The Czech Constitutional Court (“the Court”) struck down the procedure for determining insurance reimbursement amounts for medical devices on 7 June 2017, rendering it ineffective as of 1 January 2019. Under the Czech Act on Public Health Insurance (“the Act”), the insurance reimbursement amounts for medical devices such as wheelchairs, pacemakers or hearing aids are unilaterally set by insurance companies, based on very general and vague criteria set out in the Act. The difference between the reimbursement amount and the full price of the device is then borne by the patient as a co-payment cost. The process of setting reimbursement amounts by insurance companies has been consistently criticised as arbitrary and lacking transparency, mainly because all stakeholders (patients, manufacturers and distributors) have been excluded from participating in the decision making.

The Court ruled the Act violated the constitutionally guaranteed rights of patients, who are entitled to free healthcare under the Czech Charter of Fundamental Rights and Freedoms (“the Charter”). Although the Charter leaves it to ordinary laws to determine the specifics of how the right to free healthcare will be implemented, the Court found the Act so vague that it effectively delegated defining the basic parameters of the right to free healthcare to the insurance companies. Such an approach was deemed incompatible with the rule of law, especially with the principle that fundamental human rights may only be subject to limitations prescribed by law.

A similar breach was found with regard to distributors and manufacturers of medical devices, whose right to freely conduct business was violated by the arbitrary determination of reimbursement amounts on insurance companies’ price lists. Under the current procedure, similar or substitutable devices were often assigned different reimbursement amounts or denied reimbursement from public insurance altogether, drastically reducing their sales and skewing competition.

The Court postponed the effectiveness of the ruling until 1 January 2019, giving the legislator almost 18 months to pass new, better legislation. Although the Court cannot directly influence the new legislation, the ruling does indicate that in order to be constitutional, the new procedure should be transparent and allow the result to be challenged by the affected stakeholders. Moreover, associations of medical professionals should be engaged to ensure that reimbursements are in-line with the current scientific standards of medical care.