Agreement on the Provision and Reimbursement of Healthcare Services

Legal Framework: Tender Procedure and the Network of Contracted Providers

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

An applicant is understood to be a provider authorized to provide healthcare in the relevant field, or a natural or legal person who intends to provide health services and is able to meet the prerequisites for providing health services in the relevant field of healthcare within the time limit set in the tender announcement (i.e., registration of a healthcare facility under Act No. 372/2011 Coll., on Health Services). 

The tender itself is evaluated by a committee composed of representatives from the Regional Authority, the respective health insurance company, a professional chamber (e.g., the Czech Medical Chamber), and a professional medical society. Each representative has one vote, and the final recommendation is determined by a vote.

An insurance company may only conclude a contract with a provider if they have received a recommendation in the tender procedure. However, the committee's recommendation does not create an automatic entitlement to a contract—while the insurance company must take it into account, the final decision rests with them. In practice, this means that even an applicant who succeeds in the tender may have to wait for a contract if the insurance company deems its network of providers to be sufficient.

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

Insurance companies have an internal contracting policy that considers other criteria in addition to availability—for example, whether the applicant has the appropriate specialization, equipment, and staffing for the required scope of care. Emphasis is also placed on the range and scheduling of office hours (the provider should be open for a sufficient length of time, ideally including afternoon hours), for which the insurance company also motivates providers with so-called bonuses, i.e., an increase in the value per point.

The insurance company also assesses the purposefulness of the plan (whether the services offered correspond to the needs of the insured 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 tender procedure. The physician must prove that they are qualified and that their practice will provide insured persons with accessible care that is genuinely needed. From a legal standpoint, this is a transparent process designed to prevent an excessive increase in contracted facilities while also compelling insurance companies to ensure care where it is lacking.

Contract Application and Required Documents

If a physician is successful in the tender procedure (the committee recommends concluding a contract), they then submit an official application to the specific health insurance company to establish a contractual relationship. The application is usually sent in writing to the relevant department (officer) of the insurance company. A number of documents must be attached to the application to prove compliance with all legal and contractual conditions. The typical documents required by insurance companies include:

• Confirmation of the tender procedure result – a copy of the decision stating that the provider has received a recommendation to conclude a contract. Without this document, the process cannot proceed.

• Authorization to provide health services – the Regional Authority's decision on the registration of the healthcare facility in the given field (under Act No. 372/2011 Coll.). This proves that the physician or facility meets the professional, technical, and staffing conditions for providing care.

• Liability insurance – a copy of the professional liability 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 physicians and other medical staff who will work at the facility, including proof of their education and specialization. For a solo practice, this means providing the physician's attestation diplomas, nurses' certificates, etc.

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

• List of requested health services – a list of services (according to the code list) that the physician wants to provide and bill to the insurance company.

• Material and technical equipment – a list of medical devices and office equipment. For services that require 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 – the assigned facility identification number (IČZ) from VZP and possibly other codes (IČP – workplace identification number, if assigned). The VZP insurance company assigns an IČZ to a new provider upon entering into a contractual relationship.

Larger insurance companies have contracting committees that usually meet once a quarter to evaluate individual applications. The committee assesses the application based on internal criteria (often similar to those in the tender procedure, see above)—considering, for example, the needs of the area, existing care coverage, professional opinions, etc. The outcome is an opinion on whether or not to conclude a contract with the applicant.

The insurance company then sends the physician a written notification, usually to their data box. In the case of a positive opinion, it attaches a draft contract for signature. If the opinion is negative, it does not have to be the final word—the provider has the option to appeal. 

The appeal is submitted in writing with a justification as to why the insurance company should reconsider its decision. It is advisable to add new information or arguments (e.g., highlighting deteriorating access to care in the region, additional specializations obtained, etc.). Appeals can be filed repeatedly. Insurance companies sometimes change their opinion if new facts emerge—for example, if another physician terminates their practice, creating an opening for a new one. Patience and good communication with the insurance company can lead to success on the second try.

Example from practice: A young physician successfully passed a tender procedure in the field of general practice, but the insurance company initially refused to conclude a contract, citing a sufficient number of general practitioners in the area. The physician filed an appeal, emphasizing that several older practitioners would soon be retiring and offered extended evening office hours. Based on these arguments, the insurance company changed its decision and eventually established the contract. – This hypothetical scenario shows that a negative decision is not always final, and it pays to fight with professional arguments.

Contractual Terms and Reimbursement Limits

Once a physician receives and signs the contract for the provision and reimbursement of covered services, they become a contracted provider for that insurance company. The contract is usually concluded for an indefinite period (unless otherwise specified) and is governed by a so-called framework agreement issued by the Ministry of Health (a 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 physician and an insurance company cannot be arbitrary—it must respect the conditions set by the framework model and legal regulations.

A contracted provider is entitled to reimbursement for health services provided to the insured persons of the respective insurance company. However, it is important to understand the reimbursement system and any limits that the contract and related regulations may impose. In the Czech Republic, care is reimbursed through a combination of capitation payments (for general practitioners), a fee-for-service (point) system, and flat-rate or bundled payments in various specializations.

Each year, a so-called reimbursement decree is issued, which sets the value per point and regulations for that year (e.g., Decree No. 314/2024 Coll. for 2025). For a new contracted physician, however, the concept of maximum reimbursement may be key at the beginning. Insurance companies typically apply a regulatory limit on the total reimbursement for a single provider, derived from so-called reference periods and average costs per patient. One of the mechanisms is PURO – average reimbursement per insured person.

For a new provider, the insurance company will base the value on the average cost of care per patient for comparable physicians in the previous period, and multiply this by the new physician's number of patients, thus creating the maximum amount of money it will reimburse them for the year. If the physician provides care exceeding this financial limit, they may not be fully reimbursed—the insurance company will not pay for some services above the limit. 

The maximum reimbursement (limits) can change over time (they increase, for example, if the physician acquires more patients, provides above-standard care, or meets bonus criteria). For a new provider with no history, the initial PURO is set according to the average of comparable practices (in the given field and region). Insurance companies sometimes inform the physician of the PURO value in a reimbursement addendum to the contract or in a separate letter with reference values.

Practical impact: A starting physician must be prepared that in the 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 hit the ceiling. It is therefore advisable to monitor reimbursement utilization continuously. There are also tools, such as online calculators or software (PUROBot), that help calculate ongoing reimbursement and prevent exceeding the limit.

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

A contracted provider also undertakes to comply with certain standards and rules—for example, to properly maintain medical records, bill for services according to valid code lists, allow the insurance company's auditing physician to conduct checks, etc. Audits by insurance companies are a reality: the insurance company can check the billing of care and refuse reimbursement for services it deems unjustified or overvalued. 

A typical example is so-called regulatory deductions—if a physician exceeds certain volumes (e.g., costs for medications or requested care from specialists), the insurance company will reduce their reimbursement according to the decree. Navigating these rules is not easy even for experienced physicians, as they often involve very technical matters of reimbursement regulations. It is therefore essential to become thoroughly familiar with the contractual terms.

From the perspective of the legal text of the contract, the provisions on termination and expiration of the contract are worth noting. According to the framework agreements, the reasons for terminating a contract are usually exhaustively listed. An insurance company cannot unilaterally terminate a contract without reason—one of the contractually defined cases must occur (e.g., a 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 quite strict in this regard and protects the stability of the contractual relationship (the principle of pacta sunt servanda – agreements must be kept). In the past, there have been debates about allowing termination without cause by insurance companies, but the professional community (including the Czech Medical Chamber) criticized this, and such a change has not yet been adopted. A physician should therefore check the contract to see what precise grounds for termination are listed and ensure that there is no "discretionary" termination without cause.

Risks in Concluding the Contract

An applicant for a contract should be aware of the potential pitfalls and risks of the entire process. The uncertainty of obtaining a contract is the biggest obstacle for new practices. Even if a physician invests in equipment and passes the tender procedure, the insurance company may not give them a contract immediately or at all. The risk increases in areas with a competitive environment—for example, in a city with many specialists, the insurance company may argue that it does not need another one. 

A physician may thus be left to rely on so-called non-contractual (direct) payment from patients, which is not sustainable in the long term in the segment of routine outpatient care (most patients will prefer to go to a physician covered by insurance). This is why many physicians choose to take over an established practice instead of starting a completely new one—they buy the practice along with its clientele and, ideally, its existing contracts with insurance companies. This solution usually does not require a tender procedure (if it is effectively a continuation of an existing contracted facility with the same scope). 

However, be careful in situations where the original physician did not have a full-fledged contract with the insurance company—for example, if they only provided care for direct payment and the insurance company only reimbursed them for necessary urgent procedures. If you take over such a practice, the entitlement to a contract does not automatically transfer to you. The new physician would be considered a non-contracted 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 physician would have to go through the standard tender procedure to obtain a regular contract. 

Example from practice: A young dentist bought a practice from a colleague, assuming he would also "take over" his contract with the insurance company. However, it turned out that the colleague had no contract (he only treated patients who paid in cash, and the insurance company only reimbursed him for acute treatments). The new dentist thus found himself without a contract and had to go through the tender procedure he had hoped to avoid by buying the practice.

Another risk associated with taking over a practice is the setting of reimbursement limits. If a new physician takes over a practice from a physician who had lower output or a narrower range of services, complications can arise. The new physician works more 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 that the insurance company sets for the new physician may be insufficient—the physician will quickly hit the maximum reimbursement, and further care above the limit will not be paid for. The solution is to negotiate (or automatically obtain) a higher limit in the following year, but this requires bridging the initial period with limited reimbursements.

This poses a financial risk for the physician, especially if they have already increased operating costs (e.g., hired another nurse, purchased a new ultrasound machine, etc.). Therefore, it is advisable to find out the current physician's reference data before taking over the practice—how many patients and what reimbursements they had—and prepare for a possible income shortfall in the initial period.

When concluding a new contract, there are also administrative risks. Errors in documents or failure to meet a formal condition can prolong or thwart the process. For example, if a physician forgets to renew their mandatory liability insurance, the insurance company will not want to sign the contract until it receives a valid document. 

Time delays are also a problem—the waiting period for a tender procedure (which can take several months from the submission of the proposal) and then for the insurance company's decision (another weeks to months) means that the practice cannot be fully launched immediately. In the meantime, the physician must either work elsewhere or provide care without reimbursement (or for direct payments), which is economically demanding. The risk of investing in an uncertain practice is therefore considerable—a physician may rent premises and equip an office, but if they ultimately do not get a contract, the return on investment is jeopardized.

From the perspective of communication with the insurance company, underestimating the appeal process in case of failure is a risk. As we have mentioned, a rejection of an application can often be overturned with a proactive approach. If a physician were to resign themselves to the first rejection, they could miss an opportunity. Therefore, it is advisable to view the process of contractual negotiations with the insurance company more as a business partnership negotiation—arguing, offering solutions (such as adjusting office hours, expanding care to underserved areas, etc.), and not being discouraged by the first failure.

When and Why to Contact a Lawyer

The legal aspects of the contractual relationship with health insurance companies are quite complex and can have far-reaching consequences for a physician. Therefore, it is advisable to consider consulting a lawyer specializing in medical law as early as the preparation or review of the contract. There are several reasons for this:

• Complexity of regulations and contractual terms: The contract for the provision of care refers to many laws, decrees, and methodologies (e.g., the Act on Health Services, the Act on Public Health Insurance, reimbursement decrees, framework agreements, etc.). Even for lawyers, the system of reimbursements and regulations is difficult to navigate, let alone for a busy physician. A lawyer can help explain the individual provisions of the contract—for example, what various limits mean exactly, under what conditions the insurance company can reduce reimbursements, what obligations the physician has when billing for care, etc. This helps to avoid unpleasant surprises. 

• Contract review and negotiation of amendments: Although contracts are largely standardized, they may contain individual addenda or arrangements. A lawyer can identify any disadvantageous 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 elements (e.g., a precisely defined scope of care, arrangements for reimbursement addenda, etc.). If the insurance company presents a contract with which the physician disagrees in a certain part, a lawyer can assist in negotiations—proposing a formulation or amendment. Some physicians fear that as individuals, they cannot negotiate anything with a large insurance company, but within certain limits, it is possible (especially when it comes to supplementing annexes, the scope of services, etc.). The professional approach of a legal representative can add weight to the negotiations.

• Tender procedure and administration: Even when applying for a tender, 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 discrepancies arise 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 tender committee's decision if appropriate). Legal assistance is also valuable when appealing against a contract rejection by the insurance company—it helps to write a well-founded justification with references to relevant legal norms, thereby increasing the chances of success.

• Resolving disputes with the insurance company: Even after the contract is concluded, conflicts can arise—typically regarding the reimbursement of provided care. Physicians often find themselves in disputes with insurance companies over the amount of reimbursements, the results of annual settlements, regulatory deductions, or the consequences of audits. For example, the insurance company may retroactively demand the return of money for allegedly incorrectly billed services, or refuse to reimburse an expensive service by citing that a limit has been exceeded. In such situations, professional legal argumentation and knowledge of case law are appropriate. A lawyer can represent the provider in conciliation proceedings with the insurance company (which is an out-of-court attempt to resolve a dispute) or directly in court proceedings. Medical law is a specialized area, and a lawyer with experience in this field knows the insurance companies' tricks and the procedural steps to defend against them. Having a lawyer on hand is therefore not a sign of a confrontational relationship, but rather a manifestation 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 the physician to new obligations and also keep an eye on formalities—for example, that the contract will require an addendum after a certain period according to a new reimbursement decree, or that it is necessary to respond in time to an insurance company's call to extend the contract. The physician can thus focus on their practice and leave the legal agenda to an expert.

In conclusion, concluding a contract with an insurance company is a complex process in which the medical mission intersects with legal and economic conditions. A physician as a healthcare provider should be not only a good expert in treatment but also, to some extent, a manager who understands contractual relationships. The key is to plan ahead, read contracts carefully, comply with the conditions, and not hesitate to consult with experts. This can prevent many problems and ensure that the provision of healthcare runs smoothly for both the physician and their patients.