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The hidden traps in APMS contracts

APMS contract are 'alternative providers of medical services' and were a new creation in the 2004 contract.

There is a considerable variety in the quality of these providers, and although names such as Virgin and United Health might come to light, there are a number of GP-led APMS contracts in force where the PCT has put out to tenders practices formerly run by themselves with the GPs salaried. The feature of these practices is that the contracts are usually time limited unlike PMS or GMS contracts, and usually for a period of five years.

I met up with one of my excellent APMS practices which is coming into year four of their five years. It has been told that its contract will not automatically be renewed in year five, and that the contract will have to go out to tender. There are a number of issues  that are becoming increasingly important.

Firstly, the PCT are pushing for the practice to sign a lease for its premises. Now it sees the advantage of signing a lease as giving it security, but the other side of a lease is that it is an obligation to pay rent. Unless the lease has some clause bringing the lease to an end when the contract ends, or a series of break clauses that the GPs can exercise, it is possible that the GPs could find themselves having to pay rent for a surgery when they won’t hold a contract to provide services. The potential disadvantages outweigh the advantages.

Secondly, they are having to face the potential prospect of paying enormous redundancy costs. The staff they employ were previously employed by the PCT, and their service records are protected, so although they have only been employed by these GPs, their redundancy payment would cover all their years of working in the NHS. Since the current GPs are partners (and not a limited company) they would be liable personally to pay the redundancy costs

I have a worry that the new contract (due in the next few years) will try to limit the length of the GP contract so the worries I express above could be a concern for all the profession. Of course a limited-term contract would cause all sorts of other problems, a lender is not going to lend finance for a surgery if the income stream can only be guaranteed for five years, and how motivated can a partner be to develop a practice if that practice will be re-tendered in five years?

Time will tell if my anxieties are founded, but as you can see, the consequences would be serious.

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