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Investigation: Practices left on a knife edge as payments chaos bites

Reports of bailiffs threatening practices over unpaid bills, GP partners struggling to pay staff wages and LMCs warning that some practices may even go under – these are the all-too-real manifestations of the chaos that has gripped practice finances since responsibility for payments was handed to NHS England in April.

The warning signs were there before the handover. LMCs had urged practices to prepare for the worst and make financial contingency plans.

But even the LMC leaders who issued those stark warnings have been shocked by the ‘shambolic’ way in which practice payments have been handled by NHS England’s local area teams.

As many as a third of practices across England could face severe cash flow problems as a result, according to one accountant, with reports of incorrectly addressed cheques, missing payments and unpaid enhanced services work.

Others estimate there are problems with around 10% of practices’ total incoming funds, to the extent that some GPs have been forced to take out an overdraft or put partner drawings on hold.

There does not seem to be any particular pattern, it is totally chaotic

Dr Robert Morley

Elsewhere, GPs are suffering the opposite problem, with one practice receiving an overpayment of £70,000 and others not having the correct deductions made, causing them enormous cash flow problems when managers ask for the money back.

Dr Robert Morley, secretary of Birmingham LMC, said: ‘There does not seem to be any particular pattern, it is totally chaotic.’

In one common error, GPs have told LMCs of enhanced services payments ‘just appearing’ on their bank statements without any reference to what they are for. Practices say this makes it impossible to ensure they were being paid for the services they are providing, or indeed check they are being paid the right amounts.

Pulse reported in June that payments to GPs in London had been hit by serious problems, with some practices being threatened with bailiffs as a result.

Now NHS England has written to all LMCs across the country asking for details of the issues practices are experiencing, while GP leaders are warning that unless the problems are sorted out quickly there will be major ramifications – and some practices could even be forced to close.

The problems appear to stem from the 1 April handover from PCTs to NHS England, CCGs and local authorities, who are now all responsible for paying for different enhanced services while NHS England pays GPs for core services.

While local authorities can be billed directly by practices, payments for NHS England and CCGs go via the central payment agency Shared Business Services, a part-private, part-Government-owned body with very strict billing procedures.

Dr Morley says that a ‘lack of capacity’ in the local area team has exacerbated the problems locally.

He says: ‘The scale of the area and job they have to do is enormous, while the number of people doing the work is much smaller – we are told there are eight people in the GP contracting team covering 600 practices.

‘We have huge concerns over the finance functions which nationally have now been farmed out to NHS Shared Business Services.

‘We are worried about practices getting paid properly and at the right time. We have advised that practices have financial contingency plans in case they end up not being paid as they should.’

Five ways to protect your cash flow amid the chaos

1 Ask your LMC who pays what

Your LMC is your best resource for identifying which organisation, whether CCG, local area team or local authority, is responsible for each of your income streams.

2 Submit your returns by the given deadline

The new payments system is inflexible, and late returns are likely to result in missed or late payments.

3 Use a pro forma to complain

Practices in London have been using a template devised by Londonwide LMCs to flag up late payments in the first instance.

4 Track all correspondence

Send emails with a ‘delivery/read’ receipt whenever you discuss missing or late payments. Keep a record of any emails or phone calls.

5 If complaints fail, escalate them

If these methods don’t result in payment, step up your appeals. You can make a formal complaint under the HSCA (Complaints) Act 2009, issue a late payment notice under contract regulations, or if the non-paying body is not an NHS organisation, you have the option of going through the courts.

Dr Eleanor Scott is a medical director at Londonwide LMCs


Dossier of problems

A dossier of payment problems collated by Essex LMC and submitted to NHS England at the end of June, seen by Pulse, reveals that many practice managers remain unsure where to turn for advice, with NHS England in many cases not having supplied relevant contact details to follow up on payments.

One practice manager quoted in the dossier said: ‘We have just received a BACS confirmation for £400 with invoice number 0001 and no explanation. We always use invoice numbers which we can identify easily, so we are not sure why they are not using ours.’

Another practice reported that its MPIG adjustment was not paid in April so staff were told it would be paid in May, but when the payment arrived it was for just one month. It said: ‘It is incredibly stressful at present and general practice will be destabilised if funds continue not to come in.’

Other problems listed in the dossier include:

• Practices being forced to submit claims to tight deadlines – one practice was given just three-and-a-half hours’ notice to sign off QMAS problems and there are reports of late notice being given to practices to submit MMR vaccination claims.

• Unpaid enhanced services work – one practice told the LMC: ‘We are carrying on providing services for LESs and DESs which to date we have not been paid for. In the last two months we have only been paid £480. We cannot function with such little money coming in.’

• Incorrect payments being reclaimed with little explanation by NHS England.

• Practices having to submit multiple invoices, with one having to send the same invoice three times because it was lost.

• Incorrectly addressed cheques that had to be replaced.


Paying the bills

The problems have come at the worst possible time, with most practices reliant on payments from enhanced services to make their businesses viable in light of the continued squeeze on core GP funding.

Luke Bennett, partner at Francis Clark Accountants, says practices are finding that up to 10% of their total incoming funds are in doubt because of the payment chaos.

He says: ‘That is often tens of thousands of pounds, and that can certainly put pressure on bank balances. You might have to take out a temporary overdraft or put partner drawings on hold.

‘PCTs weren’t perfect but it was a smaller and more local team and you knew who to speak to and who should sort it out. Now it is one big organisation dealing with a larger number of practices and finding the person responsible for making that payment is half the problem.’

Dan Martine, healthcare partner at accountancy firm Kingston Smith LLP, says practices are struggling to make day-to-day payments – such as staff wages – because of a wide range of errors in payments and the ‘funding tap being turned off’.

He adds: ‘GPs have been given a range of reasons by Shared Business Service units as to why payment hasn’t been released; including anything from “We haven’t received the claim” to “You haven’t ticked the right box”, which is very frustrating for practices.’

He warns: ‘Practices could risk losing goodwill from suppliers, or even losing discounts that might be offered on fast payment – which could lead to higher future costs.’



Rosemary Smith, senior partner at RS Medical Accountancy, estimates that around one-third of practices could now face severe cash-flow concerns.

She says: ‘I think it is mainly the smaller practices and practices that run on a tighter line that are severely affected, because practices are managed in different ways.’

She adds: ‘Believe it or not a lot of practices have been overpaid by quite a significant amount. I did a report for one of my practices, a medium-sized practice, and they had actually been paid £70,000 too much – and the ridiculous thing is that they hadn’t even noticed. Because it came in June they assumed it was the right amount, because that is when the achievement money comes in. But they were overpaid for QOF, while their cost rent had been paid but not deducted.

‘I had four different practices in four different regions that had this issue with cost rent. But if you receive too much money you then get a big bill which you might not be able to pay. So as bizarre as it sounds, being paid too much can be just as damaging as not being paid enough.’


On a knife edge

The payment chaos has led to dire predictions from experts. Steve Morris, general manager at First Practice Management, the union for practice managers, says many practices are now on a financial ‘knife edge’.

He says: ‘Active management of finances, and the precise reconciliation of amounts due to amounts actually received, with a reasonable idea of timing, have all helped to keep practices in the black, for part of the month at least. Without that element of predictability this becomes next to impossible.’

The BMA has said that the current situation with some practice payments is ‘unacceptable’ and is in talks with NHS England and LMCs to try to solve the problems before it is too late for some practices.

Dr David Geddes, head of primary care commissioning at NHS England, told Pulse in a statement: ‘We are aware that GP practices have reported issues regarding payments. We are working with the GPC to identify and resolve these issues, and have written to all LMCs requesting detail of individual problems experienced.

‘We are now in discussion with NHS Shared Business Services to establish ways in which we can ensure payments from CCGs and area teams are speeded up and improved.’ A spokesperson for NHS Shared Business Services said: ‘For those payment processes we are involved in, we are working closely with NHS England to refine them.’

But Londonwide LMCs chief executive Dr Michelle Drage is still concerned. She warns that unless the chaos is swiftly sorted out there could be worse consequences yet.

She says: ‘Practices are so pared down to the bone now that they need every marginal payment they are due to be paid on time so that they can get the cash flow to pay their staff and their bills.

‘These local payments are what enable them to survive and when you don’t get them you either have to dig into your reserves or borrow from the bank – or go under.’