Healthcare providers must make sure they fully comply with Monitor’s new licensing regime to avoid the regulator’s sanctions, write Janet Dawson and Ed Bramley-Harker

Most healthcare providers will be aware of the new licensing regime Monitor is introducing. But many will still be puzzling about what it means for them.

The licence replaces terms of authorisation and will form the basis of Monitor’s compliance framework going forward. It will cover a number of areas, including pricing, continuity of service, integration and competition, and some general conditions such as a CQC registration requirement and supplying data to Monitor.

‘All provider organisations will face penalties for licence non-compliance’

First to be affected will be foundation trusts, which will be licensed from April. Because foundation trusts will automatically be granted a licence, it might be easy for them to assume they don’t need to do very much − but complying with the licence’s provisions may be more of a hurdle.

Some areas of the licence will be relatively easy to comply with but other areas may prove more challenging, possibly because there has been little emphasis on them up to now.

For example, providers will need to comply with competition rules, which may not have been seen as a major issue under the current regime. There is also likely to be an increase in transactions in the NHS over the next few years; for many, the licence will impact on their course of action and available options.

Difficult environment

All provider organisations will face penalties for licence non-compliance. Although it is not yet clear in which circumstances penalties will be applied, enforcement action will include significant fines, or even the ultimate withdrawal of the licence.

Providers need to be careful not to drift into non-compliance by not understanding, or overlooking, its full requirements.

‘Spending time now to meet all the licence requirements is essential to avoiding sanctions from Monitor’

Trusts also need to take a strategic approach towards compliance with the conditions of the licence. Once the licensing regime is up and running, trusts will be operating in a very different environment.

Almost every trust is likely to have designated “essential services” where restrictions in the form of “continuity of service licence conditions” will limit their freedom of action.

Spending time now to ensure your organisation meets all the licence requirements is essential in order to avoid sanctions from Monitor and minimise compliance costs.

Providers must ensure they have the information and systems in place to be able to demonstrate compliance, now and in future. 

Janet Dawson is healthcare lead partner and Ed Bramley-Harker is strategy and economics director for health for PwC