Draft law requires public hospitals to pay suppliers within 60 days

Public hospitals will have to pay their bills within a maximum of 60 days, under a draft law prepared by the Minister of Enterprise and Technology. According to experts, this could drive many providers to the wall, Dziennik Gazeta Prawna reported on 13 November.

The draft legislation, whose objective is to help address payment bottlenecks in the economy, stipulates that public entities must pay their suppliers within 30 days, with the exception of hospitals, for whom the period is set at 60 days. Importantly, it also increases sanctions for late payment.   

At the moment, public hospitals pay their suppliers even after a year. They blame insufficient and untimely funding from the NFZ. But there is also little financial disincentive against paying late. Many hospitals use long payment terms as a criterion in bid selection, knowing that their bargaining position vis-a-vis suppliers is strong. The new law could change that, as it introduces a new penalty equal to 1% of the value of the outstanding bill, as well as personal liability for purchasing managers under the Public Finances Discipline Act.