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What structures can primary care networks adopt?

The BMA has suggested five structures that primary care networks could operate under, but there are many issues that practices need to consider.

(Picture: Cultura/Getty Images)
(Picture: Cultura/Getty Images)

In its recent Primary Care Networks Handbook the BMA put forward a number of structures and employment options that networks could adopt. What is right for each network will depend on the situation in your local area and any current at-scale or collaborative working already underway

The BMA recommends networks seek independent legal and financial advice at a network level to help them decide the most appropriate structure. Under the network contract DES practices will each receive payment for taking part, but all other funding needs to be paid to a single nominated provider.

Below, Medeconomics highlights the key issues networks will need to consider and the possible structures they could adopt.

Employment liabilities

Given that the workforce employed by the network is likely to expand significantly over the five years of the contract, practices may want to look at ways they can limit their exposure to employment liabilities. The BMA says that for this reason limited liability companies may be an attractive option. However there are some problems with this approach.

Under NHS rules, for staff to have access to the NHS pension scheme their employer must hold an NHS contract. If practices are considering using an limited liability vehicle, for example an existing GP federation or a completely new organisation, then staff employed by that body may not be able to access the NHS pension under the network contract DES.

The BMA says it is currently in discussions about this and is ‘hopeful of a resolution’, but warns that it is unlikely this will be in place by July 2019 when networks get underway. The union says that practices may want to consider one of the other structures to begin with and move to a separate provider model at a later date when this issue is resolved.

VAT

The structure practices choose may also result in them inadvertently attracting VAT charges. The provision of health services is exempt from VAT, but the provision of healthcare and back-office staff is not and therefore some structures could find they need to pay VAT if they fall under the latter interpretation. The BMA and NHS England intend to provide more advice on this shortly. However the recommendation is that networks take expert advice on their specific proposals to ensure they are fully aware of the consequences.

CQC

It is also possible that practices setting up a separate company to employ staff may also need to be registered with the CQC, depending on who is providing the ‘regulated activity’.

Possible operating models

There are more details about the pros and cons of the different operating models in the BMA PCN handbook, but below is a brief overview.

Flat practice network

Under this structure all practices would be equal and employment contracts shared across the practices – however one practice would have to be nominated to receive all payments. Practices would need to sign a ‘robust’ network agreement, which would specify that the contracts relating to the network and its workforce are jointly entered into and the liability is jointly split. Financial matters should also be clearly documented.

Although all practices would be regarded as the employers of new staff, one practice would have to be the paymaster (the BMA suggests this would be the nominated payee) and it is their employment procedures that would apply to the staff.

The BMA recommends that practices consult their employee liability insurance provider to ensure they are fully covered. Liabilities may prove an issue because they will be shared across the practices, and most likely involve unlimited liability.

Lead provider

These networks would choose one of its practices to act as the lead provider. This practice would be the nominated payee, employ any new staff and enter into any contractual arrangements if necessary on behalf of the network.

Staff would be ‘seconded’ out to other practices as necessary, or work across the network via a clause in their contracts stating their place of work was the network as a whole. Secondment arrangements would need to be clearly documented. Again, the BMA recommends practices discuss these arrangements with their employer liability insurer to ensure they are covered.

The lead practice will be responsible for network employee costs, liabilities and all HR responsibilities as they would for any other staff they employ. There may potentially be VAT issues with this model if it is deemed that the lead practice is providing staff (not VAT exempt) to other practices rather than healthcare services (VAT exempt). This model could also involve the need for subcontracting between parts of the network depending on service arrangements.

GP federation/other provider entity

Under this model the federation or provider would be subcontracted to deliver services required by the network contract DES and employ new staff. However, funding for the DES would need to be paid to the member practices and then passed to the federation, the BMA says, unless the provider was part of a primary medical services contract.

This model limits the liabilities practices are exposed to, but staff employed by the provider are unlikely to be able to access the NHS pension unless it holds an NHS contract. The BMA suggests that many networks may decide to set up under a different model and move to this structure once this pension issue is resolved.

The provider may also need to be registered with the CQC depending on who is providing the ‘regulated activity’. There are also potential VAT issues if the provider is deemed to be providing staff rather than healthcare services.

The BMA says that practices should consider whether the provider is too big or far removed from the network and whether it is undertaking other services that might affect its ability to deliver the DES. The network will also need to ensure any subcontracting arrangements comply with GMS regulations.

Super practice as a network

How this model will work depends on the contractual and geographical status of the super practice. Size may also be an issue if the practice has a population of over 100,000. The BMA suggests the super practice would need to create an internal ‘network’ within its sites, with each neighbourhood of practices operating as a mini network.

The main issue with this model would be geography if the superpractice was split over a wide area that wasn’t coterminous with other providers.

Non-GP provider employer models

The BMA says that practices may want to ally with another local healthcare provider, such as a community trust. In these case the non-GP provider would be signed up to the network agreement along with the practices. It would employ the staff available under the DES on the practices’ behalf as well as potentially using their own staff. Network funding would need to be paid to the nominated practice and then passed on to the provider.

Practices will need a robust network agreement and there are possible VAT issues if the provider is deemed to be providing staff rather than health services. The BMA also raises concerns about whether this model would allow practices the control and longevity to develop and drive the network as they wish.

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