Reforming Indonesia's Healthcare System – Key Features of the Omnibus Health Bill

The Covid-19 pandemic has tested healthcare systems worldwide and Indonesia has been no exception. The pandemic exposed the limitations of Indonesia’s healthcare system, leading to healthcare becoming a national priority for the Indonesian Government.

The government considers that a massive and holistic transformation of the national healthcare system is needed, and has been working with Parliament on a draft health bill (the Omnibus Health Bill or, simply, the Bill) in the form of omnibus legislation that aims to supersede nine key existing laws in the healthcare sector – including the 2004 Medical Practice Law, 2009 Health Law, 2009 Hospitals Law and 2014 Health Workers Law – by simplifying, consolidating and improving upon these laws.

INTRODUCTION

The Bill aims to transform six key pillars of the healthcare sector:

• primary services;
• referral services;
• health system resilience in dealing with crises;
• health funding system;
• healthcare workers; and
• health technology.

The broad scope of the Bill ranges from rights and obligations of healthcare service providers to the qualifications of medical and healthcare workers, telehealth and telemedicine, licensing approval processes, distribution of regulatory authority among government institutions, and social security benefits.

A major theme of the Bill is to centralise various powers in the central government, including through the Ministry of Health (the MOH), thereby reducing the power and influence of various healthcare associations. This re-centralisation of authority is expected to reduce red tape and create more flexibility as the Government revises the regulatory framework to better align with necessary developments in the healthcare sector.

MEDICAL LIABILITY FOR HOSPITALS AND MEDICAL AND HEALTHCARE PRACTITIONERS

Existing regulations that recognise medical liability include Law No. 44 of 2009 on Hospitals, Law No. 29 of 2004 on Medical Practice, and Law No. 36 of 2014 on Healthcare Practitioners, under which hospitals, medical practitioners and healthcare practitioners, respectively, can be held liable for medical malpractice. However, despite this legal recognition, Indonesia’s medical liability regime is still rudimentary, with only limited actions ever having been taken against hospitals, medical practitioners, and healthcare practitioners. This is primarily due to the difficulty of proving cases, a lack of awareness among patients, and inadequate enforcement mechanisms.

Mistakes vs negligence. Under the Bill, any patient suffering losses from a “mistake” in the provision of healthcare services may seek compensation for damages against a medical practitioner or healthcare practitioner. However, in case of “negligence” by a medical or healthcare practitioner in a hospital, it is the hospital that will be held liable for all losses. In contrast, under the current regulatory regime, a patient may seek compensation from a healthcare practitioner (which term currently excludes a medical practitioner) for damages if they suffered losses arising from a “mistake” or “negligence” by a healthcare practitioner.

Claims made against a medical or healthcare practitioner must go through an alternative dispute resolution (ADR) forum before a patient can proceed to court.

The Bill also sets out criminal sanctions for a medical or healthcare practitioner whose “gross negligence” results in a patient suffering serious injury (for which the penalty is imprisonment for up to 3 years) or death (for which the penalty is imprisonment for up to 5 years).

Unfortunately, the Bill does not provide any guidance on the meanings of the terms “mistake”, “negligence” and “gross negligence”. The ADR forum and compensation scheme are also not explicitly regulated in the Bill, leaving plenty of room for interpretation and judicial discretion.

PROCESSING MEDICAL RECORDS AND HEALTH DATA

The Omnibus Health Bill aims to regulate various concepts, including “medical records”, “patient confidential personal health”, “data and information” and “personal health data and information”.

As some of these concepts are already covered by existing regulations, navigating these overlapping requirements will be a complex exercise for healthcare service providers and patients. To take one example, the term “medical records” is regulated by Minister of Health Regulation No. 24 of 2022 on Medical Records, issued in August 2022 (MOH Regulation 24), while “health data and information” is regulated by Law No. 27 of 2022 on Personal Data Protection (the PDP Law).

The interplay between the PDP Law (which applies to all sectors) and the healthcare sector rules on the protection of patients’ personal data is not clear. However, forthcoming implementing regulations of the PDP Law should help to clarify how the rules set out in the PDP Law will apply in practice. In addition, it would be desirable if the MOH could also issue a separate implementing regulation to implement the PDP Law in the healthcare sector.

Offshore transfer of health data. A major difference between the PDP Law, the Omnibus Health Bill and MOH Regulation 24 relates to offshore transfers of health data. The Omnibus Health Bill requires (among other things) prior approval from the MOH for offshore transfers of “health data and information” and specimens. This requirement is stricter than under the PDP Law, which permits offshore transfers of personal data (including “health data and information”) if (a) the recipient country offers equivalent protection to, or higher protection than, the PDP Law, (b) there is adequate protection in binding arrangements between the transferor and transferee, or (c) the relevant personal data subject’s consent has been obtained.

Data localisation. With respect to data localisation, providers of a “health information system” must manage, process and/or store such system and “health information data” within Indonesia, unless the necessary technology is not yet available in Indonesia, as long as prior approval is obtained from the MOH. Again, this requirement is stricter than under the general data protection regime, which only requires public scope electronic system operators (i.e. government institutions) to place their data centres and disaster recovery centres in Indonesia, except where the storage technology is not yet available in Indonesia (which must be confirmed by a special committee of the Ministry of Communications and Informatics).

Personal data controllers and processors currently have until 17 October 2024 to comply with the PDP Law, and healthcare facilities have until 31 December 2023 to provide electronic medical records to comply with MOH Regulation 24. If the Omnibus Health Bill is passed in its current form (i.e. without alignment with the PDP Law), that will introduce another complex layer of data protection rules in the healthcare sector.

EMPLOYING FOREIGN DOCTORS

Minister of Health Regulation No. 6 of 2023 on the Utilisation of Foreign Healthcare Practitioners regulates the types of activities that can be undertaken by foreign doctors and the applicable regulatory requirements that must be met before undertaking such activities. For example, foreign doctors can practise medicine in healthcare facilities as long as they satisfy certain criteria, such as being able to speak Indonesian and holding a specialist qualification, a Competency Certificate (Sertifikat Kompetensi), a Temporary Registration Certificate (Surat Tanda Registrasi Sementara), and a Licence to Practise (Surat Izin Praktik). In practice, these criteria are difficult to fulfil, meaning that foreign doctors are seldom seen in Indonesia.

Under the current regime, the Indonesian Medical Council (KKI) has the authority to issue the Temporary Registration Certificate, and the relevant regional government has the authority to issue the Licence to Practise allowing foreign doctors to practise in Indonesian healthcare facilities. The Bill grants the MOH the authority to issue both the Temporary Registration Certificate and the Licence to Practise going forward.

The Temporary Registration Certificate and Licence to Practise requirements are exempted for foreign doctors who are practising specialists, sub-specialists or experts holding a competency certificate in a pre-eminent field, if they have practised overseas for at least five years.

The Omnibus Health Bill does not dramatically change the overall regulatory framework applying to foreign doctors in Indonesia. One notable change, however, is its attempt to centralise government authority by stripping away various powers currently held by healthcare professional associations and organisations and granting them to the MOH instead.

HEALTHCARE FACILITIES IN SPECIAL ECONOMIC ZONES 

Broadly speaking, a Special Economic Zone (Kawasan Ekonomi Khusus/SEZ) is a designated area of Indonesia with specified boundaries and in which certain economic functions and benefits reside. There are currently 20 SEZs in various regions.

Sanur SEZ. There is no specific reference to SEZs in the Omnibus Health Bill. However, in 2022 Government Regulation No. 41 of 2022 established a new SEZ in Sanur, Bali, focusing on healthcare and tourism. Development of the Sanur SEZ is ongoing, and it is expected to be fully operational by 2025.

Branches of foreign hospitals. Minister of Health Regulation No. 1 of 2023 on the Implementation of Hospital Business in an SEZ states that foreign-owned hospitals may also take the form of branches of foreign hospitals. This is a new development. However, no further regulatory guidance has been provided on the requirements for establishing such a branch, aside from being a limited liability company.

SEZ Administrator. The role of the SEZ Administrator broadly covers licence processing, servicing and supervising the SEZ. The Administrator has the authority to issue Licences to Practise for foreign doctors to practise in Sanur SEZ, whereas this is the regional government’s authority elsewhere. Foreign doctors must still comply with applicable healthcare and labour law requirements.

Licensing requirements. In terms of licensing requirements, there are no major differences from hospitals located outside an SEZ. License applications must be made via the Online Single Submission (OSS) system. However, one notable difference is that verification of the application and supporting documents will be undertaken by the SEZ Administrator, rather than the MOH, as is the case for foreign-owned hospitals elsewhere.

There does not appear to be any significant easing of the applicable regulatory requirements on licensing for hospitals and foreign doctors. In practice, this will depend on how the relevant requirements are implemented by the relevant regulatory authority.

KEY BPJS CHANGES 

The Bill would amend Law No. 24 of 2011 on Social Security Organising Board (known by its Indonesian abbreviation as BPJS) (the BPJS Law) by increasing (i) the accountability of BPJS to other ministries, (ii) the responsibilities of employers for BPJS registrations, and (iii) the BPJS health benefits.

BPJS accountability. Under current regulations, BPJS reports directly to the President without the involvement of any ministries. The Bill states that BPJS is accountable to the President through: (a) the MOH, in the case of Health BPJS; and (b) the Ministry of Manpower, in the case of Manpower BPJS. The Bill also engages the Ministry of Finance in various aspects of program management, including the appointment process for members of the BPJS Supervisory Board and Board of Directors.

Registration. Under the BPJS Law, employers are responsible for registering their employees with BJPS. Whilst this obligation remains, the Bill states that if an employer fails to make such registration, employees may register themselves at the cost of their employer. In addition, if neither employer nor employee makes the registration, then the employer will be responsible for any costs and consequences arising from any occupational accident involving the employee.

It is worth noting that the Bill does not permit an employer to terminate an employee’s BPJS registration without either (a) first obtaining a binding court decision or (b) a request from the employee concerned. Employers need to be mindful of this requirement in scenarios where an employee voluntarily resigns or is terminated.

Health benefits. BPJS health benefits will increase to cover, among other things, inpatient services not restricted to a specific period of treatment; outpatient and inpatient services not limited by BPJS hospital service quotas; and the right to obtain all necessary treatment facilities and medical procedures for all types of illnesses until recovery.

CONCLUSION

The Omnibus Health Bill aims to reform Indonesia’s healthcare system, which is welcome. Having said that, overall the Bill does not appear to significantly change the existing regulatory regime. The exact implications of the Omnibus Health Bill remain to be seen and, once the Bill is issued, we will then need to wait for the implementing regulations to be issued before we can make an informed assessment of its impact.

One notable and unusual approach taken by the Omnibus Health Bill is to reduce the authority of healthcare associations in certain areas. As a result, the Bill has met stiff opposition from the various doctors’ and medical associations, including the Indonesian Medical Association (Ikatan Dokter Indonesia/IDI), which have voiced their concerns over not being consulted during the legislative process.

The Omnibus Health Bill is now being deliberated by Parliament, and it is not yet clear when it will be passed, and in what final form.

We will continue to monitor and report on developments in this space.

By Cellia Cotan Cognard, Stephanie, Jonathan Tjenggoro and Alyssa Ghassani