AvP insolvency
On 15.09.2020, the pharmacy billing center AvP Germany filed for insolvency. Since then, there has been great uncertainty among service providers. The insolvency of this payment service provider affects many pharmacies and other service providers throughout Germany; the feared losses due to outstanding payments for prescriptions to be billed run into the billions. For affected pharmacies and the (provisional) insolvency administrator, but also for other healthcare providers who have outsourced their billing and are not (directly) affected by the current insolvency, difficult questions are already emerging from a legal, economic and technical perspective:
Is the money collected by AvP for prescriptions to be billed due to the respective pharmacy that sent these prescriptions? There are not only crucial differences in the respective general terms and conditions used by AvP that need to be considered, but also difficult legal issues that need to be clarified - for example, what exactly the requirements are for a "genuine" escrow account that would allow the amounts collected by AvP to be legally allocated in favor of individual pharmacies.
Has AvP ever opened separate accounts for collected funds and officially reported them? An initial glance at the balance sheets raises doubts in this respect, as no fiduciary relationships are shown separately there - but neither are the company's own bank balances in the expected billions. Intensive detective work is therefore required here to clarify the whereabouts of the funds - especially as the provisional insolvency administrator also states that he has not yet found any trust accounts expressly identified as such.
When were the individual claims of the respective pharmacies against the payer actually transferred to AvP as part of the business transaction? Have any claims already been transferred where the prescription receipts are still in the pharmacy but the invoice data has already been transferred to AvP? In which cases can a transfer of receivables still be stopped or challenged?
What happens to the transferred prescriptions that have not yet been processed by AvP? Is it at least guaranteed that pharmacies will have access to the money that will only be collected by the provisional insolvency administrator in the future?
Can the prescriptions be reclaimed by the provisional insolvency administrator and how realistic is it that he will actually return them promptly?
What claims might there be against solvent third parties? Is it possible to demand payment again from the debtor? Are claims against AvP's auditors conceivable because no fiduciary relationships were shown in their balance sheets (although this would have been expected according to AvP's business model)?
What is the effect if pharmacies still have older contracts with formerly independent AvP subsidiaries (AvP Hünxe, AvP Süd, AvP Nord etc.), some of which have since been merged into the insolvent AvP Deutschland GmbH, but some of which are still trading under the (non-insolvent) company AvP Dienstleistung GmbH?
What are the tax implications of the insolvency? Can I claim a bad debt loss? What do I have to book as a debit taxpayer in the default months? How do I secure the billing documents, especially copies of invoices, that were previously only held by the service provider?
Is it possible to defend against retaxation of prescriptions that may fall into the insolvency estate? What does a possible loss mean, especially for hospital pharmacies, for current and future reclaims from health insurance companies for allegedly overpaid VAT on finished medicinal products?
What needs to be considered when changing providers? How insolvency-proof are the general terms and conditions of other payment service providers and how is it ensured that the security measures required to protect all funds collected for pharmacies from the risk of insolvency are not only complied with on paper, but also in reality?
These and many other questions require close examination on a case-by-case basis - as initial experience with AvP cases shows that it can be very difficult to determine with whom and on the basis of which general terms and conditions the contract was concluded. Service providers who use another billing service provider should also check the latter's insolvency protection.
VOELKER has always advised and represented creditors in insolvency proceedings when filing and enforcing claims, particularly in complex large-scale proceedings of this kind. Due to our broad expertise in the field of debt enforcement as well as in medical and tax law, we offer the necessary know-how to competently assist affected pharmacies in clarifying the above questions - and certainly also to develop creative, practical solutions.
Status: 30.09.2020