Disputes in Medical Practices and Medical Care Centers / MVZs in Germany
Are disputes involving medical care centers / MVZs suitable for commercial mediation? What issues typically arise in these disputes?
As in any company, shareholder disputes within a medical care center (Medizinisches Versorgungszentrum, or MVZ) can cause significant stress for all involved. However, these disputes raise additional complexities beyond the valuation of equity interests and the question of whether sufficient grounds exist to exclude a shareholder.
An MVZ’s authorization to provide services under the statutory health insurance system (Kassenzulassung) is held by the center itself, not by its individual physician-shareholders. Consequently, a physician who leaves the MVZ may lose the ability to treat statutory health insurance patients through that center. This raises two critical questions: how can a physician exit an MVZ, and under what conditions can they regain authorization to treat patients covered by statutory health insurance?
- Current trend: Investor involvement in MVZs can give rise to disputes;
- guidelines of the German Medical Association;
- combined valuation approach: Tangible asset value and intangible value;
- earnings-based valuation method;
- comparable transactions method;
- provisions in the articles of association.
What is the value of the medical practice?
Various valuation methods can be used to determine the value of a medical practice or MVZ. The German Medical Association has issued guidance on valuing medical practices and ownership interests on several occasions. Such valuations are particularly important in shareholder disputes within an MVZ, where determining the value of an individual’s equity interest can be a key issue.
Some valuation methods combine the practice’s tangible asset value with its intangible value, including goodwill. Others apply a modified earnings-based approach to value a medical practice or MVZ. A further method involves comparing the practice with similar practices that have recently been sold, using those transactions as a benchmark for valuing an ownership interest
When a dispute arises among MVZ shareholders, agreeing on a valuation method can become exceptionally difficult. It is therefore crucial to establish a clear valuation mechanism in the shareholders’ agreement before any conflict occurs. Investor interest in established, well-developed MVZs is growing. This trend is contributing to disputes among physician-shareholders, particularly when they disagree on the center’s future direction, whether to sell to an investor, remain independent, or pursue an alternative strategy.
In such situations, an attorney mediator with corporate law expertise can help the parties resolve their differences through mediation, preventing an investor’s offer from triggering a dispute that threatens to divide the company.
Who owns the patient relationships?
When a dispute arises among the shareholders of a medical practice or an MVZ, an important question is what happens to the patients when a shareholder leaves the company. It is often assumed that patient relationships belong to the MVZ itself. This raises the question of whether a departing shareholder can continue treating those patients independently after leaving the center.
As a general rule, patients are free to choose whether to remain with the MVZ or continue receiving treatment from the departing shareholder physician. If the shareholders’ agreement does not address this issue, the physician may be able to transfer their entire patient base to a new practice, provided they obtain the necessary authorization to treat patients covered by the statutory health insurance system.
The shareholders’ agreement should therefore include clear provisions governing competition among shareholders and safeguarding the MVZ against patient solicitation by departing shareholders.
Engaging a corporate law specialist or attorney mediator is therefore essential. Non-compete provisions are frequently contested in court and may be deemed unenforceable if drafted too broadly. As a result, these provisions may fail to provide effective protection when a dispute arises among the shareholders.