Viewpoint: Why GP partners should not hand back their GMS or PMS contract

If a practice hands back its contract, in most cases any new contract will be under APMS which means valuable lifetime contracts are lost to general practice. Specialist medical accountant Laurence Slavin explains an alternative option for GPs who no longer wish to be partners.

New GMS or PMS contracts are something of a rarity these days. The powers-that-be don’t much like the fact that these contacts are open ended – as long as the contact is fulfilled and nothing dreadful happens, the contact will be funded.

So, when new contracts are available, it is far more common to come across APMS contracts, which are short term and offered out to tender. This generally means the bidder with the lowest funding request will be most likely to win the contract.

APMS contracts

A short-term contract has obvious disadvantages. It is difficult to find outside lenders willing to lend or invest in a contract that might have less than 10 years to run. Staff that have been 'TUPEd' over into the short-term contract could claim redundancy if the contract is not renewed and (say) the list dispersed – in such cases, the APMS practice holding the contact at this point would end up footing the bill.

Unfortunately, general practice is not the same happy place to work as it was in the past. The reasons are too lengthy to go into here, but I have come across several clients recently who have told me that their practice is considering handing back its GMS or PMS contract.

The most likely outcome of such an event would be for the contract to be permanently terminated and a new APMS short-term contract offered out to tender. This may not be the result of every contract ‘handback’, but if it is, when the GMS/PMS contract has gone it has gone forever.

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What should partners do?

If you are a GP partner who has had enough and have thought of handing back your contract, you are possibly putting an end to a valuable resource that is becoming scarcer and scarcer. Whether you are a believer in the conspiracy theory that current policy is intended to undermine general practice, or if you want to keep the lifetime GMS/PMS contract alive, there are other options available.

If you and your partners really do want to stop being partners, it is possible to merge your contract into another GP’s or their practice’s contract if there is another practice interested in taking your business on. This doesn’t have to be a full-blown merger of the practices’ lists, but an arrangement in which the GPs in another practice join you in your practice, and a short time later you resign the contract leaving it in the hands of the other GPs. 

This kind of arrangement is helpfully spelt out in a BMA document Contractual Issues for GPs. Chapter 6 talks about practice mergers and explains how to do undertake a merger as described above, even where a PMS practice wants to take over a GMS practice. There is some helpful narrative, but the action points are reproduced in the BMA example section below.

The shortest period I have come across in which all partners were together on the merged contract is just four hours, at 8pm the GPs from a neighbouring practice were added to the unhappy GP’s contract and at midnight he resigned. This may be an extreme case but it shows what can be done under existing contractual regulations.

In these scenarios an unhappy GP or GPs can resign, retire, or carry on as a salaried GP or locum in the practice if this has been agreed, whatever they wish – but, importantly, the valuable GMS/PMS contract has been preserved.

BMA example1

'A PMS practice has been approached by a GMS practice, which would like the PMS practice to take them over and make the GPs in the GMS practice salaried. 

'One way to do this is as follows:

'The PMS and GMS contracts can join in partnership, effectively merging their practices. Partnerships can hold more than one type of contract so this should not be a problem. However all partners should be aware of the changes in their liability; partners will be jointly and severally liable for the GMS contract, but the liability for the PMS contract will be determined by the individual agreement.

'The GMS practice will need to inform the PCO/NHS England of the changes to its partnership as the contract is held with the practice (PMS agreements are held by individual GPs). By starting the takeover as a merger, the practices will help to preserve both contracts. 

'Once the practices are merged they can begin to make changes to their organisation. If the GMS doctors wish to become salaried, those involved can split from the other partners, nominating them as successors to the contract. If agreed by the PCO/NHS England (which it should be unless the PCO believes the action will harm patient care) the contract will continue and the contractors can employ the old partners as salaried GPs. 

'If the two practices want to move to operating only under the PMS contract, the GPs should talk to the PCO/NHS England and seek a variation in the existing PMS contract to allow the GMS GPs to become part of the contract. Eventually the GMS practice should be able to resign its GMS contract’.

  • Laurence Slavin is a partner with Ramsay Brown and Partners who specialise in the finance of GP practices.


1. This example is taken directly from the BMA document Contractual Issues for GPs, which was last updated in August 2013.

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