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How NHS reforms will affect practice finance

There are several steps practices can take now to prepare for the abolition of PCTs next April.

Make sure your practice’s financial administration is up-to-date
Make sure your practice’s financial administration is up-to-date

The Health and Social Care Act gives GPs the opportunity to ‘step up to the plate’ according to the DH’s commissioning chief Dame Barbara Hakin, but medical accountants are warning practices to get a grip on their finances before PCTs are abolished.

Dame Barbara, the NHS Commissioning Board (NCB) natio­nal managing director of commissioning development, expects most PCT staff involved in commissioning to be transferred to the NCB. But redundancies and leavers in other departments have led to practices reporting missed payments, overpayments and clawbacks.

Delayed payments
Russell Finn, a principal with medical accountants Ramsay Brown & Partners, says it is wise for practices to put away cash reserves as a ‘financial cushion’ to ensure there are sufficient funds for day-to-day running costs if PCT payments are delayed.

Faye Armstrong, a partner at medical accountants Dodd & Co, says practices are bearing the brunt of PCTs trying to get their ‘house in order’ before the handover, with some practices this year being asked to repay £40,000 of seniority pay.

‘The knock-on effect on practices is quite major, especially coming at a time when finances are under pressure from other areas like the superannuation rate increase,’ she says.

Now accountants are warning practices to make sure they are on top of their finances before PCTs disappear. This includes putting in payment claims early, ensuring GPs’ superannuation certificates are up to date and ensuring they have a formal premises lease to avoid expensive repair costs and prevent costly rent rises in the future.  

CCG objectives
Clinical commissioning groups (CCGs) have been tasked with making efficiency savings and practices should be prepared for these to be pushed onto them, so now is a good time to improve margins by reviewing existing staff structures and supplier costs.

Morag Miller, director of medical services at accountants PKF, says practices need to ensure they fully understand their financial position. ‘They need to be aware what they have influence over and where they don’t.

For example a lot of the income is based on population size and they have less control over that than other costs. They need to ask if they are staffed efficiently,’ she says.

Ms Armstrong says the ‘spring cleaning’ should not just be defensive and advises practices to do a skills and resources audit to work out what type of service the practice could deliver to meet their CCG’s aims and objectives, develop links with like-minded practices to enable partnership working and plug any gaps.

In the new NHS, CCGs will hold the funding for and commission local enhanced services from GP practices or other providers, with the NCB taking responsibility for directed enhanced services.

Monitoring the QOF
From April 2013, the NCB will be responsible for monitoring the QOF but the details of how this will happen have yet to be finalised. Dame Barbara says: ‘The design of local offices has not been completed but there is no assumption there will be sudden differences. How the QOF is monitored is something that we would need to try to improve.’

The NCB will also hold all practice contracts. Dame Barbara has hinted the board will step up reviews of PMS contracts once it holds locally and nationally negotiated contracts, but there will still be ‘GMS and PMS contracts in the early stages’.

The four waves of CCG aut­horisation are due in July, September, October and November 2012, with the NCB expecting to take three months to assess each batch. But GPC deputy chairman Dr Richard Vautrey says there is pressure on some CCGs to complete authorisation before they are ready.

According to the NCB, most CCGs have reached an ‘agreement with their SHA cluster about their configuration’ and

it expects the final number to be around 220 to 240. But some CCGs are being told by their SHA to merge because they are too small. 

CCG constitutions
Although NHS chiefs and acc­ountants are urging GPs to get involved with their CCG as soon as possible, the GPC is warning practices not to sign up to a CCG constitution they don’t feel comfortable with.

Dr Vautrey says: ‘Some practices are signing up to constitutions that place far greater responsibilities on them than is required by their GMS or PMS contract or indeed the Health and Social Care Act itself. They should not be expected to prescribe or refer in a certain way. I would advise practices to read the BMA guidance on what should be in CCG constitutions.’

This guidance states that each constitution should state how member practices can hold the CCG to account. Practices will also need to decide how involved their GPs are with their CCG and factor in locum cover for commissioning GPs.

Richard Vickery, senior manager at accountants PKF, says: ‘GPs are going to have to acquire negotiating skills to use with the CCGs for complicated contracts otherwise they will be taken to the cleaners.

GPs are being dragged into the real world. They can’t bury their heads in the sand. It is a bit like the PMS contracts, those who got in first got the better deals. It is an exciting time, but at the moment it is all wishy-washy.’

What practices need to do before April 2013
  • Put in claims as soon as possible.
  • Review past claims for enhanced services and QOF to check if payments have been received.
  • Ensure superannuation certificates are up-to-date.
  • Complete annual accounts early to identify missing sums.
  • Look at partners’ current accounts early to ensure the split is in line with partners’ profit-share ratios.
  • Ensure they have an up-to-date lease in place.
  • Build up a war chest.
  • Arrange an overdraft as a back-up plan.

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