Viewpoint: Incentives, enhanced services and how CCG relationships with practices could develop

What is the relationship between CCGs and their constituent practices, asks Nick Clarke, commercial partner at solicitors Aaron and Partners LLP, and how may it develop?

Nick Clarke: 'CCGs are more likely to acquire enhanced services from practices who are performing well.'
Nick Clarke: 'CCGs are more likely to acquire enhanced services from practices who are performing well.'

There has been much debate about what the nature of the relationship between the new CCGs and their constituent practices will be. However, it is now clear that the contract setting out the obligations of individual practices and giving rise to the right to be paid will be between the practice and the NHS Commissioning Board (NHSCB), not the CCG and the individual practices

Incentives for practices

The question therefore remains as to what control or incentives CCGs will be able to deploy to seek co-operation from constituent practices in complying with the strategies and healthcare priorities that the CCGs decide on?
Practices are likely to be asked, if they have not been already, to sign up to a constitution prepared by their CCG. This is likely to provide for co-operation in achieving the CCG’s objectives but given that the actual contract for the provision of services will be between the NHSCB and the practice it will be interesting to see what approach will be taken by CCGs in relation to a practice that breaches the CCG’s constitution.
In any event, practices should avail themselves of any opportunity that is presented by its CCG to have input into such constitutions and at the very least should ensure they understand what the constitution requires of them in order to avoid acting in a way which is non-compliant and puts them in dispute with their CCG. If there is anything which is not clear or of concern, take legal advice as to its effect.

Non-core service provision

Another area where CCGs may, in due course, be able to reward good performance by constituent practices is in relation to the provision of non-core services (those services beyond the scope of the standard NHS contracts which practices hold) or enhanced services as practices might know them.

Assuming that CCGs acquire the flexibility to do so, they are more likely to acquire these services from practices who are performing well and who deliver value for money. In turn, this gives rise to opportunities for well-performing practices to increase their revenues through the provision of non-core services.

Non-core services do not have to be provided through the traditional sole trader or partnership structures which practices are compelled by the terms of the NHS contract to deliver the core services through. This means that thought needs to be given to whether existing partnership structures are the most appropriate vehicles for delivery of non-core services. There may also be opportunities to join up with other practices and offer non-core services as a joint venture for mutual benefit.

Joint ventures for mutual benefit 

Tax advice should be sought as to what is the most tax efficient structure for any such venture. This might be a company or a limited liability partnership (an LLP).

Legal advice should also be sought to establish the company’s/LLP’s constitution and to set out in an agreement important matters such as how profits are to be divided and what happens if a member dies or wants to retire. Giving these matters proper thought at the outset, and recording what is agreed, can save a great deal of time and expense as compared to dealing with a problem once it has arisen.
For assistance with issues arising out of clinical commissioning, or advice in relation to legal structures and agreements for pursuing the commercial opportunities that commissioning gives rise to, contact me.

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