Healthcare

Unlike countries such as Israel or the United Arab Emirates, Germany has no specific statutory regulations for medical tourism. This gives rise to considerable legal uncertainty:

The 5 critical problem areas:

❌ Unresolved billing – GOÄ binding vs. free fee agreement?
❌ Data protection complexity – GDPR with third-country patients (Saudi Arabia, UAE, Kuwait)
❌ Liability risks – Who is liable for patient intermediaries?
❌ Corruption risk – § 299a StGB (corruption in the healthcare sector)
❌ Payment defaults – Embassies pay nothing or only in part

The treatment of international patients involves complex contractual relationships between multiple parties:

1. Treatment contract with patient (§§ 630a ff. BGB)
   • Physician’s duty to treat
   • Duty to inform (particular challenges with language barriers!)
   • Documentation obligation (10 years pursuant to § 630f BGB)
   • Liability for treatment errors
2. Cost coverage by the embassy
   • Frequently from Gulf States (Saudi Arabia, UAE, Kuwait)
   • Problem: Embassies enjoy diplomatic immunity → virtually unenforceable in the event of payment refusal
   • Solution: Require advance payment (legally sensitive) or clarify conditions and options in advance jointly with the health offices of the embassies
3. Patient intermediaries & service providers
   • Not a regulated profession in Germany
   • Risk: bogus self-employment (subject to social insurance contributions)
   • Criminal liability under § 31 MBO-Ä (professional code): commission for patient referral is fundamentally prohibited!

A. Cost Estimate

General principle pursuant to § 632 para. 3 BGB:
“A cost estimate is, in case of doubt, not to be remunerated.”

❌ Fees for preparing cost estimates only with express agreement
❌ Standard-form clauses fail the standard terms control (§§ 305 ff. BGB)

Binding nature of the cost estimate:

• Deviations of up to 15% are accepted by the courts
• Overruns > 15% → Patient has an extraordinary right of termination (§ 650 BGB by analogy)
• Damages pursuant to § 280 para. 1 BGB in the event of a grossly defective cost estimate
• Criminal liability for fraud (§ 263 StGB) in the event of a deliberately understated estimate

Our 7-point checklist for secure cost estimates:

• ✅ Four-eyes principle for approval (coding specialist + senior physician)
• ✅ Label as “cost indication” rather than “cost estimate”
• ✅ Limit validity period (e.g. 6 months)
• ✅ Sign only “on behalf of” (no personal liability risk)
• ✅ Explicit note: estimate is based solely on documents available
• ✅ Risk factor disclosed transparently (not as a flat 20%)
• ✅ Notify patient/embassy immediately of any deviations

B. Billing pursuant to GOÄ – Mandatory Price Regulation

BGH landmark judgment of 23.03.2006 (Az. III ZR 223/05):
“All private medical services must be billed exclusively in accordance with the GOÄ, regardless of the patient’s origin. The GOÄ constitutes mandatory price regulation.”

New case law 2024 – Important changes!

BGH of 4 April 2024 (Az. III ZR 38/23):

• Binding application of the GOÄ also for outpatient services by legal entities (clinic GmbH, MVZ)
• The GOÄ applies where the treatment contract is concluded with a legal entity (e.g. hospital operator, MVZ-GmbH) and outpatient services are rendered by employed physicians
• Flat-rate billing for outpatient medical services is not permissible

BGH of 13 June 2024 (Az. III ZR 279/23):

• Also applies to purely private clinics
• Inpatient services: GOÄ not mandatory in the case of a total admission contract without a separate additional physician contract

Practical consequences for clinics and MVZ:

• All outpatient medical services must be billed pursuant to the GOÄ
• Flat-rate fees are no longer permissible
• Particularly affects MVZ-GmbHs and hospital operators

The treatment of international patients automatically involves cross-border data flows, which give rise to particular data protection challenges:

The critical situation:

Highest data protection requirements:

• Art. 9 GDPR: Health data constitutes “special category data”
• Art. 44–49 GDPR: Transfer to third countries restricted
• Art. 6 para. 1 GDPR: Legal basis required
• Sanctions: Up to EUR 20 million or 4% of annual turnover for violations

Typical risk scenario:

What happens:

1. Patient intermediary (Dubai) sends the clinic (Germany):
   • Patient name, date of birth, nationality
   • Medical findings (MRI, laboratory results, diagnosis)
   • Patient contact details (telephone, email)
2. Clinic prepares cost estimate and sends it to the intermediary
3. Clinic sends invoice directly to the embassy (Saudi Arabia)
   • Contains: patient name, diagnosis, procedures performed, costs

Legal assessment: MULTIPLE GDPR VIOLATIONS!

• ❌ Error 1: Cost estimate without prior patient consent (Art. 13 GDPR)
• ❌ Error 2: Data transfer to third country without legal basis (Art. 44 GDPR)
• ❌ Error 3: No data processing agreements with intermediary & embassy (Art. 28 GDPR)
• ❌ Error 4: Patient not informed about data flows (Art. 13, 14 GDPR)

Sanctions:

• Fine: EUR 5–20 million or up to 4% of annual turnover
• Damages claims by the patient (Art. 82 GDPR)
• Complaint to supervisory authority → audit & investigation

Our solutions:

• ✅ Data processing agreements (DPA) with all service providers (interpreters, intermediaries, cloud providers)
• ✅ Patient data protection consents in multiple languages
• ✅ Third-country transfers structured in a legally secure manner (Art. 49 GDPR: performance of contract or explicit consent)
• ✅ Data protection impact assessment (DPIA) pursuant to Art. 35 GDPR
• ✅ Pseudonymisation of billing data sent to embassies

The Optimal Legal Form for Your Medical Facility

The German healthcare sector is becoming increasingly concentrated and consolidated. Whether you are establishing a new clinic, restructuring an existing practice, or carrying out an M&A transaction – the legal form is decisive for liability, taxation, and flexibility.

1. Solo Practice (Freelancer)

• Legal form:
  • Natural person (sole trader) – not a company
  • No entry in the commercial register
  • Freelancer pursuant to § 18 EStG
• Liability:
  • Unlimited personal liability
  • Professional indemnity insurance essential
• Advantages:
  • ✓ Maximum flexible structure
  • ✓ Minimal compliance requirements
  • ✓ Fast decision-making
  • ✓ No corporate income tax
• Disadvantages:
  • ❌ Full personal liability
  • ❌ No co-partners
  • ❌ No succession planning provided for
  • ❌ Difficult capital raising

2. Joint Practice (Berufsausübungsgemeinschaft – BAG)

• Legal form:
  • Civil law partnership (GbR) → oldest model
  • Professional partnership (PartG) → more modern variant
  • Professional partnership with limited liability (PartG mbB) → since 2013
• Liability (GbR):
  • Each partner is jointly and severally liable without limitation
  • Personal assets are exposed
• Liability (PartG mbB):
  • Liability limited to partnership assets for professional errors
  • BUT: The treating physician remains personally and unlimitedly liable for their own treatment and informed consent errors (§ 823 BGB – tortious liability)
  • Prerequisite: Professional indemnity insurance with a minimum insured sum of EUR 5,000,000 per insured event
• Formation:
  • No notarial certification required (GbR)
  • PartG/PartG mbB: Entry in the partnership register
• Partnership agreement – mandatory contents:
  • ✅ Profit distribution
  • ✅ Management & representation
  • ✅ Notice periods & withdrawal
  • ✅ Compensation calculation
  • ✅ Non-compete clauses
  • ✅ Dispute resolution
• Advantages:
  • ✓ Simple formation
  • ✓ Liability limitation under PartG mbB for partners’ errors
  • ✓ Flexible internal arrangements
  • ✓ Tax transparency (no corporate income tax)
• Disadvantages:
  • ❌ Unlimited liability of all partners (GbR)
  • ❌ Treating physician remains unlimitedly liable for own errors despite PartG mbB
  • ❌ No capital raising from external investors possible
  • ❌ Minimum 2 partners required

The modern legal form for clinics & larger practice groups

• Formation:
  • Notarially certified (§ 2 GmbHG)
  • Entry in the commercial register
  • Minimum capital: EUR 25,000 (formation costs approx. EUR 500–1,000)
• Liability:
  • Liability limited to company assets
  • Personal assets of shareholders protected
  • Managing director liability pursuant to § 43 GmbHG (personal liability for breaches of duty)
• Representatives & management:
  • At least 1 natural person required as managing director
  • May be a physician or an external person
  • Managing director service agreement required
• Piercing the corporate veil (“Lifting the veil”):
  • Managing directors are personally liable for breaches of duty (§ 43 GmbHG)
  • Examples: failure to pay in share capital, profit distribution without reserves, data protection violations, delayed insolvency filing
• Advantages:
  • ✓ Liability limited to company assets
  • ✓ Financing options (loans from third parties, investors)
  • ✓ Flexible shareholder structure
  • ✓ Transparent to third parties
  • ✓ Succession planning easier
• Disadvantages:
  • ❌ Higher formation costs
  • ❌ Corporate income tax approx. 30% additionally
  • ❌ Double taxation (profits & distributions)
  • ❌ Extensive documentation obligations (annual financial statements, shareholder resolutions)

The regulated special form for multi-physician operations

• Legal basis:
  • § 95 para. 1, § 120 SGB V (licensing law)
  • § 33 Ärzte-ZV (cross-professional collaboration)
• Definition pursuant to § 95 SGB V:
  • “A medical care centre is a facility in which several physicians or members of other healthcare professions are active.”
  • Physicians must work at least 20% of their working time as employed or panel physicians in the MVZ
• Formation variants:
  • 1. Panel physician MVZ (classic model):
    • Legal form: BAG, GbR, PartG, KG or GmbH
    • Founder requirement: Only panel physicians may found
    • Employed physicians: Active at least 20% of the time
  • 2. Employment MVZ (since 2016 for non-panel physicians):
    • Legal form: GmbH or PartG mbB
    • Founder requirement: Legal or natural persons possible
    • Prerequisite: At least 1 panel-licensed physician as managing director
    • Investor model: Hedge funds, clinics, private equity possible
• Current case law:
  • BSG judgment of 26 January 2022 (Az. B 6 KA 2/21 R)
  • A physician cannot simultaneously be a shareholder with controlling influence AND an employed physician in their own MVZ
  • Reasoning: Directing the business is incompatible with an employment relationship
  • Consequence: Investors may not act as operational managing directors
  • LSG NRW & BSG (2022/2023):
  • MVZ and panel physicians are equally admitted to participate
  • No needs assessment required for MVZ licensing
  • No disadvantage for established physicians if requirements are met
• Patient base & assets:
  • Investor GmbH holds 100% of the shares in the MVZ-GmbH
  • Specialist physician is managing director + employee (no or minority shareholder)
  • Remuneration: Salary + profit participation
  • Management agreement: Medical decision-making authority with the specialist physician
• Opportunities for investors:
  • ✓ Private equity buy-ins (buy-and-build strategy)
  • ✓ Rapid scalability (acquisition of multiple MVZ)
  • ✓ Target return of 15–20% over 3–5 years
• Risks:
  • ⚠️ Regulatory uncertainty (stricter scrutiny by licensing committees)
  • ⚠️ Physician dependency (resignation jeopardises structure)
  • ⚠️ Political pressure (possible statutory restrictions)

Multi-location strategies for growing enterprises

Problem with simple structures:

• One GmbH per clinic → high administrative overhead
• No central services (HR, IT, accounting)
• Difficult refinancing & debt restructuring
• Solution: Holding structure
• Legal structure:
  • Holding GmbH holds 100% of shares in subsidiary GmbHs
  • Managing director powers of attorney at holding level for central decisions
  • Loan agreements between holding company and subsidiaries
  • Management agreements for services (property, IT, HR, etc.)
• Tax advantages:
  • ✓ Profit shifting via loan structures (interest models)
  • ✓ Loss offsetting via corporate income tax fiscal unity
  • ✓ Central transfer pricing for internal services
• Liability aspects:
  • ✓ Subsidiary GmbHs are independent legal entities
  • ✓ Holding company is in principle only liable for its own obligations
  • ⚠️ Piercing of the corporate veil possible in cases of undercapitalisation or breaches of duty by management

What MUST be included in every shareholders’ agreement?

• 1. Share capital & capital contributions:
  • Amount of share capital
  • Payment deadline
  • Additional payment obligation upon capital increases
• 2. Management & representation:
  • Who is managing director?
  • Sole representation vs. joint representation
  • Consent reservations (e.g. transactions > EUR 50,000)
• 3. Profit & loss distribution:
  • Proportional to capital shares or otherwise
  • Profit retention (reserve formation)
  • Advance withdrawals for individual shareholders
• 4. Withdrawal & succession:
  • Notice periods (e.g. 6 months to year-end)
  • Termination for good cause
  • Compensation calculation (book value, EBITDA multiple, earnings value)
  • Right of first offer/purchase for remaining shareholders
• 5. Non-compete clauses:
  • Duration: typically 3–5 years after withdrawal
  • Geographic radius (e.g. 20 km from location)
  • Compensation (e.g. approx. 25% of average income)
• 6. Dispute resolution:
  • Arbitration vs. state court proceedings
  • Mediation as a preliminary step possible

From GbR to GmbH – Tax-Neutral Conversion

• Problem:
  • GbR becomes too large or too complex
  • Unlimited liability to be eliminated
  • External investors to join
• Solution:
  • Conversion pursuant to the Transformation Act (UmwG)
• Process:
  • Shareholders’ meeting resolves conversion
  • Notarial certification & entry in the transformation register
  • Accompanied by tax advisor and lawyer
  • New entry in the commercial register as GmbH
• Tax treatment:
  • § 1 UmwG: Hidden reserves and profits are not realised
  • Continuation of business assets at book values
  • No immediate corporate income tax on hidden reserves
• Costs:
  • Notary fees: approx. EUR 500–1,500
  • Registration fees: approx. EUR 100–200
  • Tax advisor fees: approx. EUR 1,000–3,000