parties, including, for example, grounds for termination. This means that an individual contract between a doctor and an insurance company cannot be arbitrary – it must respect the conditions set out in the framework agreement and legal regulations.

The contractual provider is entitled to reimbursement for healthcare services provided to the insured persons of the insurance company. However, it is important to understand the reimbursement system and any limits set by the contract and related regulations. Reimbursement for care in the Czech Republic is a combination of capitation payments (for general practitioners), a performance (point) system, and flat-rate or package payments in various specialties. Every year, a so-called reimbursement decree is issued, which sets the value of a point and regulations for the given year (e.g., Decree No. 314/2024 Coll. for 2025). However, for a new contracted doctor, the key term may initially be maximum reimbursement.

Insurance companies typically apply a regulatory limit on the total reimbursement for a single provider, derived from the so-called reference period and average costs per patient. One of the mechanisms is PURO – average reimbursement per insured person. For new providers, the insurance company takes the average cost of care per patient for comparable doctors in the previous period and multiplies this by the number of patients of the new doctor, which gives the maximum amount of money that will be reimbursed to them per year. If a doctor provides care above this financial limit, they may not be reimbursed for everything – the insurance company will not pay them for the services provided above the limit.

Maximum reimbursement (limits) may change over time (e.g., they increase if the doctor acquires more patients, provides above-standard care, or meets bonus criteria). For new providers with no history, the initial PURO is set based on the average of comparable practices (in the given field and region). Insurance companies sometimes inform doctors of the PURO value in a reimbursement addendum to the contract or in a separate letter with reference values.

Practical impact: Beginning doctors must expect that in their first year they may not be paid for all services if they exceed the set limit. For example, a specialist has an average limit (PURO) of CZK 2,000 per patient; if they treat significantly more complex cases or more patients than average, their billing may reach the ceiling. It is therefore advisable to monitor the use of reimbursements on an ongoing basis. There are also tools such as online calculators or software (PUROBot) that help calculate the ongoing reimbursement and prevent it from being exceeded.

Contract limits do not only apply to money, but also to the scope of care. The contract usually defines the expertise and services that the doctor is allowed to report under it. If the provider later wants to expand their services (e.g., a new service or device), they must ask the insurance company for a contract extension. The insurance company will again assess whether the extension is justified and whether the doctor meets the conditions for the new service (e.g., qualifications or equipment).

The contracted provider also undertakes to comply with certain standards and rules, such as keeping proper medical records, reporting services according to valid codes, allowing the insurance company's reviewing physician to check their work, etc. Audits by insurance companies are a reality: an insurance company may check the reporting of care and refuse to reimburse services that it considers unjustified or overpriced.

A typical example is so-called regulatory deductions – if a doctor exceeds certain limits (e.g., costs for medication or requested specialist care), the insurance company will reduce their reimbursement in accordance with the relevant decree. Navigating these rules is not easy, even for experienced doctors, as they often involve highly technical matters of reimbursement regulations. It is therefore essential to familiarize yourself with the terms and conditions in detail.

From a legal perspective, the provisions on termination and expiry of the contract are worth noting. According to framework agreements, the grounds for termination of the contract are usually listed exhaustively. The insurance company cannot unilaterally terminate the contract without reason – one of the contractually defined cases must occur (e.g., serious breach of contractual obligations by the provider, termination of the authorization to provide care, repeated failure to meet quality indicators, etc.). Current legislation is relatively strict in this regard and protects the stability of the contractual relationship (the principle of pacta sunt servanda – contracts must be honored). In the past, there have been debates about allowing termination without cause by insurance companies, but the professional public (including the ČLK) has criticized this, and no such change has been adopted to date. Doctors should therefore check the contract to see what specific reasons for termination are stated and ensure that there is no "free" termination without giving a reason.

Risks when concluding a contract

Applicants for a contract should be aware in advance of the possible pitfalls and risks of the entire process. Uncertainty about obtaining a contract is the biggest obstacle for new practices. Even if a doctor invests in equipment and passes the selection process, the insurance company may not give them a contract immediately or at all. The risk is higher in areas where there is competition – for example, in a city with many specialists, the insurance company may argue that it does not need any more.

Doctors may therefore be left relying on so-called non-contractual (direct) payments from patients, which is not sustainable in the long term in the general outpatient care segment (most patients will prefer to go to a doctor covered by insurance). Therefore, many doctors choose to take over an established practice instead of setting up a completely new one – they buy the practice along with its clientele and, ideally, its existing contracts with insurance companies. This solution does not usually require a tender (if it is in fact a continuation of an existing contractual facility to the same extent).

However, be aware of situations where the original doctor did not have a full contract with the insurance company – for example, if they only provided care for direct payment and the insurance company only reimbursed them for necessary emergency procedures. If you take over such a practice, you do not automatically inherit the right to a contract. In this case, the new doctor would be listed as a non-contractual partner and the insurance company would only reimburse them for urgent care, just like their predecessor. A full contractual relationship would not be established and the doctor would have to go through the standard selection process to obtain a regular contract.

Real-life example: A young dentist bought a dental practice from a colleague, believing that he would also "take over" his contract with the insurance company. However, it turned out that his colleague did not have a contract (he only treated patients who paid in cash, and the insurance company only paid him for emergency treatment). The new dentist thus found himself without a contract and had to go through the selection process, which he had wanted to avoid by buying the practice.

Another risk associated with taking over a practice is the setting of reimbursement limits. If a new doctor takes over a practice from a doctor who had a lower output or a narrower range of services, complications may arise. The new doctor works longer hours, introduces new services, and accepts more patients. This naturally leads to higher costs for the insurance company, but the historical limit (PURO) calculated from the reference period may remain relatively low.

The reimbursement ceiling set by the insurance company for the new doctor may be insufficient – the doctor will quickly reach the maximum reimbursement and will not be reimbursed for any further care above the limit. The solution is to negotiate (or automatically obtain) a higher limit in the following year, but this requires overcoming the initial period with limited reimbursements. This represents a financial risk for doctors, especially if they have already increased their operating costs (e.g., hired an additional nurse, purchased a new ultrasound machine, etc.). It is therefore advisable to find out the reference data of the current doctor before taking over the practice – how many patients and what reimbursements they had – and to prepare for a possible loss of income in the initial period.

There are also administrative risks when concluding a new contract. Errors in documents or failure to meet certain formal requirements can prolong or even thwart the process. For example, if a doctor fails to renew their mandatory liability insurance, the insurance company will not want to sign the contract until it receives valid proof of insurance.

Time delays are also a problem – the waiting period for the selection process (which can take several months from the submission of the proposal) and then for the insurance company's decision (another few weeks to months) means that the practice cannot be fully operational immediately. In the meantime, the doctor must either work elsewhere or provide care without payment (or for direct payment), which is economically demanding. The risk of investing in an uncertain practice is therefore considerable – a doctor may rent premises and equip a practice, but if they do not ultimately obtain a contract, the return on their investment is at risk.

From the point of view of communication with the insurance company, there is a risk of underestimating the appeal process in the event of failure. As we have mentioned, the rejection of an application can often be reversed by taking an active approach. If a doctor accepts the first rejection with resignation, they may miss an opportunity. It is therefore advisable to view the process of contractual negotiations with an insurance company more as business partnership negotiations – argue, offer solutions (such as adjusting office hours, extending care to underserved areas, etc.), and do not be discouraged by initial failure.

When to consult a lawyer and why

The legal aspects of contractual relationships with health insurance companies are relatively complex and can have far-reaching consequences for doctors. It is therefore advisable to consider consulting a lawyer specializing in healthcare law when preparing or revising a contract. There are several reasons for this:

• Complexity of regulations and contractual terms: A healthcare contract refers to many laws, decrees, and methodologies (e.g., the Healthcare Services Act, the Public Health Insurance Act, reimbursement decrees, framework agreements, etc.). Even for lawyers, the reimbursement and regulatory system is difficult to navigate, let alone for a busy doctor. A lawyer can help explain individual provisions of the contract—for example, what exactly the various limits mean, under what conditions the insurance company can reduce payments, what the doctor's obligations are when reporting care, etc. This prevents unpleasant surprises.

• Reviewing contracts and negotiating amendments: Although contracts are largely standardized, they may contain individual amendments or provisions. A lawyer can identify any unfavorable or unusual clauses. For example, they can check whether the contract restricts the provider more than required by law or whether it contains all the essential information (e.g., precisely defined scope of care, provisions on payment supplements, etc.). If the insurance company submits a contract with which the doctor disagrees in certain parts, a lawyer can assist in negotiations—suggesting wording or amendments. Some doctors fear that as individuals they cannot negotiate anything with a large insurance company, but this is possible within certain limits (especially when it comes to adding annexes, the scope of services, etc.). The professional approach of a legal representative can add weight to the negotiations.

• Selection procedure and administration: When applying for the selection procedure, a lawyer can advise on how to correctly formulate the application, what documents to submit, and how to argue the need for a new practice. If there are any discrepancies or if the regional authority or insurance company acts incorrectly, a lawyer can defend the applicant's rights (e.g., ensure that the composition of the committee and the process comply with the law, or appeal against the selection committee's decision, if appropriate). Legal assistance is also valuable when appealing against the rejection of a contract by an insurance company – it will help to draft a compelling justification and reference to relevant legal norms, thereby increasing the chances of success.

• Resolving disputes with insurance companies: Even after the conclusion of a contract, conflicts may arise – typically regarding the reimbursement of care provided. Doctors often find themselves in disputes with insurance companies over the amount of reimbursement, the results of annual statements, regulatory deductions, or the consequences of audits. For example, an insurance company may retroactively demand reimbursement for allegedly incorrectly reported services or refuse to pay for an expensive service on the grounds that the limit has been exceeded. In such situations, expert legal argumentation and knowledge of case law are essential. A lawyer can represent the provider in conciliation proceedings with the insurance company (which is an out-of-court attempt to resolve the dispute) or directly in court proceedings. Healthcare law is a specialized field, and a lawyer with experience in this area knows the tricks of insurance companies and the procedural steps to defend against them. Having a lawyer on hand is therefore not a sign of a conflictual relationship, but rather a sign of foresight on the part of the physician.

• Updates and legislative changes: A legal expert continuously monitors changes in laws, decrees, and methodologies. They can alert doctors to new obligations and also keep an eye on formalities—for example, that a contract will require an amendment after a certain period of time in accordance with a new reimbursement decree, or that it is necessary to respond in a timely manner to an insurance company's request to extend a contract. This allows doctors to focus on their practice and leave the legal agenda to the experts.

In conclusion, concluding a contract with an insurance company is a complex process that combines the medical profession with legal and economic conditions. As a healthcare provider, a doctor should not only be a good medical professional, but also, to a certain extent, a manager who understands contractual relationships. It is essential to plan ahead, read contracts carefully, comply with the terms and conditions, and do not hesitate to consult experts. This will prevent many problems and ensure that healthcare provision runs smoothly for both doctors and their patients.