NHS Hull is converting its provider arm into a commercial company, provisionally known as the City Health Care Partnership Community Interest Company (CIC).
The company will be owned by its staff, and will 're-invest' any profits in health services or in the wider community. It will run services including several local GP practices and the local out-of-hours service.
But the move has met with outrage from the BMA and other health unions, who accuse the PCT of 'privatisation by the backdoor'.
A BMA spokesman said that the trust had 'misled its staff into thinking it's just another NHS merger, when what's happening is the services are moving out of the NHS'.
Dr Russell Walshaw, chief executive of East Yorkshire LMC, said that a 'fair handful' of GPs were directly affected.
'The biggest issue for them is that they don't get to be in the NHS pension scheme because they no longer work in the NHS,' he said.
The PCT says that all staff transfering over to the new company will retain their NHS pension. But current rules mean that such entitlements would be threatened if the company undertakes any non-NHS work. New staff will not be eligible for the pension.
The BMA spokesman added that the PCT had been 'very unclear' about what would happen to the company's profits. 'Its intention is to put that profit back into the community, but it's not given us any detail on how that'll work.'
NHS Hull told doctors it 'did not need to consult widely because there will be no change in service,' Dr Walshaw noted.
The PCT has also barred trade unions and press from board meetings arranged to discuss the changes.
A PCT spokeswoman said that 'City Health Care Partnership will be an independent organisation that is underpinned by strong social purpose and organisational values.'