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The legal issues facing the transition to consortia commissioning

The transition towards GP led consortia and commissioning will require firm and clear guidance on legal and policy issues. Fiona Boyse, associate at Mills & Reeve LLP, offers a legal insight into the changes facing commissioning.

The transition towards GP commissioning is underway, with two waves of pathfinders already starting to take on additional commissioning responsibility. At the same time, the recent publication of the Health and Social Care Bill has removed any remaining doubt that the proposed reforms will be as dramatic and rapid as originally planned. 

As a result, it is likely that consortia commissioning plans will now really start to move forward. In doing so, there are several legal and policy issues which need to be considered. 

Addressing these issues now, and putting in place appropriate documentation from the outset, will help to ensure that consortia commissioning is successful.

Commissioning consortia will be statutory public bodies when they are formally established. Early implementers, however, must choose what structure to adopt in the meantime. One of the purposes of the pathfinder programme is to test different structures. 

The structures we have seen so far tend to involve early implementers participating in commissioning through PCT sub-committees and/or having a contractual relationship with the PCT for the provision of commissioning services.  

Whichever option is chosen, it is essential to have appropriate documentation governing roles, responsibilities and accountability. 

Robust governance structures are crucial, both for early implementers and, ultimately, commissioning consortia. The bill reflects the government’s proposal for flexibility in consortium governance arrangements to suit different organisations. A full set of prescriptive requirements will not be imposed, although consortia will be required to have a constitution. 

The constitution must be submitted to the NHS Commissioning Board as part of the authorisation process. The bill sets out some of the detail which must be included in the constitution, along with details of the accountable officer role.

Outside of those requirements, consortia will be responsible for developing and documenting any other governance arrangements themselves. Early implementers will also need to do this to cover the transition period.

To plan for consortia commissioning, the level of funding for consortia, and exposure to risk, need to be clear. The NHS Operating Framework 2011-12 states that the management allowance likely to be available by 2014-15 is £25-£35 per head of population. 

During the transition period, however, running cost allowances are to be agreed locally. Clarity will be needed to give consortia commissioners a better idea of what might be achievable. 

Post-transition, we know that commissioning consortia will have a duty to break even and will not be bailed out. There will be a failure regime, including a statutory power for the NHS Commissioning Board to intervene in failing consortia. Although GPs will not be individually liable for overspends by their consortium, a proportion of practice income (the quality premium) will be linked to outcomes achieved by the consortium. 

Being a statutory public body will bring commissioning consortia within the scope of certain public duties, for instance: compliance with procurement law and the duty to involve patients and the public in commissioning decisions. Decisions by public bodies can also be challenged by judicial review in the courts; for example a patient may challenge a decision not to fund an unusual or particularly costly treatment.  Robust policies and procedures will be essential to minimise risk.

In addition to procurement law, NHS policy on procurement and contestability currently applies to early implementers. This requires compliance with the Department of Health’s Procurement Guide and Principles and Rules for Co-operation and Competition

From 2012, the bill proposes a new competition regime to be enforced by Monitor.  This may include regulations requiring consortia to comply with good procurement practice and promote competition. It will be important to be aware of, and comply with, these legal obligations.

Another important area for consortia commissioners to understand is contract negotiation and contract management.

Existing mandatory NHS standard contracts are very complex and lengthy (and must be used by all commissioners, including early implementers of GP commissioning). Understanding them is key to maximising the outcomes of contracts with providers. In the future, new contract models will be developed by the NHS Commissioning Board for use by consortia.

At this stage, the extent to which TUPE may apply to transfer staff from PCTs into consortia remains unclear. We do know that the bill provides the Secretary of State for Health with power to establish staff transfer schemes in connection with the establishment, modification or abolition of a body. 

Under such schemes, staff would transfer “as if” TUPE applied (suggesting staff transfers may be imposed even if TUPE does not apply).The bill has also clarified that consortia staff will have access to the NHS pension scheme

Although the details of the proposals are becoming clearer, there is a lot still to clarify and confirm. Starting to address the above points will help consortia to get started, while keeping an eye on developments in these and other areas. 

Ultimately, however, consortia commissioners need further clarity so that they can fully understand what they are taking on and plan accordingly.

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