Government plans to lift the cap on private income for foundation trusts pose a “high” risk of NHS hospitals being challenged under state aid rules, lawyers say.
The Health and Social Care Bill, published yesterday, proposes to remove restrictions on the proportion of their total income foundations can earn treating private patients.
But lawyers say the absence of specific controls to stop those hospitals cross-subsidising private treatment with NHS funding are likely to result in legal challenge from the private sector.
Jocelyn Ormond, a partner at law firm Beachcroft, told HSJ: “The chance of a challenge at some point, if this issue is not addressed head-on by the Department of Health, is pretty high.”
The only relevant provisions in the bill, he said, were powers for Monitor, and latterly the health secretary, to make directions to FTs about how they should prepare their accounts.
He continued: “Although they may ultimately also be invoked to lay down accounting rules which may help allay the concerns of private sector providers as to the ability of FTs to cross-subsidise their private patient units, they will not provide any comfort in this respect to the private sector providers for the time being.
“ They are also unlikely to provide any comfort to those concerned about the impact of abolition of the cap on the quality and funding of NHS services.”
The “absence of more specific controls is likely to come under close scrutiny during the passage of the bill,” Mr Ormond concluded.
A 2009 HSJ investigation found that in just under a third private patients receiving care in NHS hospitals were charged less than the actual cost of their care.
3 Readers' comments