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PMS practices fear closure as accountants predict losses of up to £400k

Exclusive Individual PMS practices are preparing for losses of up to £400,000 over the next two years, accountants have warned, with their viability now threatened.

Pulse has learned of exceptional cases of GP practices facing losses of £300,000 and £400,000 but even ‘average’ PMS practices are preparing for losses of between £50,000 to £150,000 and are likely to have to cut staff and services, accountants warned.

It comes as practices and accountants have begun to calculate how much England’s PMS practices – counting for roughly 40% of all practices so potentially covering around 20 million patients – are looking likely to lose as a result of the reviews being held by NHS England area teams during this year and next.

The reviews are looking at £260m worth of funding received by PMS practices annually that a national review last year found was not linked to specific services. But while the plan was for the money to be ‘redeployed’ across GP practices to be fairer, accountants warned that this was a simplified way of looking at complicated GP funding and that patient services may come to suffer in the process.

Debbie Wakefield, a partner at Essex accountancy firm Edmund Carr and joint chair of the UK200Group’s healthcare special interest group, said practices advised by the firm could be in line for total reductions ranging from £50,000 to £400,000, which is not linked to specific services.

She said: ‘Losses of £400,000 is probably quite exceptional but I don’t think it is completely alone, unfortunately.’

In Essex, 63 of the 100 PMS practices have taken up a deal offered by the local area teams which offers them transitional funding when switching to GMS contracts.

But medical accountant Lizzy Lloyd, a partner at Lloyd Hubbard, said some practices fear they could lose up to £300,000 by giving up their PMS contract

She said: ‘I am aware that there are some practices that have not signed up [to the Essex deal] because they have a lot of funding to lose, probably around £300,000.’

‘They need to keep some of that money because otherwise they will have to cut services, which then may increase referrals into secondary care.

In East Anglia,

where a similar deal has been offered, practices were also fearing they will lose six-figure sums, she added.

She said: ‘Most of my Ipswich practices could lose between £150,000 and £250,000 and we have, of course, no data on how much of that they could earn back in new enhanced services.’

Bob Senior, chair of the Association of Independent Specialist Medical Accountants and Baker Tilly’s head of medical services, said he would advise anyone offered a phase-out deal to take it and reduce their service offering accordingly.

He said: ‘Probably you’re looking at [potential losses of] between £50,000 and £150,000 for a typical, routine PMS practice, with three partners. What you don’t know is whether if they do this national PMS review, whether they will give you a seven-year clawback or whether they will give you three, which has been common in past [PCT-led] reviews. So I think if that offer were on the table I would be struggling to see why you wouldn’t do that.’

He added: ‘[But] if you are being funded as if you were GMS then you need to then you’ve got to change your services back to match GMS. If you do nothing with the staff… then your’re going to be probably financially unviable.’

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