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W&P Newsletter – Indonesian New Health Act – Notable Changes

On 8 August 2023, the Indonesian Government officially enacted the new omnibus Health Act No. 17 of 2023 (“New Health Act”), which is aimed to significantly transform, enhance, and accelerate the development of Indonesia’s health services industry to become more advanced, comprehensive, integrated, and accessible by all societies across Indonesia.
The New Health Act serves as a ‘super-integrated’ act, revoking and combining 11 existing health sectoral acts and regulations, including Act No. 36 of 2009 on Health, Act No. 44 of 2009 on Hospital, and Act No. 29 of 2004 on Medical Practice, with the main goal of regulation harmonisation.
This newsletter highlights some notable changes by the New Health Act.

  1. Greater Ease for Indonesian and Foreign Overseas Graduate Doctors (“Overseas Graduate Doctors”) to Practice in Indonesia 
    The New Health Act exempts the existing requirements of competency evaluation by the Indonesia’s Ministry of Health (comprising administrative and practice capability assessments) for Overseas Graduate Doctors to practice in Indonesia. Overseas Graduate Doctors would be allowed to practice in Indonesia as long as they (i) (a) graduated from a recognized medical school and (b) have a minimum of 2 years of practice experience abroad (for Indonesian doctors) or 5 years of specialized or sub-specialized practice experience abroad (for foreign doctors); or (ii) have expertise in a certain specific advanced medical field (for both Indonesian and foreign doctors) and 5 years of practice experience abroad (for foreign doctors)
    This is one of the most significant liberalizations by the New Health Act for Overseas Graduate Doctors, who have been restricted for years to easily practice in Indonesia. The relaxation of exemption is aimed to accelerate the procurement of sufficient number of specialist and sub-specialist doctors practicing in Indonesia to cater the needs of various specialist and sub-specialist healthcare services across Indonesia.
    This is also consistent with government’s effort in the liberalization of hospital and clinic business activities for foreign investments since 2021 which allows 100% foreign ownership for hospital business (for clinics, this remains subject to type of clinic). Prior to 2021 all types of hospitals and advanced clinics (klinik utama) business activities were limited to 67% (for all foreign investors) and 70% (for ASEAN foreign investors).
  2. Simplification of Doctor’s Practice License
    The New Health Act simplifies the requirements for obtaining the doctor’s practice license (Surat Izin Praktik – “SIP”) and registration certificate (Surat Tanda Registrasi – “STR”).
    It abolishes the existing prerequisites for doctors to obtain (i) a recommendation from the relevant professional organization (e.g. IDI (Ikatan Dokter Indonesia or Indonesian Doctors Association)), and (ii) approval letter from the superintendent doctor before applying for the SIP and STR. Consequently, doctor will only need to obtain the STR and SIP.
    Other significant changes by the New Health Act in relation to STR and SIP are: it no longer limits a doctor’s place of practice to a maximum of 3 places and the STR is now valid for life instead of the previous limitation of 5 years.
  3. Expanded Recognition of Telemedicine
    The New Health Act expands the recognition of telemedicine services, to also cover those provided directly by healthcare service providers to patients from previously being limited to between healthcare service providers only.
    This explicit recognition will serve as the legal basis for telemedicine practices widely developed in Indonesia, particularly during the Covid-19 outbreak compelling social distancing and physical interaction limitation. At the same time, this is expected to attract more investment on digital health business for further development of telemedicine service industry in Indonesia.
    However, the New Health Act is yet to set specific licensing regime and detailed requirements for “direct” telemedicine (by foreign investment or foreigners). We anticipate these to be specified in the implementing Government Regulation. Until the issuance of the implementing regulation, the Ministry of Health will assess any “digital innovative solution” proposed by business actors on a case-by-case basis through health regulatory sandbox and registration framework in accordance with the Ministry of Health Decree No. HK.01.07/Menkes/1280/2023. This framework is intended to assist the Ministry of Health to analyse and acknowledge the new health sector innovation and business schemes during the absence of the relevant regulatory regulation. It is reported that the Ministry of Health has granted the registration to a foreign owned company engaged in telemedicine application business.
  4. Harmonization of Personal Data Protection Requirements
    The New Health Act harmonizes the regulatory requirements for personal data protection aspects of health industry with the Indonesian Personal Data Protection Act introduced in October 2022, including by way of explicitly acknowledging the rights of patients to require healthcare services providers to delete incorrect data and other rights stipulated under the Indonesian Personal Data Protection Act.
    The technical details of the requirements, including for the transfer and processing of anonymized health related data would subject to and be further clarified in the implementing regulations.

There are more than 30 pending implementing regulations that are expected to be issued following the official enactment of the New Health Act, including those related to hospital, telemedicine, medical equipment and pharmacy. Our team will continue to closely monitor these matters and update you on any significant development or progress.

If you have further inquiries about this newsletter, please reach out to us at info@wplaws.com or any of our lawyers.