Switzerland: New licensing law passed for outpatient service providers and professionals - Are EU doctors being unlawfully discriminated against?

As of 1 January 2022, new regulations apply in Switzerland for outpatient services covered by mandatory health insurance (MHI). This affects all healthcare professionals, including doctors who wish to practice in Switzerland.

The purpose of the new regulation is to increase the requirements for healthcare professionals and thus to improve the quality and efficiency of their services at the expense of the MHI. The purpose of these provisions is different from the obligations on the cantons to limit the number of physicians working at the expense of the MHI according to specialty or region.

To understand the implications, it is important to distinguish between the professional or operating authorisation and the social security-related licence. The latter gives the right to bill at the expense of the MHI. The authorisation to practice medicine under one's own professional responsibility is a necessary, but not sufficient, condition for a licence. In addition to being authorised to practice, healthcare professionals must also be licensed if they wish to provide their services at the expense of the MHI. The cantonal health authorities are competent for issuing both, the licence and the authorisation to practice.

The new licensing law imposes stricter requirements on physicians who wish to work at the expense of the MHI. In particular, this affects foreign doctors and the organisations that employ them, namely outpatient medical facilities and clinics. It is no longer possible for foreign doctors to work directly at the expense of the MHI, either in their own practice or as an employee of an outpatient clinic, even if they have a recognised specialist title. Instead, the new law requires that all physicians have worked for at least three years in their chosen specialty at a recognised practical training centre in Switzerland. This requirement that physicians must first gain practical experience in Switzerland makes it impossible for foreign doctors to start their practice directly at the expense of the MHI. Another restriction is the requirement to provide proof of adequate language skills (C1 according to the Common European Framework of Reference for Languages). In addition, a new application for admission must be submitted each time the canton of residence is changed. Each new application requires a new, independent and costly review of the admission requirements. According to the FOPH, the simplified procedure provided for in the Federal Law on the Internal Market is not available in this context.

These new requirements do not apply to healthcare professionals who were already subject to the MHI when the new licensing law came into force, provided they do not change cantons.

Concerns about compatibility with the Agreement on the Free Movement of Persons

Concerns about the compatibility of the new licensing law with the Agreement between Switzerland and the EU on the Free Movement of Persons with the EU (FMPA) were already raised during parliamentary deliberations. After the law came into force, several cantons expressed fears that it could lead to an undersupply of doctors in certain medical specialties. Just five months after the new licensing law came into force, parliament took up these concerns and submitted a parliamentary initiative that would allow the cantons to grant temporary exemptions from the three-year experience requirement. This exemption is limited to four specialties: primary care, paediatrics and adolescent medicine, child and adolescent psychiatry and psychotherapy, provided there is evidence of a shortage. The proposed amendment has reignited doubts about the compatibility of the new Swiss licensing law with the FMPA. These doubts reached a new peak with the Federal Council's response to the parliamentary initiative. The Federal Council has left open how the courts will rule on the new licensing provisions and its compatibility with the FMPA. However, for reasons based on Swiss-European policy, the Federal Council is of the opinion that the new Swiss licensing law does not comply with the requirements of the FMPA and therefore must be amended:

"An FMPA-compliant regulation in Article 37 of the Swiss Healthcare Act, as demanded by the EU, would require a fundamental rethink of the regulatory content." 

Amending the licensing law would require a change in the federal law, which is the competence of parliament. The Federal Council has called on parliament to act. Its request is a thinly veiled indication that the current licensing regime may violate the FMPA. The Federal Council's concerns are confirmed by the EU Commission's request, which cited a violation of the principle of non-discrimination and called on Switzerland to adopt an FMPA-compliant regulation on the admission of doctors to work at the expense of the MHI.

How could this happen?

Because of its central role in the MHI system, the Federal Council considered it necessary for doctors to have the necessary knowledge of the Swiss healthcare system. Accordingly, the Federal Council's draft of a new licensing law required doctors to demonstrate that they had sufficient knowledge of the Swiss healthcare system to ensure the quality of their services. This would require an examination in the official language of the canton. The draft provided that doctors could be exempted from the examination if they had "worked for at least three years in a recognised practical training centre in Switzerland". There was no provision for a separate language requirement beyond this. Nor did the draft provide for a general obligation to have already worked in Switzerland before starting the practice at the expense of the MHI. The purpose of the requirement to have worked in Switzerland for three years was limited to exempting the doctors from the examination to demonstrate their knowledge of the Swiss healthcare system.

From this requirement, which the Federal Council had proposed as an exception, parliament made it a general rule that all doctors must have worked for at least three years in their chosen specialty at a recognised Swiss practical training centre. Parliament has also required doctors to prove their competence in the language of the region in which they practice and to pass a language examination to be taken in Switzerland. This does not apply to doctors who have obtained their Swiss Matura or a Swiss or recognised foreign medical diploma in the relevant language.

As a result of these changes made by parliament, the requirements that physicians must fulfill in order to be admitted to practice at the expense of the MHI have changed fundamentally.

As far as can be seen, at no time did parliament consider whether the amendments that it made to the Federal Council's draft were compatible with the requirements of the FMPA. Although there are indications that compatibility with the FMPA was discussed in parliamentary deliberations, but the Commission was not convinced so that it did not draw the necessary conclusions, see the statement of Hans Stöckli, member of the Council of States, on the discussions in the Commission:

"We also discussed compatibility with the Agreement on the Free Movement of Persons. The Federal Council expressed certain doubts as to whether the majority solution was compatible with this agreement".

Parliament based its decision on a ruling by the Swiss Federal Administrative Court concerning the effects of the FMPA on the licensing of foreign doctors in Switzerland. However, this ruling is of limited relevance because it concerned a specific admission control regime designed to limit the number of doctors practicing in Switzerland at the expense of the MHI, and thus a different set of facts. In that ruling, as in others, the admission control was justified as a temporary solution, since it was enacted for a limited period of time to act as a "provisional emergency brake" to "limit the expected sharp increase in the number of doctors from the EU" and to slow down the feared increase in health care costs and health insurance premiums. This is in contrast to the new licensing law, which is designed for the long term and is not intended to serve as an admission control system. Therefore, this decision, which is considered by parliament to be authoritative, is not relevant in assessing whether the licensing regulations comply with the FMPA. Rather, the restrictions imposed on foreign doctors by the new licensing law must be examined independently. This applies in particular to the requirement to work three years at a training centre in Switzerland, the language skills requirement and the need to apply for a new licence each time a doctor moves to another canton.

The exceptions provided for in the parliamentary initiative have increased doubts about its legality. In particular, the choice of specialties to be exempted seems arbitrary. The fact that there is now a temporary exception to the three-year activity requirement also confirms the doubts about the proportionality of the measure.

What are the practical consequences?

Switzerland's new licensing law gives the impression of being an ill-conceived patchwork, which is confirmed by the parliamentary initiative submitted just a few months after it came into force. It does not take sufficient account of the shortage of health professionals in Switzerland.

Doctors from an EU member state can challenge these new requirements and claim a violation of the FMPA. This applies in particular to the requirement to work for three years at a Swiss training centre, but also applies to the need to obtain a new licence when moving to another canton. The courts will have to assess the public interest served by these restrictions and their proportionality. In this context, the parliamentary initiative and the Federal Council's response, which confirm the existing doubts as to the compatibility of the new licensing law with the FMPA, must also be taken into account.

For more information on the impact of the new Swiss licensing law on outpatient care providers, especially physicians interested in practicing in Switzerland, contact your CMS client partner or the local CMS experts.