What are the legal implications of collaboration?

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This article was part of the Commissioning Legal Adviser channel, in association with Mills & Reeve. The channel is no longer being updated.

This summer the NHS Commissioning Board Authority published a draft Framework for Collaborative Commissioning between Clinical Commissioning Groups which acknowledges that CCGs cannot operate in isolation and will often have to work collaboratively with other CCGs and with other organisations. 

It is now acknowledged openly that CCGs will need to look beyond their own local commissioning role to ensure quality, access and outcomes requirements are met - so much for the extreme localism promulgated by the secretary of state when the NHS reforms began!

This will be particularly true where specialised services are concerned, but could also apply to services where improvement is high on the agenda, as gains may be made more quickly by embracing a neighbour’s best practice.

The current draft guidance is limited in scope to intra-CCG collaborations, but reassures us that further guidance will be provided in due course to address collaborations with other organisations, such as local authorities, with which CCGs will need to collaborate on joint and integrated commissioning arrangements.

This draft guidance covers collaborations between groups of neighbouring CCGs who share a main provider, such as a DGH, or a large number of CCGs working together across a wide geographical area, for example to commission an ambulance service, as well as a small number of neighbouring CCGs commissioning a specialist low volume service from a single provider.  

The draft guidance promises a “Model Collaborative Agreement” in September 2012, but at Mills & Reeve we have been advising CCGs on proposed collaborations since early in the NHS year.   

Preparatory arrangements for collaborations are to be completed by the end of October in readiness for the 2013/14 planning round. CCGs will need to exercise their judgement to decide whether, in seeking to act in the best interests of their patients, the myriad benefits of collaboration, such as more effective contract performance management and the sharing of expertise, outweigh the desirability of involving member practices of the CCG directly in all decision-making.

Focus on legal requirements

The focus of the guidance is on the legal requirements for collaborative commissioning across CCGs and the special considerations that need to be taken into account – see Annex 1. These requirements will dictate steps that will have to be taken in the run up to authorisation and so are highly relevant during the current period of preparation for statutory body status.

The NHS Act 2006 (as amended by the Health and Social Care Act 2012) will give CCGs the legal power to collaborate with other CCGs. However, regardless of any collaboration arrangements which may be made using that power, each CCG remains accountable for commissioning services that meet the needs of its population and for ensuring that all relevant quality standards are met. So there is no passing the buck to another CCG or a CSU by entering into collaborative commissioning arrangements.

Any two or more CCGs may enter into collaborative arrangements (under section 14Z3 of the 2006 Act) whereby one of them exercises any of the commissioning functions of the other(s) on its/their behalf or the CCGs exercise any of their commissioning functions jointly. The expression “commissioning functions” means the functions of CCGs in arranging for the provision of services as part of the health service and includes asking the NHS CB to exercise any of the CCG’s general functions to provide health services (under section 3 or 3A of the 2006 Act).

CCGs can set up a joint working committee or board to manage their collaboration, BUT the legislation does not allow for that body to make decisions directly of its own authority. Therefore unless other arrangements are also put in place, each individual CCG would have to ratify the collective decisions of the collaboration committee. 

This may be dealt with by each CCG exercising its power to delegate to a group (a committee or sub-committee) of the CCG or to an individual and by that group of people or individual exercising the function of making collaborative commissioning decisions on the CCG’s behalf or agreeing or approving decisions or recommendations made by the joint working committee or board. 

Alternatively CCGs could elect not to set up a joint working committee, but instead to delegate their functions relating to collaborative commissioning to a group (a committee or sub-committee) of the CCG or an individual. Delegated arrangements for the exercise of a CCG function must be set out in the constitution of the CCG, which is why the arrangements that will be put in place need to be thought about now before the constitutions are finalised and the CCG is authorised. 

Collaboration arrangements made by CCGs must be in line with and contribute to meeting their statutory duty to commission health services to meet the reasonable requirements of their populations. All these arrangements and how they fit with the decision-making processes, transparency of decision-making and governance of the CCG all need to be reflected in the CCG’s constitution. Any issues relating to the management of conflicts of interest that might arise out of collaborative commissioning arrangements also need to be covered.

Key issues to consider in developing a collaboration

Managing the relationship between the collaborating CCGs will be a key component of success, whether the arrangements cover a wide range of services or just one specialised service. Building on any existing good relationships will be vital and can be transformational. Otherwise in the case of challenging intra-CCG relationships, it will need to be a priority to build mutual trust and confidence between the parties.

Good governance will be dependent on:

  • acknowledging shared objectives;
  • establishing compatible visions for the service and recognising shared corporate and cultural values;
  • a clear scope as to the extent of the collaboration and risk sharing arrangements;
  • clear delegation of decision-making;
  • clear processes for overseeing the operation of the service contract(s) via a joint contract committee or board with agreed terms of reference or otherwise;
  • setting appropriate performance criteria and reporting obligations back to each of the collaborating CCGs;
  • agreeing dispute resolution, termination and exit arrangements;
  • considering the extent to which any administrative or co-ordinating activities required to be undertaken to support the collaboration could be done by a commissioning support unit (CSU) and clear governance arrangements for any CSU services required to underpin the collaboration; and
  • apportionment between the collaborating CCGs as to the costs of activities to be undertaken by one CCG or a CSU on behalf of a number of other CCGs; this may include arrangements to pay sums of money to another CCG or a pooled fund and/or to make the services of staff or other resources available to another CCG.  

Structuring the collaboration

Technical appendix 2 to the guidance describes a number of different possible structures that could be adopted to underpin the arrangements involving combinations of CCGs and providers as well as support from a CSU.

Whatever arrangements the CCGs decide to make, these will need to be reflected in all their constitutions. 

CCGs are required to have met their authorisation requirements by the end of October 2012 in time for the start of the 2013/14 contracting round and to ensure that new arrangements can be put in place by the time CCGs assume their functions as statutory bodies.

Julie Jordan, associate, Mills & Reeve

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