The Healthcare Law Review: Russia
Russia's current healthcare market is characterised, on the one hand, by the dominant role of public healthcare providers operating under the state-run healthcare system (the public healthcare system) and providing free-of-charge medical help and, on the other hand, by the gradual development of private healthcare providers. In practice, the public healthcare system often seems to be overburdened and underfunded, which can lead to a gap between the declared and actual possibility of obtaining all necessary medical help free of charge.
The private healthcare sector is growing and playing an increasingly prominent role in the healthcare system. Notably, the number of investment projects in infrastructure (e.g., construction of high-technology centres, and laboratory, diagnostic and medical radiation centres), including those being implemented under the public-private partnership model, is rapidly increasing in Russia.2
The development of telemedicine should also be mentioned among recent trends. On 1 January 2018, legislation regulating telemedicine entered into effect. Although the legislation currently contains a number of substantial restrictions on rendering many types of medical services,3 the telemedicine market is considered to be highly promising in Russia.
A number of changes to Russian legislation have been made because of the covid-19 pandemic and the need to take special state measures in response. These changes include, in particular, measures relating to the possibility to purchase goods, work and services (from a single supplier) without going through a bidding process in instances where a high-alert regime is introduced (such as has been introduced in many Russian regions during the pandemic), in addition to cases of force majeure and the adoption of legislation relating to the online sale of drugs (which has been discussed since 2017). The government of the Russian Federation has the right, until 31 December 2020, to establish new grounds for purchasing from a single supplier and to determine the procedure for these purchases. The position being taken by the Federal Antimonopoly Service is that the covid-19 pandemic shall be treated as force majeure for the purpose of public procurements, meaning that it is possible to purchase goods without tender, although it is important to establish the causal relationship between the purpose and the subject of procurement from a single supplier.
Certain changes have been introduced in regional legislation to help deal with problems arising because of the pandemic, to provide citizens with the medical help (e.g., some state primary healthcare institutions have been transformed into temporary special covid-19 medical centres, and new procedures for routine medical help have been adopted) and with respect to certain healthcare employees who, among other things, have been obliged to undergo special forms of training and to obtain certificates that confirm their capability to work with covid-19 patients.
The healthcare economy
In broad terms, the Russian healthcare ecosystem consists of various actors, depending on the type of activities they perform. Each type of key activity (healthcare services provision, pharmaceuticals provision, medical equipment and devices provision, etc.) is subject to a specific regulatory regime and has its own peculiarities. In this chapter we will mainly focus on a general overview of Russian healthcare law in terms of medical services provision.4
The fundamental right to health protection is provided by the Constitution.5 Thus, according to Article 41 of the Constitution:
- everyone has the right to health protection and healthcare;
- healthcare in state and municipal health institutions for individuals must be free, at the expense of the relevant budget, insurance contributions and other funds;
- federal programmes for the protection and improvement of the population's health shall be financed by the state;
- measures shall be taken to develop state, municipal and private health services; and
- efforts that facilitate the improvement of health, development of physical culture and sport, and ecological and sanitary–epidemiological well-being shall be promoted.
In 2020, the Constitution of the Russian Federation has been amended and now Article 72 directly stipulates that the joint jurisdiction of the Russian Federation and the constituencies of the Russian Federation includes, in particular:
- coordination of healthcare issues, including ensuring the provision of affordable and high-quality medical care;
- maintaining and strengthening public health;
- creating conditions for maintaining a healthy lifestyle; and
- forming a culture of responsible citizens' attitude to their health.
One of the key pieces of legislation regulating the healthcare sector is Federal Law No. 323-FZ on the Basics of Health Protection of Citizens in the Russian Federation, dated 21 November 2011 (the Healthcare Law).
Foreign citizens living and staying in the territory of the Russian Federation have a right to medical care in accordance with the Russian legislation and relevant international treaties to which the Russian Federation is a signatory.
The Ministry of Healthcare (MoH) is the main regulatory body for the sector, responsible, for, among other things, the execution and evaluation of national health policy, regulation and oversight of healthcare services and activities developed by the private sector.6 The Federal Service for Surveillance in Healthcare (Roszdravnadzor) is the enforcement authority that, in particular, oversees the quality and safety of medical activity and the turnover of medicines.7
ii The role of health insurance
The Russian healthcare system has a highly complex nature and is based on a budget–insurance financing model.8
According to Article 19 of the Healthcare Law, everybody has the right to receive (1) medical help to the extent guaranteed under the programme of state guarantees for the free-of-charge provision of medical care to citizens (the State Guarantee Programme) and (2) paid-for medical services, and other services such as those provided under a voluntary medical insurance (DMS) contract.
The principal legislation regulating compulsory medical insurance (termed 'compulsory health insurance' (OMS)) is Federal Law No. 326-FZ, dated 29 November 2010, on Compulsory Medical Insurance in the Russian Federation (the OMS Law). The OMS is a type of compulsory social insurance aimed at providing guaranteed free-of-charge medical help to insured persons. This help is paid for from OMS funds, within the limits of the particular OMS territorial programme (the Territorial OMS Programme) and, where stipulated by the OMS Law, within the limits of the basic OMS programme (the Basic OMS Programme).
The Basic OMS Programme9 is approved by the government and stipulates the following:
- the types of medical help available (including a list of high-tech medical help);
- a list of insured events;
- the tariff structure for medical service payments and means of payment; and
- medical help access and quality criteria.10
The Basic OMS Programme guarantees the same rights to insured persons within the whole Russian territory and establishes the requirements for the Territorial OMS Programme, which must be adopted in every Russian constituency.11
The Basic OMS Programme covers primary healthcare, prophylactic help, emergency medical help, specialised medical help (including high-technology help) and other areas. Territorial OMS Programmes may include types of help, and terms, in addition to those provided by the Basic OMS Programme. The extent of medical help, and tariffs, vary from region to region depending on the specific situation in the region and availability of funds.
Healthcare providers under the Territorial OMS Programme may be either public healthcare institutions or private companies (the latter should be included in the applicable register of organisations providing help under the OMS regime).
It is important to note that the structure of medical help tariffs is strictly regulated by Article 35 of the OMS Law, which sets out a list of permitted expenditures (including, in particular, salaries, purchases of medicines, costs for provision of laboratory services where a medical organisation does not have laboratory and diagnostic equipment, transport and lease costs, costs for operation of the property, and other expenditures).
It should be noted that currently the OMS tariffs do not cover any capital expenditures and, depending on the type of medical help, may differ significantly from the market prices.12
iii Funding and payment for specific services
In practice, most visits to doctors and basic diagnostic tests are free. Owing to mismatches between supply and demand under the public healthcare system, waiting lists for some types of services are often long (e.g., surgery or consultations for certain medical specialities). The dental package offering under the State Guarantee Programme is often limited in practice and many people opt for private dental medicine.
Certain types of beneficiaries (e.g., infants and adolescents, pregnant women, the elderly, and AIDS and HIV patients) are entitled to a number of additional rights with respect to provision of medical services on a free-of-charge basis.
Wellness services and alternative therapies are not covered by the state-run healthcare programmes and are usually funded by individuals themselves.
In some cases, citizens are entitled to pharmaceutical products free of charge (e.g., if pharmaceuticals are included in the approved list of essential medicines) or with a 50 per cent discount (e.g., retired pensioners receiving help at the ambulatory care level).
Primary/family medicine, hospitals and social care
Provision of primary healthcare to the adult population is regulated by Order No. 543n of the MoH.13 Primary healthcare includes measures for the prevention, diagnosis and treatment of diseases, medical rehabilitation, monitoring of pregnancy, the formation of a healthy lifestyle and the sanitary hygiene of the population. Primary healthcare is provided by medical and other institutions of the state, municipal and private systems of healthcare, and by individual entrepreneurs with a medical licence.
The Healthcare Law envisages different types of primary healthcare (pre-doctor, doctor, specialised). Primary healthcare is usually provided as outpatient care (ambulatory care) and day inpatient care.
In the context of OMS-related services, the key primary healthcare provider is a multi-speciality facility (polyclinic) combining doctors of different specialisations.14 Polyclinics often operate under the legal form of state-budget healthcare institutions. Polyclinics provide mostly primary (including specialised) care for non-communicable diseases, preventive and palliative care.
Primary doctor healthcare is provided by general physicians, district general physicians and general practitioners (family doctors). There are plans to further develop the institution of general practitioners and general practice medical nurses in Russia.
The social care sector is governed by a separate federal law, Law No. 442-FZ on the Fundamentals of Social Services for Citizens in the Russian Federation, dated 28 December 2013, and by other legislative acts.
The licensing of healthcare providers and professionals
Licensing of different types of activities is governed by Federal Law No. 99-FZ on Licensing Specific Types of Activities, dated 8 August 2011, and subordinate legal acts. As a general rule, medical activity (except for specified activities carried out by medical organisations and other organisations within the private healthcare system in the territory of the Skolkovo Innovation Center), the use of ionising radiation sources, production and technical operation of medical equipment, the use of pathogens of infectious diseases of humans and animals (with the exception if this activity is carried out for medical purposes) and genetically modified organisms of certain degrees of potential danger are subject to licensing.
Roszdravnadzor, which is subordinate to the MoH, carries out licensing of:
- medical and other organisations subordinate to the federal executive bodies;
- organisations of federal executive bodies, in which military and equivalent service is done in accordance with federal laws; and
- medical and other organisations engaged in providing high-tech medical care.
Authorised executive bodies of the Russian constituencies15 carry out licensing of:
- activity of medical and other organisations, except for those whose activities are licensed by Roszdravnadzor; and
- individual entrepreneurs.
ii Institutional healthcare providers
The procedure for obtaining a medical licence is regulated by Decree No. 291 of the Government of the Russian Federation, dated 16 April 2012 (the Decree).
The establishment and operation of a medical organisation depends on the provision and maintenance of relevant licences and other approvals. To obtain a medical licence, the applicant must confirm, in particular, that it has relevant premises, medical equipment, and internal control of the quality and safety of medical activity. The Decree also specifies requirements related to staff and management of medical organisations. The licensing authority must review the application within 45 working days of the submission date and decide to issue or refuse the licence. Licences issued for medical activities are valid for an unlimited time.
In addition to criminal and civil liability, and any other administrative sanctions that may apply, the carrying on of a medical activity by a legal entity without a licence or in breach of licensing requirements is an administrative offence punishable with different sanctions depending on the subject, type and gravity of the breach. Fines can range from 30,000 Russian roubles to 250,000 roubles.16 Depending on the gravity of the breach, suspension of the activity of the healthcare unit for up to 90 days may apply. Failure to carry out the licensing procedure may result in the liquidation of the healthcare organisation.
iii Healthcare professionals
According to Article 69 of the Healthcare Law, only individuals who have completed medical education or other education in the Russian Federation in accordance with the federal state educational standards and hold a specialist's accreditation certificate are allowed to pursue medical practice in Russia.
Accreditation of specialists (which should be done no less than once every five years) is regulated by Order No. 334n of the MoH.17
Individuals who have completed medical education in foreign states are admitted to pursue medical practice or pharmaceutical activities based on compliance with certain requirements established by law (after recognition in Russia of the education or qualification received in a foreign state according to the established procedure, or unless otherwise envisaged by international agreements to which Russia is a party).
The Healthcare Law stipulates that medical organisations, medical professionals and pharmaceutical workers are responsible for harm to life or health caused during the provision of medical care to citizens.18 The harm caused to life or health of citizens during the provision of medical care must be compensated by medical organisations in the amount and manner established by legislation. The obligations of healthcare professionals are established in Article 73 of the Healthcare Law, which provides that they shall perform medical activity in accordance with Russian legislation and be guided by the principles of medical ethics19 and deontology.
As regards civil liability, the Russian Civil Code provides a compensation regime for harm to citizens' life and health caused by performance of contractual and other obligations. According to Article 1085 of the Russian Civil Code, in cases of harm or damage to health, the earnings or income that the injured person lost, or to which he or she would definitely have been entitled in the absence of the injury, shall be reimbursed. In certain cases, the injured person has a right to additional expenses compensation (including expenses for treatment, purchasing medicines, etc.).
As regards criminal liability, different provisions of the Russian Criminal Code may apply to healthcare professionals; these include provisions regarding failure to render help to a sick person (Article 124), infliction of death by negligence (Article 109), infliction of grave injury by negligence (Article 118), neglect of duty (Article 293) and rendering of services that do not meet safety standards (Article 238).20 Most of the above-mentioned Articles provide for sanctions of imprisonment for up to four years with disqualification for up to three years, among other penalties.
Ownership of healthcare businesses
Healthcare institutions under public ownership (e.g., state-budget healthcare institutions) currently represent the largest part of all healthcare providers in Russia, although the number of private medical organisations is constantly increasing.
The private medicine market in Russia is characterised by a low degree of consolidation. Most of the current market is taken by commercial departments of state medical institutions, as well as thousands of small private clinics and offices. However, there are a number of large holdings successfully operating in Russia in the area of private medicine (including in the DMS sector), mostly in the area of multi-profile, laboratory and reproductive-related activities.
As mentioned above (see Section IV.ii), the establishment and operation of a healthcare organisation depends on compliance with different licensing and other requirements. In addition to technical operating requirements, healthcare providers must also comply with safety, hygiene, public health and other requirements.
According to current legislation, there are no particular restrictions regarding the nationality of private healthcare business owners.
Commissioning and procurement
The process related to public purchases in the health sector (e.g., supply of medical devices, equipment, pharmaceuticals and some types of medical services) is regulated primarily by Federal Law No. 44-FZ21 and Federal Law No. 223-FZ,22 applicable to public healthcare providers depending on their type of organisational form. There is a single information platform for procurement in the public sector containing updated information on the existing goods and services under public procurement contracts, ongoing public tenders and other information.23
Generally, tender rules apply, although the legislation provides an opportunity to use other procurement methods or a single-supplier procedure.24 Note that some restrictions may apply to foreign companies willing to participate in tenders under Federal Law No. 44-FZ, although some of the prohibitions or limitations do not apply to suppliers coming from the Eurasian Economic Union Member States.
As a general rule, the determination of the winner is based on the value of the contract (i.e., by the maximum value of the economic benefit that can be obtained by the contractor, depending on the procedure adopted); however, certain exceptions apply to healthcare-related procurements.
It is possible to challenge procurement decisions either at the administrative level (e.g., through the Federal Antimonopoly Service (FAS)) or the judicial level.
Marketing and promotion of services
Advertising issues are governed by Federal Law No. 38-FZ on Advertising, dated 13 March 2006 (the Advertising Law). Where competition issues are concerned, in the absence of specific rules applicable to the healthcare sector, the general rules of Federal Law No. 135-FZ on the Protection of Competition, dated 26 July 2006 (the Competition Law), will apply. The FAS is the regulatory body with responsibility for enforcing compliance with competition and advertising legislation.
The Advertising Law provides detailed rules for advertising medicines, medical services and medical devices, including, in particular, the following restrictions:
- advertising must not give an impression that it is unnecessary to visit doctors;
- advertising must not contain allegations or assumptions that consumers have certain diseases or impairments of health; and
- advertising must not contribute to making an impression of the necessity for a healthy consumer to use the advertised item.
Advertisements must not guarantee a positive effect, safety, effectiveness or lack of side effects. The advertisement must contain a warning about contraindications to the advertised product's use, and about the necessity for patients either to familiarise themselves with instructions or to receive expert advice.
Note that a bill banning advertising of medicines and medical services in children's television and radio programmes was submitted to the State Duma in July 2019.
Future outlook and new opportunities
In accordance with Presidential Decree No. 204 on the National Aims and Strategic Goals for Development of the Russian Federation up to 2024, dated 7 May 2018, the National Healthcare Project (NHP) was developed by the MoH for the period 2019–2024. The NHP aims to achieve, in particular, the following national goals: ensuring sustainable natural growth of the population of the Russian Federation and increasing life expectancy to 78 years by 2024, and 80 years by 2030.
The NHP represents one of the key Russian healthcare policy documents and provides the following eight sub-projects:
- development of primary healthcare;
- control of cardiovascular diseases;
- control of oncological diseases;
- development of children's healthcare, including the creation of a modern infrastructure for provision of medical care to children;
- staffing of healthcare organisations with qualified personnel;
- development of a network of national medical research centres and the introduction of innovative medical technologies;
- creation of a single digital circuit in healthcare on the basis of a unified state health information system;25 and
- development of export of healthcare services.
The NHP includes a detailed description of the planned measures to be undertaken with respect to each subsector. It is expected that future development of the Russian healthcare system will be focused on these areas.
The total estimated budget for the implementation of the NHP is around 1.7 trillion roubles. For the purpose of implementing the NHP, the Russian state-budget programme now includes the rules for provision of subsidies for different projects falling within the NHP.26 There are plans to spend around 550 billion roubles on modernisation of primary healthcare between 2020 and 2025.
The process of digitisation of the Russian healthcare system and the development of telemedicine and other information technologies will continue. To raise quality and improve accessibility for medical help, centralisation of certain types of medical services and expansion of private healthcare providers, as well as development of different types of investment projects in the sector, may also be expected in the upcoming years.
Russian healthcare law is complex and consists of many pieces of legislation, each governing a particular healthcare subsector. Significant reforms have been carried out by the Russian government in recent years with respect to modernisation of the Russian healthcare system and the related legislation. However, a number of challenges have yet to be overcome, both at the federal and regional levels. Some issues hindering the mass implementation of investment projects are still in place, although there are plans to continue developing a legal framework to attract more investors in the Russian healthcare sector.
1 Lola Shamirzayeva is an associate at Herbert Smith Freehills CIS LLP.
2 For more information about public-private partnership regulation in Russia, see the Russia chapter in The Public-Private Partnership Law Review (Law Business Research, 2020), by Olga Revzina, Roman Churakov and Lola Shamirzayeva.
3 e.g., according to current legislation, telemedicine cannot be used for making a diagnosis, prescribing treatment, or correcting treatment by a doctor other than the attending physician.
4 This chapter does not cover life sciences, pharmaceutical, biotechnology and medical device issues, nor transplantation, donorship and other specific topics.
5 The Constitution of the Russian Federation, dated 12 December 1993.
6 Regulation of the medical devices and equipment sector, as well as production of pharmaceuticals, fall within the competence of the Ministry of Industry and Trade of the Russian Federation. One key piece of legislation in this area is Federal Law No. 488-FZ on the Industrial Policy of the Russian Federation, dated 31 December 2014.
7 Note that, according to Presidential Decree of 21 January 2020 No. 21, Roszdravnadzor operates under the administration of the Ministry of Healthcare.
8 Under this model, some types of medical help are subject to financing from the Federal Fund of Medical Insurance and its related territorial funds while others are financed from the state budget.
9 The Basic OMS Programme is part of the State Guarantee Programme.
10 See Article 35 of Federal Law No. 326-FZ, dated 29 November 2010, on Compulsory Medical Insurance in the Russian Federation.
11 Russia is a federative state with 85 constituencies.
12 Exceptions often relate to high-technology types of services and some others.
13 Order No. 543n of the Ministry of Healthcare (MoH), dated 5 May 2012, on the Approval of the Regulations on the Organisation of the Provision of Primary Healthcare to the Adult Population. Provision of primary healthcare to children is regulated by MoH Order No. 92n, dated 7 March 2018.
14 Polyclinics for adults and children are separate.
15 For example, in Moscow, the licensing entity is the Moscow Healthcare Department.
16 Articles 14.1.2 and 19.20 of the Russian Code for Administrative Offences.
17 Order No. 334n of the Ministry of Healthcare on the Approval of the Regulation on the Accreditation of Specialists, dated 2 June 2016. The transition from the procedure of certification to accreditation of specialists (with a more complex set of requirements) is to be carried out in a number of stages from 1 January 2016 to 31 December 2025 inclusive.
18 The rights of patients as consumers of paid-for medical services are regulated by Federal Law No. 2300-1 on Consumer Protection, dated 7 February 1992, allowing patients to protect their rights under consumer protection legislation.
19 See 'The Code of Professional Ethics of Doctors of the Russian Federation' (adopted by the First National Conference of Russian Doctors, 5 October 2012).
20 Overall, the practice of finding healthcare professionals criminally liable in accordance with these Articles is haphazard, although the number of criminal cases opened has increased in recent years. There are many terms in medical legislation that are not clearly determined ('doctor's fault', 'defect of medical care', etc.), which in turn leads to different interpretations in the courts.
21 Federal Law No. 44-FZ on the Contract System in State and Municipal Procurement of Goods, Works and Services, dated 5 April 2013.
22 Federal Law No. 223-FZ on the Purchase of Goods, Works and Services by Certain Types of Legal Entities, dated 18 July 2011.
24 For more information about the regulation of government procurement in Russia see the Russian chapter in The Government Procurement Review (Law Business Research, 2019), by Olga Revzina, Lola Shamirzayeva and Olga Vasilyeva.
25 It should also be noted that, overall, a lot has already been done in Russia with respect to digitisation of the healthcare system, including in state healthcare institutions (introduction of systems of electronic appointments, electronic medical records, electronic prescriptions for medicines, etc.), and this process is ongoing in the Russian medical sector.
26 See Regulation No. 34 of the Government of the Russian Federation, dated 24 January 2019.