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New Health Management Partnerships in Portugal

The Basic Health Law (approved by Law No. 95/2019 of September 4), in its Basis 6, determined that the provision of health care, as a state responsibility, should first be ensured by the Portuguese National Health System (NHS) and other public services.

In this sense, only in a supplementary and temporary manner, and in cases of justified need, agreements may be entered into with private and social sector entities, as well as with professionals in an independent work regime.

Based on this, the recently published Decree-Law no. 23/2020, of May 22, sets forth the rules for the conclusion of management partnership contracts in the health area in Portugal, which will be briefly addressed in this article.

Health management partnership contracts

Health management partnerships are agreements entered into with private and social sector entities, with the main purpose of ensuring the management and provision of health care corresponding to a public health service in establishments, or in a part functionally autonomous from them, integrated or to be integrated in the NHS, with transfer and sharing of risks, and may also involve, among others, the activities of design, construction or conservation of that establishment, or of part functionally autonomous from it.

The following aspects of the regime outlined in Decree-Law no. 23/2020 should be highlighted:

(i) The supplementary and temporary nature of these management contracts;

(ii) The conclusion of these contracts depends on the existence of a justified need, and this requirement must be demonstrated in a study, to be conducted by the Central Administration of the Health System and by the Regional Health Administration with territorial competence, approved by the Government member responsible for the health area after public consultation;

(iii) The aforementioned study shall integrate considerations regarding the needs of the users in the respective geographical area; the existing offer in the area and the possibility of concluding agreement contracts to meet the needs and also the time frame for the NHS, without resorting to partnership contracts, to be able to meet the verified needs.

(iv) The previous reference to a 30-year term for the management contract (with the possibility of its extension) has been removed, it now being determined that, due to the temporary nature of these contracts, they may only be renewed by means of a new study, which justifies the non-satisfaction of the needs within the previously established term.

The health management partnership contract, in accordance with Decree-Law 23/2020, shall establish the following aspects:

(i) The ancillary activities that the management entity may pursue;

(ii) The possibility of using the establishment to perform health services outside the scope of the public service it ensures, provided that such use does not jeopardize the fulfilment of public service obligations; and

(iii) the revenues that shall be considered as remuneration of the management entity, particularly the ones resulting from services provided to third parties in the context of ancillary activities or services not intended for the generality of users.

Management Entities

The management entities responsible for the management of the healthcare establishment, which is the object of a partnership agreement, shall be commercial companies with head office and main administration located in Portugal, whose exclusive object is the exercise of the activity which is the object of the agreement.

It should be noted that while the previous law on this matter (the now revoked Decree-Law no. 185/2002) referred merely to the guarantees of suitability, technical qualification and financial capacity as guiding principles of the management entity, the current Decree-Law no. 23/2020 lists, as applicable to management entities, the set of public management principles to which the other entities comprising the NHS are subject to.

This Decree-Law came into force on 23 May but does not apply to partnerships whose contracting process began before this date.

By analysing this new contracting regime it is possible to conclude that it leaves aspects unregulated such as the program of the procedure and specifications or the financing of the managing entity, which were foreseen and regulated in the already revoked Decree-Law no. 185/2002. Complementary legislation to develop the regime established in Basis 6 of the Health Law will be approved at a subsequent moment.

It should also be noted that the requirements listed in the regime of Decree-Law no. 23/2020 for the contracting of public-private partnerships seem to be in line with what is defined in the aforementioned Basis 6 of the Basic Health Law, which restricts the conclusion of these contracts to cases of justified need and merely on a temporary and exceptional basis.

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Caiado Guerreiro’s Health and Pharmaceutical Law team is available for any clarification on this matter.

The content of this information does not constitute any specific legal advice; the latter can only be given when faced with a specific case. Please contact us for any further clarification or information deemed necessary in what concerns the application of the law.

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