site.btaAssociation Warns Against Applying Public Procurement Rules to Private Hospitals

Private medical establishments are not bodies governed by public law and therefore should not be included within the scope of the Public Procurement Act, says the Bulgarian Hospital Association (BHA) in an open letter sent to the European Commission, the European Parliament, the National Assembly, the Confederation of Employers and Industrialists in Bulgaria, and the media. The BHA broke the news in a position statement made available to BTA on Wednesday.

The letter was prompted by a European Commission decision to refer Bulgaria to the Court of Justice of the European Union (CJEU) for failing to correctly transpose the EU Directive on public procurement. The Commission said it considers that Bulgarian legislation currently excludes certain privately owned medical establishments from the scope of EU procurement rules, even when they receive more than 50% of their financing from public funds. This exclusion, set out in the Additional Provisions to the Public Procurement Act, is not in line with the EU-law definition of "bodies governed by public law" and therefore restricts the scope of application of the Directive, the Commission said. The Commission first launched the infringement procedure in January 2019 and has repeatedly called on Bulgaria to bring its legislation into line with EU rules.

According to the BHA, the operative definition in national law fully complies with Directive 2014/24/EU and has been confirmed by the CJEU. The Court has clearly underlined the right of Member States to adapt their legislation in line with the specific features of their healthcare systems, the Association adds.

Applying the Public Procurement Act to private hospitals would lead to practical and systemic problems incompatible with their nature as market operators, the open letter says. These include delays and blockages in the supply of medicines and medical devices, disproportionate burdens on entities that do not receive budget funding, and a constitutional and systemic problem in the form of interference with free economic initiative.

The BHA argues that if the state considers it necessary to introduce additional safeguards for transparency without distorting the legal framework, this should be done through proportionate mechanisms such as a centralized tender by the Health Ministry for medical devices, or a requirement for at least three comparable offers to be publicly disclosed. These instruments would ensure transparency without imposing an inapplicable and harmful regime such as the Public Procurement Act, the Association adds. Bulgaria has convincing legal and factual arguments to defend before the Court the position that private healthcare establishments do not fall within the category of public-law bodies, which would be in the interest of the state, the system, and patients, the BHA further says.

Earlier on Wednesday, the Bulgarian Medical Association expressed serious concern about the intention for amendments to the Public Procurement Act affecting the status of private hospitals to be considered at second reading. The draft amendments, moved by Continue the Change – Democratic Bulgaria, passed at first reading in May. The planned changes provide for private hospitals to purchase medicines through procedures under the Public Procurement Act.