This site is intended for health professionals only

Analysis: Payments in disarray

How big is the payments problem?

Ever since the handover from PCTs in April, practices have reported problems with late, incomplete or unidentifiable payments. Eight months on, GPs are continuing to experience accounting glitches on an unprecedented scale.

Almost half of the 586 GPs who responded to a Pulse survey last month said they were facing ongoing issues with late or incomplete payments, revealing just how persistent and widespread the chaos has been.

LMC leaders have suggested that, in some areas, problems could be even more endemic. Dr Brian Balmer, chief executive of Essex LMCs, which covers 273 practices, told Pulse: ‘We had written comments or complaints from 50% of practices a couple of months ago, and can assume this is only a sample. I would expect 100% to have had difficulties. It’s that bad.’

On the south coast, Dr Nigel Watson, chief executive of Wessex LMCs, reported that ‘all practice managers’ are having problems reconciling payments.

What has the impact been?

The impact on practices has ranged from the frustrating – having to take out overdrafts – to the scary, with the threat of bailiffs turning up at the door.

Some LMCs have been assembling dossiers of all the problems suffered by practices. Birmingham LMC has compiled one such dossier, seen by Pulse, which highlights problems reported by GPs that range from missing LES payments to statements showing superannuation deductions for staff who are not in the NHS pension scheme.

Birmingham LMC also had to intervene to prevent bailiffs visiting a practice to seize property, after a mix-up over business rates payments between the NHS England local area team and the local authority. The area team had ignored council warnings about non-payment.

In Doncaster, more practices threatened with bailiffs were asked to forward any unpaid bills to the area team after they were given court orders due to outstanding bills for basic services, such as rent and heating, because they had not been reimbursed for them.

Non-payments are also affecting cash flow. Another practice in Birmingham, owed £40,000 for missing fourth-quarter payments despite submitting claims on time, was told documents ‘might have got lost’.

Dr Watson says there were a couple of practices in Wessex who found an unexplained £30,000 in their bank accounts. ‘Luckily they were able to work it out and some practices have actually given back money for work they’ve been paid for but haven’t done,’ he says.

When will it be resolved?

In October, NHS England set up a working group that included representatives from its finance team, together with the GPC, NHS Shared Business Services and IT service providers. And, according to NHS England, it is starting to bear fruit. The labelling of payments – which NHS England says is the cause of most of the problems – was due to be sorted out by the end of November, with the rollout of a pilot scheme. 

In a recent interview with Pulse, NHS England’s head of primary care Dr David Geddes offered a ‘cast-iron’ guarantee that all the current payment issues would be cleared up by April to enable GPs to prepare their year-end accounts.

But even if issues are resolved by April, practices with their accounting year-end this month will find it difficult to work out what they’ve been paid for and what’s still to come, which will in turn affect their financial plans for next year.

Dr Richard Vautrey, GPC deputy chair and a member of NHS England’s GP payments working group, says: ‘Practices need it sorted out now.’

Dr John Canning, chair of the BMA’s professional fees committee, is pessimistic about the prospects of a solution. ‘Unfortunately I can’t actually see this getting sorted until next financial year, when area teams know what they are working with,’ he says.

‘You get the impression that PCT finances worked by smoke and mirrors and if the area teams can’t do the same thing, there are going to be gaps.’

What about the long term?

As if the problems were not bad enough, an NHS England board paper submitted to its November meeting set out plans for swingeing cuts to primary care services offices – responsible for payments to practices – with the aim of saving £40m.

The paper says: ‘Delivery of £40m savings will require a significant rationalisation of existing PCS offices and staff levels.’ It claims this can be ‘achieved safely by September 2014’.

Dr Vautrey says the cuts do not come under the remit of the payments working group and as a result have not been discussed.

He adds: ‘We’re very concerned about this. NHS England simply can’t allow it to compound the current situation. They need to produce evidence as to how they won’t let this affect practices.’

Dr Robert Morley, executive secretary of Birmingham LMC, has written to local GPs warning them of the potentially dire consequences.

The letter says: ‘Please make sure that you have appropriate financial contingency plans in place to enable adequate practice cash flow to ensure business viability in the event of interruption to timely and appropriate payments to your practice. I would strongly advise that you speak both to your accountants and to your bank managers as soon as possible.’

Dr Canning adds: ‘If it’s bad now it can only get worse; it’s really not acceptable. We’re trying to run businesses but can’t plan our cash flow. GPs don’t know if they can invest and take on new partners or invest in staff because of the instability.’