Derbyshire and Nottinghamshire CCGs Guiding principles for considering requests for financial support from Primary Medical Services Contractors

Transcription

1 RCCG/GB/15/012 NHS England North Midlands - Principles for considering requests for financial support from Primary Medical Services Contractors Derbyshire and Nottinghamshire CCGs Guiding principles for considering requests for financial support from Primary Medical Services Contractors 1

2 Derbyshire and Nottinghamshire CCGs Guiding principles for considering requests for financial support from Primary Medical Services Contractors First drafted: July 2014 Updated: February 2015 (JML) Updated: May 2015 (JR) Finalised: May 2015 (JR) Prepared by Jonathan Rycroft, Head of Primary Care Joe Lunn, Assistant Head of Finance Primary Care 2

3 Contents Introduction.. 4 General Principles applied to all requests Further principals where a request relates to service change / new business models... 4 Further principles where a request relates to resolving urgent issues relating to patient safety / clinical quality... 5 Additional principles where a request relates to financial hardship... 5 Disputes Process... 6 Appendix 1 North Midlands - Financial Due Diligence Review Requirements 3

4 Guiding principles Derbyshire and Nottinghamshire Clinical Commissioning Groups consideration of requests for financial support Introduction The purpose of this paper is to set out the principles under which requests for financial support from Primary Medical Services Contractors will be consistently considered by Derbyshire and Nottinghamshire Clinical Commissioning Groups (CCGs). This relates to requests for non-recurrent and / or recurrent funding over and above the agreed contractual value, requirements of contract and regulations. General guiding principles applied to all requests: The CCG will only consider providing additional funding in exceptional circumstances and where it is in the best interest for patients. These principles do not apply to financial support that practices are entitled to apply for elsewhere e.g. under the SFE s. The CCG must act transparently, proportionately and treat all Primary Medical Services Contractors fairly and equally The CCG must always consider its overall budgetary position when making such decisions There must be clear evidence of the exceptional circumstances necessitating the request for additional funding CCGs will continually review what constitutes exceptional circumstances. The Primary Medical Services Contractor must provide evidence in advance that the use of such additional funding represents the best value, balancing cost with effectiveness, and demonstrating that costs have been robustly benchmarked (e.g. through comparative quotations) Where exceptional additional costs are expected to result from a service change/business change designed to resolve business continuity / quality issues then shared costs would be considered Where exceptional additional costs are expected to result from a service change/business change to deliver CCG strategy then shared costs would be considered Where shared costs are considered these would be an agreed % of the total evidenced costs, and up to a defined maximum value The CCG will provide written confirmation for any agreement to provide additional support clearly defining the parameters of this support Agreements to provide additional support are considered non negotiable Further guiding principals where a request relates to service change / new business models: Additional funding must be agreed by the CCG in advance of the service/business change Where Primary Medical Services Contractors are developing their business model (e.g. through merger of two GP practices) the CCG would expect all costs associated with 4

5 the business change to be the responsibility of the Primary Medical Services Contractors. It is expected that Primary Medical Services Contractors conduct thorough due diligence to support service change / new business models (e.g. when tendering for a contract, merging two contracts) For mergers, where issues are identified through due diligence these should be resolved between the Primary Medical Services Contractors in advance of the merger Where a Primary Medical Services Contractor accepts a contract following a procurement process it is expected that all requirements of the contract will be delivered within the agreed contract value and that any quality issues identified (e.g. notes summarisation) will be addressed by the contract holder Where the CCG is required to approve the business change (e.g. through consideration of a business case) any exceptional additional funding should be identified in the business case The CCG will provide written confirmation of any additional funding agreed as part of the business case request No additional funding requirements identified after the business change or letting of the contract will be considered by the CCG as they should have been foreseen through due diligence In such situations it is expected that the Primary Medical Services Contractor will first seek to recover such costs with the responsible party, internally or through insurance arrangements Further guiding principles where a request relates to resolving urgent issues relating to patient safety / clinical quality The CCG will consider establishing an independent investigation to determine the scale and nature of the issue, evidence base, respective responsibility and optimal solution to inform the costs to resolve Additional funding will only be provided to cover clinical and administrative costs that directly relate to patient safety / clinical quality Corporate costs incurred by the Primary Medical Services Contractor in resolving an issue will be regarded as a business costs Additional guiding principles where a request relates to financial hardship The CCG can only consider exceptional additional funding where an independent North Midlands approach to such requests is set out in Appendix 1 The Primary Medical Services Contractor will need to demonstrate that it meets all of the national criteria applied to transitional funding requests in the GMS MPIG and PMS Premium review process in 2014 as set out below:- o No doctor in the practice should have declared pensionable earnings in excess of 106,100 per annum (Source: DDRB 2014 England Average ) relating to practice income. This will be pro rata d for part time GPs. It will be updated in line with DDRB as appropriate. o Practice expenses must be evidenced to be greater than 63% o No contract breaches for any reason issued since within the current or previous financial year o That a significant proportion of contract holders (significant defined as =>50%) do not have live cases with NHS England North Midlands performer machinery or 5

6 GMC, including the Interim Orders Panel. Suspensions which are a neutral act, will be disregarded and will not prejudice a practice s position under these criteria o Fewer than five outliers on the GPHLIs on current system NHS agreements to provide exceptional additional funding will take into account the contribution of previous historical business decisions by the Primary Medical Services Contractor to their current situation The CCG may wish to treat exceptional additional funding as temporary and seek to recover this over an agreed period once stability has been restored for the Primary Medical Services Contractor. Disputes /Appeals Process There is no right of appeal relating to decisions made by the CCG in line with these principles. 6

7 Appendix 1 Derbyshire and Nottinghamshire CCGs Financial Due Diligence Review Requirements following request for financial support to Primary Medical Services Contractor in financial difficulty The CCGs have adopted the NHS England Derbyshire and Nottinghamshire approach to undertaking a review of a Primary Medical Services Contractor who is seeking support for being in financial difficulty. Provision of Financial Assistance to Primary Medical Services Contractors. The CCG can provide financial assistance to Primary Medical Services Contractors, but only when it can be objectively demonstrated the provision of assistance facilitates an obligation to commission (primary) health services. If assistance is proposed, careful consideration must be made of procurement and competition obligations. Proposed step by step approach (following Monitors Enforcement Guidance) to minimise competition and procurement risks. 1. Are you demonstrating that you are acting in the best interests of patients to meet their needs? 2. Are you demonstratively acting to improve efficiency and quality of services? Can you show you have acted transparently, proportionately and treated all stakeholders / providers and potential providers fairly and equally? 3. Have you considered whether integration, choice or competition might drive up quality? 4. Have you kept an audit trail of your decision making? Any provision of financial assistance would need to demonstrate objectively that: 1. It meets patient needs, is effective and constitutes value for money 2. The CCG has acted transparently, treated all Primary Medical Services Contractors equally and non-discriminatorily, and behaved fairly between providers 3. Arrangement will not have an anti-competitive effect on the market that is not justified in the interests of patients 4. A clear and robust process has been adopted, clear documented cogent reasons for the payment, and that the payment is as low as possible. 5. The arrangement is structured up front and set out in contractual terms (written agreement) with any provider and expressed as necessary to secure future or on-going provision. It is determined that it is within the statutory powers of NHS England North Midlands delegated to the CCG to make a payment of financial assistance if: 1. It can be objectively demonstrated that the provision of assistance facilitates CCG wide ability to commission (primary) health services e.g. it has the potential to reduce instability in the existing weak Primary Medical Services Contractor thereby reducing the risk of a catastrophic failure of services on very short notice or no notice, and 2. That the Primary Medical Services Contractor provides a future or current service. It may not be given after the termination of provision of service. 7

8 Procurement and Competition Law Risks 1. Payments are likely to be intra vires if they are made / contracted prior to the termination of a contract. 2. Payments are likely to be ultra vires if they are made upon termination, as this is likely to be considered as a material variation in the contract. This would amount to an award of a new contract, triggering procurement law obligations and duties. 3. There is no express obligation under 2013 Regulations to tender the award of new contracts, but you must be able to show you have considered your obligations. Other considerations As an ALB, NHS England North Midlands would regard these types of payment as a special payment, and so could possibly require prior approval by Treasury, as an ex-gratia payment to a Primary Medical Services Contractor on grounds of hardship (for example), and will need approval of the Efficiency Controls Committee prior to payments being made. The CCG should discuss individual cases with NHS England North Midlands. Financial Information Required for Due Diligence Review The information the CCG finance team require is:- 1. Copy of the certified accounts for the past five years, with an explanatory paper detailing any organisational changes / additional services relating to each year (Balance Sheet / Profit & Loss) 2. If any areas of the accounts are consolidated then the North Midlands team need to have evidence from the accountants of costs relevant to individual service areas 3. All bank account statements for the last 12 months 4. Cash Flow for the last financial year 5. Cash Flow forecast for the current financial year, and forecast Profit & Loss / Balance Sheet (by business area) 6. Details of all outstanding loans/mortgages and the terms applied to these. 7. Details of the shareholder / owner arrangements breakdown of share capital held and the legal frameworks associated with these (e.g. if a partner leaves when do the practice shares need to be bought out) 8. Analysis of fixed, variable and activity related variable expenditure and income (if possible) This information is required by the CCG to validate the options being considered and/or the long term viability of the organisation in question, prior to any decisions being taken. 8