Primary care legal expert Mark Jarvis highlights the issues practices must consider as primary care network structures take shape
Since the introduction of the new GP contract in April, practices have had their work cut out to meet the deadlines for forming primary care networks (PCNs) and to agree on their structures and governance arrangements.
The PCN itself is based on a contractual joint venture (or partnership) but the delivery model may involve other organisations.
PCN guidance from the BMA identified five main models based around the delivery of the Network DES, including how the network staff are engaged.
When choosing a model, the familiar mantra of ‘form follows function’ remains ever relevant, and some PCNs may find themselves with a hybrid of the suggested models.
It is anticipated that the structure will evolve and mature over the first couple of years of the Network DES, to progress to a more robust structure taking into account any changes in legislation, for example, to accommodate any new flexibilities in the NHS pension scheme, and to accommodate new non-core Network Practice Member and take advantage of locally commissioned services and additional staff.
Whilst the front end of the PCN Agreement has been nationally mandated, the schedules are intended to be used to reflect local arrangements and cover some of the most important areas of risk (including indemnities, activities, finance arrangements and workforce models).
Regardless of the model chosen, PCNs must keep their eye on some key areas when agreeing schedules, as follows:
- Good governance. While PCN governance arrangements should not be overcomplicated, especially given the expectation of change and the need for flexibility, it is important to ensure that areas of risk have been adequately covered. As with any contract, the language used needs to be robust, the obligations clear and proper thought must be given to how the governance will operate.
If using free templates, be mindful that these will be generic and will not have been tailored for your model. PCNs should ensure that the main areas of risk are considered and covered (without overcomplicating the arrangements). Templates require population and the devil is in the detail.
- Subcontracts and commercial contracts. Subcontracts should properly draw down the requirements of the ‘head’ contract. Primary medical service subcontracts will require CCG notice and possibly approval requirements which need to be satisfied. Commercial contracts for goods/services have greater flexibility, but should still be robust and protect the PCN’s position.
- Employment. The potential models entail a number of different employment structures including more complex arrangements around joint employment. All PCN models involve sharing of network staff and regardless of the chosen model, it is important to ensure the employment contracts and arrangements have been correctly drafted to enable shared delivery but also cover areas of risk. The availability of the NHS pension scheme for additional staff may be an issue. There is an indication that the regime may be amended in the future to allow greater flexibility for PCN entities.1 However, currently, unless the employing entity is a statutory NHS organisation, or has obtained NHS ‘determination’ status, eligibility will hinge on the employer holding a primary medical services contract as well as having the correct ownership structure.
- Accountancy and tax advice. Sharing staff and services can give rise to tax liabilities. While the risk of a VAT liability may be low for some PCNs in the first year, given the thresholds involved and the availability of exemptions, it is not a given, particularly with certain staff types, the provision of back office services, the involvement of dispensing practices and other VAT registered members. The availability of possible cost sharing group VAT exemptions should also be explored. If a VAT is anticipated, the schedules should be clear on how this is apportioned between the member practices.
In addition to the general areas above, major areas to consider for each model are outlined below.
1. Single employer, or lead practice model
This is likely to be the most widely used, at least for now. In this case one practice is taking on the employment liabilities for all staff employed through the PCN – so the schedules should include cross-indemnities from the other core Network practices.
2. Joint employer, or flat practice model
With this, employment contracts can be complex and will need to be equally clear on issues such as payroll and liability. Including cross indemnities in the schedules is important to share/allocate liability and apportion each member practice’s obligations as appropriate, as well as cover eventualities, such as the consequences of an employing member leaving the PCN.
3. GP Federation, or provider entity model
One of the key issues is whether the GP Federation should sign up as a non-core Network practice member to the PCN Agreement. If they do, it is important to ensure thought is given to which provisions should apply to that member and how they are involved in decision making. In some cases, the membership of a GP Federation will encompass several PCNs. Some of these Federations are considering moving from a ‘practice-led’ to a ‘PCN-led’ structure, wherein the ownership of the GP Federation will be divided into PCNs. This might include changes to voting such that this is carried out on a PCN basis, and in some cases the issue of dividends will be allocated to PCNs as opposed to individual practices. Changes to constitution documentation and the legal structure of a Federation will be required to properly achieve this model
4. Superpartnership model
A single contractor as a PCN can allow the schedules to be completed to reflect existing internal governance, and cross indemnities issues are less relevant. The concerns on the horizon will be the stated requirement that from 2020/21 such superpartnership PCN models must involve another non-GP provider NHS entity. Indeed from 2020/21, all PCNs are expected to involve some collaboration with non-GP providers and community based organisations.
5. Non-GP provider model, such as an NHS Foundation Trust
As with the GP Federation model, a key issue will be on whether they are to be a party to the PCN Agreement. Given non-GP providers are more ‘arm’s length’ than a GP owned entity, PCNs are likely to engage with these entities under separate contractual arrangements and these will need to be robust.
Looking to the future
Given the short timeframe practices have had to finalise arrangements and the consequent maelstrom of condensed activity, GPs could be forgiven for wanting to bury the governance in the back of a drawer for the foreseeable future, but it is important to keep these arrangements up to date.
If new NHS pension flexibilities appear on the horizon in the autumn and winter, PCNs will want to be ahead of the curve to avoid another last-minute rush to adapt their arrangements.
References
- BMA Primary Care Handbook. May 2019; p8 Potential PCN structures and employment options: Pensions
- NHS England. Network Contract DES Guidance 2019. Section 8: Future requirements; Paragraph 8.1: Non-GP providers
Mark Jarvis is a partner at VWV law firm
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