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Why the future of PMS practices is increasingly insecure

Over the last year or so PMS agreements have been the subject of ‘value for money' exercises and cost reviews in many PCTs. 

Practices are informed that PMS is under review and that the PCT wish to create ‘equality' between PMS and GMS practices, and between the various PMS practices. The result of these reviews has seen financial gains for a minority of PMS practices, but not for the majority.

When faced with losing often substantial proportions of practice income, practices have been reluctant to accept the revised agreements offered by PCTs.  Typically this resistance leads to a threat to terminate the existing agreement, a threat that has been carried out by some PCTs issuing termination notices in the course of negotiations.


The legal situation

In April 2010 the Department of Health introduced what it called ‘clarifying' amendments to the PMS regulations, which effectively allowed PCTs to terminate these agreements without cause.

In a recent case, the judge held that the regulations were not inconsistent with the NHS Act, and that the PCTs were permitted to introduce the changes to practices' PMS agreements as introduced by the clarifying regulations to ensure that the PMS agreements were in line with the regulations. The Judge therefore dismissed the case.

PCTs across the country will count this case as an important victory and many will now assume that they are entitled to terminate PMS agreements without such actions being susceptible to challenge in the Courts.

However, the Court of Appeal commented that even if the power of termination existed in the form contended for, it would still remain subject to potential challenges in public law or based on human rights.

The judge in the recent cases expressly commented that not all possible public law challenges had been developed in either case. For instance, the judge noted that no challenge based on unreasonableness had been developed at the hearing.

Nevertheless, the result of the recent legal cases strengthens the position of PCTs. Practices faced with PMS reviews are in a more precarious position than at any time previously.

If practices do not accept changes advanced by PCTs in these reviews, it appears that there is an increasing chance that they will have their PMS agreements terminated or be forced to revert to GMS with the financial penalties that are likely to arise. 

Whether any legal arguments can be successfully deployed and upheld in the Courts to prevent such termination may have to await another case, but the position looks increasingly insecure for PMS practices.


What you should do

In the light of this Judgment previously stalled PMS reviews appear to be re-starting, although we have not yet had word of termination notices being issued on a large scale. 

Pragmatically, practices should seek to engage with their PCTs in negotiations following PMS reviews. Whilst it is fair to say that in our experience some PCTs are more willing to negotiate than others, practices that can secure the best deal possible (and justify to their PCTs additional worth of their work under their PMS agreements) will be in a better position than practices who do not engage, or take a belligerent approach.

Practices should, however, try to obtain written decisions/comments from PCTs during any current negotiations. Given the dramatic changes occurring in primary care, and to PCTs, it may become harder, and it has never necessarily been simple, to keep track of who, why, when and (occasionally) if, any decisions/concessions have been made.

When practices have relied on oral assurances in the past these comments may be long forgotten, and there is an increasing risk that the maker may no longer be part of the PCT (or even that the PCT may no longer be in existence) by the time any reliance is sought to be placed on this.

If terms cannot be agreed, then practice should seek advice from their LMC and, if they feel they have been treated unfairly or arbitrarily, for legal advice on whether their specific situation gives rise to any potential legal challenge.

Michael Rourke is an associate solicitor at Lockharts Solicitors