Health Services: CCG Contracts — Friend or Enema! Part 1

Kicking off this month's hot topic -- Health Services -- is this guest post from Stephen Ashcroft of Brian Farrington, which is the first of three parts. Clinical commissioning groups (CCGs) are NHS organisations set up by the Health and Social Care Act 2012 to organise the delivery of NHS services in England.  CCGs should ensure they have written contracts with all providers. In this post, facets of the contracts that create obligations for the CCG and the Provider are considered from a commercial/procurement perspective.

It is an undoubted fact that, in the past, primary care trusts (PCTs) have not always had written contracts in place. To a certain extent CCGs replace PCTs, though some of the staff and responsibilities moved to council Public Health teams when PCTs ceased to exist in April 2013. Some arrangements were verbal, completely undocumented with custom and practice being the foundation of the arrangements. CCGs should now have complete clarity regarding who in their organisation has the accountability for ensuring written contracts are in place. Usually, the accountability would rest with Procurement, although it is recognised that Commissioners of Services have in the past created contracts.

It is necessary to issue a health warning – no pun intended – about creating contracts. Those who are untrained in the detail and formalities of contracts should always seek guidance from colleagues who are appropriately trained. This is likely to be procurement legal specialists.

NHS England now has responsibility for preparation and publication of the NHS standard contract. The 2014/15 contract reflects the requirements set out in ‘Everyone Counts: Planning for Patients 2014/15 to 2018/19’. The contract comprises three parts:

  1. The Particulars
  2. Service Conditions (SC)
  3. General Conditions (GC)

The contract was first published on December 2013. Should clarification or additional support be required you can contact nhscb.contractshelp@nhs.net.  For completeness, it may be noted that the previous NHS standard contract for 2013/14 is available on the NHS England website. The advice at the publication date of December 2013 was that the 2014/15 NHS standard contract “is mandated by NHS England for use by commissioners for all contracts for healthcare services other than primary care.”

At a very practical level, CCGs need to be assured that robust contracts are in place with all providers. As a minimum, there should be a service specification and related key performance indicators, agreed prices for the provision of services (including dealing with variable quantities of work), provision for default in contract performance and detailed arrangements for contract management. Also at a practical level, providers should review the CCG contract for their exposure to risk, as well as other areas briefly described in this article.

The Particulars 

This section of the contract consists of 80 pages of detail. There are very important matters included; for example the ‘Service Commencement Date.’ This is very relevant to the Provider for a number of reasons, including ensuring that the resources are in place and suitably trained/qualified; quality monitoring systems are in place; administrative support is available and a complaints procedure is credible and in place. The ‘Contract Term’ is required to be specified. The Provider should ensure that the Contract Term is sufficient to recover any capital outlay, such as IT system investment, through the pricing mechanism.

It has to be stressed that this article is selective in the issues highlighted; it is not intended to be comprehensive guidance. In the ‘Governance’ section there is provision in Schedule 5 for ‘Documents Relied On’ to be specified. The Provider should make sure this is included. If there is a future dispute, the base information provided by the CCG will be a serious consideration. There is also provision for ‘Mandatory’ and ‘Permitted’ sub-contractors to be named in Schedule 5. Providers are advised not to sub-contract without the CCG knowledge and approval. The Providers are advised to give serious consideration to their contractual arrangements with sub-contractors (noting that there may be special requirements for disclosure in Professional Indemnity Insurance policies).

Contract management is an activity where some CCGs can improve their professional activity. There is a provision for inclusion of the ‘Frequency of Review Meetings.’ There are serious implications for a Provider, not least the consideration of the ‘Reporting Requirements’ the CCG will require prior to a review meeting. Professionally conducted review meetings are an asset in a relationship, and is the forum to review contract performance, share frustrations and agree actions that need taking to deal with exceptional circumstances that may arise from time to time.

At Schedule 2 ‘The Services – (section A) it provides for inclusion of the service specification. This is of vital importance to the CCG and the Provider and, of course, the service recipient. The Courts of England & Wales are regularly hearing cases where the dispute is founded on a seriously flawed specification. The Provider, at the formal tender stage must read the specification and clarify any facets that are unclear, unsound or simply not deliverable. If, in the future, after contract award, there are CCG requests for changes to the specification, these should be carefully studied and, if acceptable to the Provider, the changes should be captured in a contract change note. If there are price consequences of the change this detail should also be captured.

Finally, in regard to the ‘Particulars’ section, we draw attention to the provision for an ‘Essential Services Continuity Plan.’ The author has audited many service providers where there has been an absence of such plans. This is a serious matter and could be sufficient for a CCG to terminate a contract, assuming there is another alternative, available.

Providers should check what happens in the case of:

  • Fire at their premises
  • Resignations of key personnel
  • Failure of technical equipment
  • Sickness preventing service delivery
  • Theft of essential records
  • IT Systems failure

CCGs may ask themselves if they ever audit continuity plans at strategic suppliers and whether the CCG has the expertise to evaluate the effectiveness of such plans.

In Part Two we will explore key facets of the Service Conditions of the 2014/15 NHS Standard Contract.

Discuss this:

Your email address will not be published. Required fields are marked *