Italian health-care supplier companies suffering from delay in payments
2012-11-28 19:07:08 - Two years after it was announced that health-care authorities in Italy settle their bills with medical suppliers after an average period of 278 days; these same authorities find the spotlight on them once again after it has been revealed that they have gotten no better at paying their suppliers.
With other EU countries seeing much shorter delays in payments in regards to the health-care sector, the widespread problem in Italy has been brought to the forefront. In 2010 for example, whilst Italy’s average late settlement period was almost 300 days, Germany’s average was just 30 days, and the United Kingdom’s health-care authorities paid their bills with an average of
only a 45-day delay.
Assobiomedica, an Italian trade group for suppliers of medical equipment have recently declared that approximately 250 members of their association are awaiting payments equal to €5.6 billion. One Assobiomedica member – Bellco, a company which produces equipment for dialysis; have made their own plight public in order to demonstrate the severity of the situation. Bellco have revealed they have been waiting for payments to be made on goods which they sold as far back as 2009; meaning the clock has been ticking along for three years without debts being paid.
The Italian association Farmindustria meanwhile, which is composed of 200 pharmaceutical member firms, have disclosed that their members are still waiting for an estimated €4 billion in unpaid bills.
The differences between countries may come as no surprise, but it also seems that there is also a noticeable difference which exists between the various regions of Italy. The pattern demonstrates that the further south the region; the longer it is a company will have to wait to get paid. Regions such as Valle d’Aosta and Friuli for example, clear their debts within around three months; whereas the southern regions of Calabria and Molise take about two years to settle their bills.
The situation is so dire that the European Commission issued a notice to Member States in April this year, after three different petitions were submitted on the subject of late payment of companies operating in the health-care sector in Italy. In the note, the EC confirmed that although Directive 200/35/EC on late payment had been transposed correctly in Italy, “the late payment in commercial transactions is still a general problem within the EU (including in Italy) and that the economic crisis is making the situation worse”.
They underlined the fact that a newer directive, Directive 2011/7/EU on combating late payment in commercial transactions was adopted in February 2011 which contains stricter provisions. The most interesting new provision is one which obligates payment for goods purchased be made within 30 days; although Member States have been given the option of extending this payment period up to a maximum of 60 days for public undertakings and public entities providing healthcare. It must also be noted that the Directive does not prohibit contracts between businesses from setting a deadline of more than 60 days, if expressly agreed between the parties, and not grossly unfair.
Seeing as Member States have been given until the 16th March 2013 to transpose this new directive into their National law however, it surely provides little comfort to the businesses affected by severely delayed payments. This is especially so for small Italian firms, which are more likely to suffer graver consequences as a result, such as banks being less likely to be prepared to finance them with reasonable interest rates. Repercussions such as these could spell the end for some small businesses.
The European Commission itself, acknowledged that the magnitude of late payments together with its negative effects is especially damaging to the small and medium-sized firms. As a result of this particular concern, they invited Member States to consider voluntary early transposition of the Directive, “as an important means for nurturing a culture of prompt payment within the European Union”.
This is only a suggestion however and so it remains to be seen if the European Commission’s note will have any visible effect on the bleak state of unpaid debts for health-care suppliers in Italy, and all over Europe.
Avv. Gabriele Giambrone commented, “The current average delay of payments in Italy’s health-care sector is staggering. The state’s health-care authorities should be setting an example to private companies that national and European law which regulates late payment must be followed. When goods or services are provided, the payment for such goods or services needs to be made within a reasonable amount of time in accordance with the law and good business practice. With the current state of our economy, Italy cannot afford to have businesses closing down as a result of late payment and this is exactly what will happen to many small and medium enterprises who will find it increasingly hard to finance their company without being paid by their clients. Something more than an invitation for early transposition of the new Directive needs to be done, and hopefully the EU will give this matter the priority it is due.”
Have you been affected by late payment for goods and services you have provided? If so, and you would like some legal advice on the matter, contact our law firm Giambrone Law ILP.
Iain James Buchan
Avv. Gabriele Giambrone
Giambrone Law ILP
Largo Antonio Sarti, 4
00196, Rome, Italy
T: +44 (0) 870 111 2158
+39 06 326 498
F: +39 06 322 4233