NHS Standard Contract 2015/16: Consultation Response NHS Partners Network The NHS Partners Network (NHSPN) is the trade association representing the broadest range of independent sector providers of NHS clinical services including acute, diagnostic, primary and community care, as well as dental services. Our members are drawn from both the “for profit” and “not for profit” sectors and include large international hospital groups and small specialist providers. All are committed to working in partnership with the NHS and to the values set out in the NHS Constitution, working in partnership with the NHS to maintain a free-at-the-point-of-use health service that delivers the highest standards of care. NHSPN is one of the networks of the NHS Confederation – the independent membership body for the full range of organisations that make up the modern NHS.

NHSPN is pleased to respond on a second occasion to NHS England as part of the planning process for the 2015/16 Standard Contract. We have framed our response around the outstanding issues following the consultation document published on Friday 12th December.

Issue 1 - The contract as a commissioning lever We believe that the notion that a single contract can apply to all services is becoming harder and harder to achieve, especially as in many cases some of the provisions in the Standard Contract will not apply to a service. However, it is noted that the opportunities afforded by the new models of care set out in the Five Year Forward View will in time generate specific contracting methods for each service model, which could be more appropriate than is currently the case.

NHSPN would encourage NHS England to look towards longer-term contracting for future contracting rounds, which allows for longer-term strategic planning from the provider side and greater up-front investment in services.

Issue 2 - Changes made to the Contract for 2014/15 Whilst we note NHS England’s aims to increase flexibility in some contracting arrangements, NHSPN would specifically raise the issue of AQP services given how some of the reporting elements for AQP under the Standard Contract are currently rather cumbersome. Given that patient volumes are virtually unknown for AQP providers we would recommend reporting requirements only kick-in when patient activity reaches a certain level.

Issue 3 – Mandated use of the Standard Contract Since the transfer of NHS public health activity to Local Authorities members report having to work to differing contractual systems and payment approaches dependent upon whether the contract is held with a CCG or a Local Authority. This can mean providers working to different quality requirements, health guidance and payment provisions. We would therefore encourage NHS England to examine ways of mandating the use of the NHS Standard Contract for public health services commissioned by Local Authorities.

Issue 4 - Tailoring the contract for different service types Whilst noting that the Standard Contract’s standardisation is an advantage, we would encourage some flexibility and believe it would be beneficial if the Contract form allowed parties to amend provisions where they do not add value or are inappropriate to the service being commissioned.

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We also believe that current arrangements for Clostridium difficile do not promote a level playing field, as independent sector providers are not given the same headroom as NHS counterparts before financial penalties are given, in part due to the sector’s positive record in infection control practices. Whilst not highlighted as an issue by NHS England during the consultation process, we would urge NHS England to look at this issue in detail and work with NHSPN towards a more appropriate solution for all providers of NHS services.

Finally, some of our members have mentioned that they would welcome the addition of an APMS schedule in the contract, as the process to extend APMS contracts is currently arduous and distracts from the primary goal to provide high quality patient care.

Issue 5 - NHS England as a direct commissioner Confusion remains as to where some services are commissioned between NHS England and CCGs. It should fall to NHS England to provide greater clarity for CCGs and providers to help them understand who the mandated commissioner is for certain services.

Where services are commissioned directly by NHS England, such as in the case of specialised services, we believe that it would be appropriate for providers to interact with NHS England via the e-Contract system.

Issue 7 - Contract management and financial sanctions NHSPN notes NHS England’s proposals to increase and mandate sanctions for missed performance on RTT. We would make the point that it is challenging to achieve a target percentage with low patient numbers especially if applied at the specialty level. We suggest a minimum number of patients’ threshold, negotiated and applied at a local level.

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We note the weekly 18 weeks PTL return and, whilst our members understand the need for it, wish to point out that we will encounter significant operational challenges in the delivery of this report from 1 April 2015. We suggest that providers agree locally with commissioners a phased implementation of this reporting process over the course of the contract year. In order to simplify this process, NHS England should supply a standard template for that return to support a consistent approach to reporting across CCGs.

General condition 17 – Termination The option to agree shorter notice periods for no fault termination requires further consideration. These shorter termination time frames could discourage the use of price flexibilities as providers would require the security of a longer term contracts in order to cover costs.

Issue 9 - Sub-contracting We welcome moves to introduce a non-mandatory template for sub-contract use under the Standard Contract, but would encourage NHS England and the Department of Health to ensure that such documents don’t replicate the Standard Contract or place too much of a legal burden on the prime or sub-contractor.

As NHS England looks to expand the guidance it provides for subcontracting, we would note that scrutiny of sub-contracting arrangements will also increase commissioner’s workload, introducing functions that they may not be sufficiently skilled to carry out. NHSPN’s membership would prefer to see contract management skills across local and national commissioners enhanced before any further management-level powers are introduced.

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Issue 11 - Managing activity and referrals NHSPN is highly encouraged to note the NHS England will address concerns around blocking of patient choice, a key tenet of the NHS Constitution, and we look forward to working with NHS England to work out exactly how this might be enforced from 2015/16.

We note the introduction of a specific contractual requirement on providers to accept every referral and understand the rationale for this provision. We would however encourage NHS England to work with commissioners to ensure there is clarity over who pays when a referral is ‘out of area’ and that the responsible commissioner pays in a timely manner to avoid placing a burden on providers’ cash flow.

Issue 12 - Information flows, payment and financial reconciliation The provisions in the contract for information, payment and reconciliation work well. However, greater timeliness from commissioners would be welcomed, or agreed flexibility over alternative payment methods, such as agreeing activity planning but paying based on a monthly invoice for actual activity.

Some of our members have also expressed concern about issues of outstanding payments after the reconciliation process is completed.

Issue 13 - The electronic contract system We welcome NHS England’s intention to provide a simplified eContract system with numerous forms of guidance and an email helpdesk. However, we reiterate that for any system to work it must be thoroughly stress-tested in advance, as last year many of our members experienced a number of issues with the system which led to unnecessary concerns being placed on the contracting process.

Issue 14 - Staff engagement and equality 5

We welcome NHS England’s statement that it will explore further with the independent sector before determining whether to mandate use of the NHS Staff Survey in 2015/16 and look forward to engaging with NHS England on this issue. We would reiterate some of the challenges of mandating the application of the NHS Staff Survey:

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Staff in the independent sector may work across both NHS and non-NHS funded care and differentiating between these staff through a survey is difficult.

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Many providers run their own staff engagement programmes which can offer a direct comparison to the NHS Staff Survey.

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Independent sector organisations have run their own staff surveys for many years. Applying the NHS Staff Survey could potentially mean that longitudinal information useful for organisational planning will be lost.

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Proposals to better align staff survey systems between all providers of NHS-funded care should be considered alongside any wider review of the existing NHS Staff Survey.

Issue 15 – Minimising redundancy costs when senior NHS staff are subsequently reemployed. We fully understand the importance of this and ensuring value for money for the taxpayer. We would however encourage NHS England to ensure that a requirement is placed on the employee to disclose their position to a new employer and to provide clarity under Agenda for Change contractual terms over who will ‘claw back’ any monies owed. We would also suggest that NHS England consider tax and National Insurance consequences, arrangements for employees that have taken early retirement on redundancy and redundancy monies have been paid into the NHS pension and how to close any loopholes from employees becoming self-employed consultants. We do not believe that the new

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employer should bear the risk of unknowingly hiring an employee and then becoming responsible for any reimbursements.

Issue 16 - Contract support from NHS England With many of the 2014/15 reforms yet to be implemented it would appear that commissioners require more than one year to put in place contract amendments and they would be afforded this time if contract periods were longer.

Our members would also appreciate clearer escalation points to NHS England in the event that providers are not engaged by local CCGs early enough to commence contract negotiations, or in the event that the two parties cannot agree on a negotiation.

We are encouraged, however, that NHS England will look to publish its Technical Guidance as soon as possible and early engagement through workshop events will no doubt be crucial – many of our members have in the past noted how useful these events are.

Other issues Schedule 5, Part D (Commissioners Roles and Responsibilities) Members report there being confusion as to the purpose of this schedule and commissioners have used it in ways that were inconsistent with NHS England’s intent. It would be best to remove the schedule to minimise the opportunity for additional confusion and to simplify the contract.

Timescales for signing contracts Members report some commissioners are seeking to sign contracts as little as two weeks from announcing preferred bidder which shifts the full risk of lack of due diligence to the provider. This may

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not be costed, especially where there are large scale transfers of existing services involving staff, assets, information, IT and premises. The Government recently published the latest version of the OGC Model Contract which addresses this issue and has a specific schedule permitting identified and agreed assumptions, an agreed timescale for resolution of the issues after contract signature and provisions on agreed adjustments depending on the outcome. There should be parity across all public services including NHS services given the need to ensure that the funding envelope enables providers to provide high quality services to patients, rather than being allocated to resolving and funding any previous lack of investment.

NHS Partners Network December 2014

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