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10% of practice income affected by NHS England payment chaos, estimate accountants

Exclusive Around 10% of practice income is being affected currently by delayed or missing payments from NHS England, estimate accountants who say many practices are facing severe cash-flow problems as a result.

Accountants said that the payments chaos revealed by Pulse earlier this month is particularly badly affecting the third of practices who are reliant on an overdraft or have smaller cash reserves.

LMC leaders in London, Birmingham and Essex have all complained that practices are failing to receive the full payments they are due, with reports of incorrectly addressed cheques, missing payments and unpaid enhanced services work.

Pulse reported last month that payments to GPs in London had been hit by the chaos, with some practices being threatened by bailiffs as a result - and accountants say the problems are widespread across different parts of the country.

The GPC has said it is now regularly meeting with NHS England about this and other issues and are working with them to sort out problems. Meanwhile, NHS England has said it has written to all LMCs to gather examples of the problems practices are experiencing.

Medical accountants say that all practices in England have been affected in some way by the problems - stemming from the handover of payment duties from PCTs to NHS England, CCGs and local authorities - but some more severely than others.

Accountant Luke Bennett, based in Cornwall at the firm Francis Clark, said many practices are facing a situation where up to 10% of their total incoming funds are in doubt due to missing, late or overpayments.

He said: ‘It is probably around 10% you would have issues with. That is often tens of thousands of pounds, and if that is money you’re chasing then that can certainly put pressure on bank balances. You might have to take out a temporary overdraft or put partner drawings on hold.’

Dan Martine, a healthcare partner at accountancy firm Kingston Smith LLP, added: ‘Practices are struggling to get their claims paid on time – or, in some cases, at all.’

He added: ‘GPs have been given a range of dubious reasons by Shared Business Services (SBS) 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.’

Mr Martine said affected practices are struggling to make day-to-day payments due to short-term cashflow gaps created by the ‘funding tap being turned off’.

He said: ‘In certain circumstances, critical actions such as paying staff wages have not been possible – let alone allowing for partners’ drawings. Since 1 April, practices have been affected by a wide range of errors on income statements, so only very capable and quick-thinking practice managers are taking the right actions to ensure their practices receive what they are entitled to.’

Rosemary Smith, from accountancy firm Baldwins, estimates around one-third of practices are likely to face severe cash flow concerns.

She said: ‘It is mainly the smaller practices, and practices that run on a tighter line, that are severely affected. Practices are managed in different ways - some partners don’t draw everything out and have a good cushion and to them it doesn’t matter so much as long as it balances out at the end of the year. Other partners take out all the drawings and for them it is very difficult.

‘I would say a third of the practices either run on an overdraft or they take out the maximum they can take out. Although there are fewer doing it now, some practices pay wages, tax and national insurance and then split the remainder as drawing every month. Those practices are going to see a big up-and-down swing in the money they are taking out because it is taking longer.’

An NHS SBS spokesperson said: ‘For those payment processes we are involved in, NHS Shared Business Services is working closely with NHS England to refine them.’