Medical Facility Reorganization and Medical License: Apply for a New One or Update the Existing License

Reorganization processes are a common part of development for state, municipal, and private medical facilities alike. Businesses merge, change their structure or ownership, expand, or optimize operations. For entities engaged in licensed activities, each such change is not merely a corporate decision but a direct risk to the legality of continued operations.

A medical license is tied to a specific business entity, the list of medical specialties, locations where services are provided, the material and technical base, and personnel. In the event of reorganization, the legal entity, its structure, asset base, or control may change. Without proper legal formalization, this can call the validity of the license into question or become grounds for its revocation.

In this article, we explain which legal steps must be taken to preserve the validity of a medical license after reorganization. We analyze when it is sufficient to introduce amendments and when a new license must be obtained in order to avoid losing National Health Service of Ukraine funding and to prevent regulatory sanctions.

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Why This Issue Matters for Municipal Healthcare Providers and Private Clinics

This issue is especially relevant for healthcare institutions undergoing transformation as part of ongoing healthcare reform. Municipal non-commercial enterprises are actively changing their legal and organizational structure, merging, being consolidated, or transferred under new management. In this context, the risk of losing a medical license, suspending clinical operations, or encountering issues with the National Health Service of Ukraine becomes particularly high.

Private medical centers, clinics, laboratories, and dental practices that are going through reorganization or corporate restructuring face similar challenges. They must clearly understand when a new medical license is required and when updating an existing license is sufficient. Failing to make this distinction can lead to service interruptions and regulatory penalties.

What Constitutes a Reorganization of a Medical Facility

Reorganization is a form of termination or transformation of a legal entity in which its rights and obligations are transferred to another legal entity by way of legal succession. Unlike liquidation, reorganization does not mean the cessation of activity as such. Instead, it предусматривает continuation of operations in a different organizational, managerial, or legal form.

Ukrainian legislation recognizes several core forms of reorganization:

• merger
• accession
• division
• spin off
• transformation.

As a result of these changes, a new legal entity may be created or the status of an existing one may change, with all rights, assets, contracts, and obligations of the predecessor transferring to the successor entity.

From a licensing perspective, the critical issue is that the business entity holding the license changes. Even if the medical institution continues operating in the same premises, with the same staff and equipment, it may legally be considered a different clinic that is not entitled to operate under the previous license. In such cases, amendments to the licensing documents or the issuance of a new license are required.

It is also important to distinguish reorganization from purely organizational changes, such as a change of director, address, or name. While these may not constitute reorganization in the strict legal sense, they can still affect the licensing status and require proper notification or updates to the licensing registry.

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How Reorganization Affects an Existing Medical License (the Ministry of Health)

Reorganization effectively resets the legal status of a medical institution. Because a medical license is individual and inseparably linked to a specific legal entity, its rights and obligations, and its organizational structure, any change to the license holder’s legal status requires immediate regulatory action.

During reorganization, not only do the constituent documents change, but also the actual conditions under which medical activities are carried out, including:

• the management structure;
• subordination arrangements;
• ownership of assets;
• responsible persons.

Even if operations appear uninterrupted in practice, with the same doctors, premises, and equipment, from a legal perspective fundamental changes take place. The holder of the licensing rights and obligations changes, along with the conditions monitored by the Ministry of Health:

• the address of business activity;
• the composition of personnel, management;
• the material and technical base or the list of medical specialties.

All of these factors directly affect compliance with licensing requirements. If they are not properly documented and reflected in the licensing records, the regulator may consider the activity non-compliant, even if the quality of medical services remains high.

Without proper legal formalization, reorganization creates significant regulatory risks, even when the provision of medical services has not been interrupted in practice.

New License or Amendment: How to Choose the Right Path

This is the most complex legal issue in the reorganization process, and the cost of error here is the highest.

The basic rule is straightforward. A medical license is issued to a specific business entity identified by its EDRPOU code. If, as a result of reorganization, the original entity is terminated and a new one is created, a new license is generally required. However, there are important exceptions related to legal succession.

To determine which path to choose, it is necessary to analyze the nature of the changes against three key criteria:

1. Legal entity: Has the EDRPOU code changed, and is the new entity a full legal successor to the previous one?
2. Operating conditions: Do the clinic locations, staff composition, equipment, and list of medical specialties remain unchanged?
3. Transfer act: Has the transfer of the right to use the license and the material and technical base been properly documented?

If the actual operator has changed and a new legal entity has been created, but you limited your actions to merely submitting a notification of changes, the Ministry of Health may consider your operations unlawful. This can result in license revocation, fines, and the suspension of medical practice.

For this reason, every case of medical institution reorganization requires an individualized legal analysis.

Step-by-Step Procedure for Amending a Ministry of Health License After Reorganization

In the event of a medical institution reorganization, once the corporate procedures have been completed, including updates to the Unified State Register, approval of the constituent documents, and formalization of legal succession, the licensing documentation must also be brought into compliance. The process generally consists of four mandatory stages:

Stage 1. Legal Formalization of Changes

First, all legally significant changes must be formally recorded. This includes changes to the legal entity’s name, organizational and legal form, addresses where medical activities are carried out, the director, and other details reflected in the licensing register.

Stage 2. Audit and Update of Material and Technical Base Information

Next, updated information on the material and technical base and staffing is prepared. During reorganization, management structures, personnel composition, allocation of responsibilities, and internal policies often change. All such changes must be properly documented to ensure there are no discrepancies between the submitted documents and the actual state of affairs from the Ministry of Health’s perspective.

Stage 3. Preparation and Submission of the Application Package

At this stage, the document package for the licensing authority is prepared. As a rule, it includes:

• an application to amend the license details;
• updated information about the medical institution.

Stage 4. Review Support and Registry Update

After submission, the documents are reviewed by the licensing commission. It is important to monitor the review process closely in order to respond promptly to any technical comments or requests. The final result is the appearance of updated information in the Ministry of Health Licensing Register, which is the only official confirmation of the legitimacy of your medical practice.

Common Mistakes and Risks: Why Medical Institutions Lose Licenses and Revenue

The reorganization of licensed medical institutions is a complex legal process in which even minor missteps can lead to serious legal and financial consequences. Most issues arise not from the reorganization itself, but from misunderstanding how it affects the medical license. We highlight four critical mistakes:

1. Continuing operations under the old license. In this scenario, medical services are effectively provided without a valid authorization. This may result in fines, license revocation, and suspension of medical activities.
2. Failure to notify the licensing authority of changes in a timely manner. Some managers assume that updating information in the Unified State Register is sufficient, while the data in the licensing register remains outdated. This creates a legal inconsistency and increases risks during inspections.
3. Formalistic approach to documenting legal succession. If the transfer deed or separation balance sheet does not clearly state the transfer of licensing rights and obligations, this may lead to a refusal to amend the license or a requirement to obtain a new one.
4. Changing actual operating conditions without proper documentation. During reorganization, a clinic may move to a new building, purchase additional medical equipment such as ultrasound machines, or appoint a new medical director, but fail to reflect these changes in the licensing file. Such actions, without updating the license details, often become grounds for regulatory claims.

Risk: Suspension or blocking of National Health Service of Ukraine payments due to data discrepancies

Medical institutions should also factor in the risk of losing their contract with the National Health Service of Ukraine, which is often the most painful consequence for municipal non-commercial enterprises and private clinics working with public funding.

The financing by the National Health Service of Ukraine is fully automated. The electronic healthcare system is synchronized with state registers, so if a medical license becomes invalid or the data in the registers does not match, the system automatically blocks payments. As a result, a clinic may continue providing medical services, but will not receive reimbursement under the Medical Guarantees Program. Importantly, such funding cannot be restored retroactively. Any missed payments are lost permanently.

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Legal Support for the Reorganization of Medical Facilities

If your medical facility is undergoing transformation, your primary objective is to avoid interruptions in funding and patient admissions. Our legal team ensures a seamless transition from the existing legal entity to the new one.

We implement a legal framework that allows you to preserve your assets, medical license, and contractual relationships in full compliance with applicable law. The key benefits of working with us include:

• Advance risk assessment: we evaluate the chosen form of reorganization before the process begins. If the selected approach creates a risk of license loss, we propose an alternative legal pathway that preserves the required permits.
• Protection of NHSU funding: we ensure synchronization of data across state registers, including the Unified State Register, the Ministry of Health Licensing Register, and the electronic healthcare system. This prevents technical discrepancies that could otherwise lead to blocked payments under the Medical Guarantees Program.
• Compliance audit: before engaging with the Ministry of Health, we conduct a thorough review of your material and technical base and staffing structure. This allows potential non-compliance with licensing requirements to be identified and resolved in advance, reducing the risk of refusal.
• End-to-end legal support from drafting the transfer deed through to obtaining official confirmation of license validity for the new legal entity. You receive a complete, compliant outcome without having to navigate bureaucratic procedures yourself.

Our medical lawyers support complex reorganization processes in both the private sector (clinic mergers and changes in ownership) and the municipal sector, including the transformation of hospitals into municipal non-commercial enterprises and the creation of sustainable healthcare networks. We have an in-depth understanding of regulatory requirements and ensure that the procedure is completed successfully on the first attempt.

Do not put the stability of your institution at risk. Contact us and entrust the legal aspects of reorganization to dedicated experts in medical law.