The CMA and Care UK dispute over top-ups for residents entitled to Continuing NHS Healthcare

There’s been some pretty poor reporting, in the specialist and general press and online, of the outcome of the dispute between the Competition and Markets Authority and Care UK, a large care home company, over fees charged to residents entitled to Continuing NHS Healthcare, a funding status that obliges the NHS to pay for the care provided.

Care UK’s agreement to pay over £1m back to clients has been conveyed as  being all about additional payments, paid by individuals, on top of the NHS’s continuing health care fees (sometimes called top-ups). The majority of those affected will receive a pay-out of over £1,000 with some receiving substantially more, apparently.

The CMA is reported as contending that Care UK had broken consumer protection law by charging the additional fee because it was unfair and contravened NHS rules, which “require that Continuing Healthcare residents must not be required to pay towards their essential care.”

We think that the maths repay some consideration. £1m divided by 160 residents is £6250 each, on average. If these additional payments were £300 a week, and some residents are getting only £1000, then that means that these residents paid these top-ups for between 3–4 weeks, and 20 weeks – 5 months – but then stopped – which doesn’t make sense, because the fee would be ongoing for the duration of the stay.

The reports say the agreement came after the CMA launched legal action against Care UK in February 2019. But when one looks back to see what that was reported to be about, one finds that THAT dispute was about Care UK’s UPFRONT ‘admin’ fees, alleged to be breaking consumer protection law as a substantial non-refundable administration fee from residents for which they received no services or products. In that context, 1600 residents were affected, not 160, and some £3m was at stake. That represents £1875 each on average – but once again, a very small sum, equivalent to only 6 weeks of such supposedly ongoing fees?

It’s worth noting too, that when first embroiled in that dispute Care UK was saying that it was doing initial care assessments by way of example as to what the fees were for: we are guessing that some of the residents charged may have found the evidenced opinions in those assessments positively useful in going on to GET free CHC status in the first place.

When one appreciates the press release is short on detail, the reporting that 160 are now being paid back £1000 on average may mean for THAT type of upfront or admin fee, not a top-up.Each would begetting back £625 each, which would make much more sense as an upfront golden hello to a premium home that was giving them a great assessment which would help them get CHC, rather than an ongoing weekly top up.

Care UK’s stance

On the topic of additional payments, despite agreeing to pay these back, the Care UK spokesperson has now said: “The CMA’s action to stop us offering families the option of placing their loved ones in a premium home by making a personal contribution in addition to NHS funding is a backwards step in terms of consumer choice.

CASCAIDr can only agree – for reasons set out below.But we do not think that the company  should have wimped out on this footing: “We agreed to settle with the CMA to enable us to focus on the more pressing challenges facing the sector at present.” There was a much better reason, which we explain in our conclusion, below.

The spokesperson said this:

“Over the period we offered this option, Clinical Commissioning Groups (CCGs) were supportive of having access to additional homes, [ie ones that would not take the NHS rates offered, because uneconomic if one is in business to make a profit, we would add] and the small number of families involved, welcomed the additional choice it provided. The enhanced fee covered a range of benefits enjoyed by residents in a premium setting, including spacious en-suite rooms, on-site facilities such as cafes and cinemas, a wide range of lifestyle activities and a premium dining experience. These families always had the option of more modest, fully funded homes as an alternative.”

“In light of unclear NHS guidance and the widespread nature of these fees across the sector, we reject the CMA’s suggestion that they were unfair… As these fees are common practice with a great many other care home providers, we are at a loss to understand why the CMA has singled out Care UK.”

The so-called rules – from the 2018 Framework on NHS Continuing Healthcare

Here are the ‘rules’ in question – they are not laws, please note. They form part of government guidance about government policy, and as described, they are unclear, and easy to criticise, from a legally literate perspective!

The fact that the guidance assumes that people on CHC will have a care plan that is translated into a contract with the care home, that actually takes responsibility for what it is that the fee, already pre-agreed through procurement exercises, will actually cover, is particularly astonishing, for those who know anything about the way the sector works.

From a cursory reading of this ‘Guidance’ one would think that all such care homes all over the country are all signed up to the so-called nationwide NHS Continuing Healthcare E[lectronic] contract, but how wrong one would be!

Care homes have costing models based on their HQ costs and investment in LAND – they do not charge an individuated fee based on exactly what the person gets.

And they cannot be told how to operate; they are private businesses, whose rates and operating principles are either acceptable willing providers for the commissioning CCG’s perspective, or not.

We feel the urge for an FOI exercise, coming on, here!

Another part of the wording deserving of astute scrutiny (and then scorn!) is the point at which it suggests ensuring that any such ‘wants’ being separately contracted for should be met by ‘different’ staff to those delivering the services commissioned by the NHS! Clearly the authors have never worked in a care home.

Often, getting on to a CCG’s provider list will have required care homes to have signed up to arbitrarily low rates for whatever the needs of any CCG client then pushed through their doors might turn out to BE. Whilst that keeps the home’s beds filled most of the time, the CCGs will also need more suitable beds than they could ever get from the providers on that framework, to meet their own duties to all those qualifying for CHC!

So not only is it the exception rather than the rule that one can work out, from someone’s status as a CHC patient, or their decision support tool scores, OR their care plans (if they even have one of those), what the contractual obligation of the care home provider actually is by way of care inputs – it is also inevitable that these additional payments will always – in fact – BE “allowed”.  They are best seen as a collusive bridge that suit both parties to the main CHC contract – the care homes AND the NHS commissioners, in light of inadequate funding for the real cost of care, it is suggested, and a fact of life.

So now for a close look at these ‘rules’:

270. The NHS care package provided should meet the individual’s health and associated social care needs as identified in their care plan. The care plan should set out the services to be funded and/or provided by the NHS…

271. The decision to purchase additional private care services should always be a voluntary one for the individual. Providers should not require the individual to purchase additional private care services as a condition of providing, or continuing to provide, NHS-funded services to them. The CCG should make this clear when negotiating terms and conditions with the provider.

272. Where an individual advises that they wish to purchase additional private care or services, CCGs should discuss the matter with the individual to seek to identify the reasons for this. If the individual advises that they have concerns that the existing care package is not sufficient or not appropriate to meet their needs, CCGs should offer to review the care package in order to identify whether a different package would more appropriately meet the individual’s assessed needs.

274. There should be as clear a separation as possible between NHS and private care. In the Additional Private Care guidance, ‘separation’ is described as usually requiring the privately-funded care to take place in a different location and at a different time to the NHS-funded care. However, many individuals eligible for NHS Continuing Healthcare have limitations on their ability to leave their home due to their health needs. … For example, where a person receives 24-hour NHS-funded support by way of a care home package it may not be possible for privately-funded care to be provided at a time that is separate to NHS-funded care. However, in such circumstances, the private care should be delivered by different staff to those involved in delivering the NHS funded care at the time it takes place and they should not be delivering treatment, care or support identified within the care plan as being part of the NHS-funded service.

275. Based on the above principles, examples of additional private services which might be purchased separately include hairdressing, aromatherapy, beauty treatments and entertainment services.

Higher cost care packages

279. The funding provided by CCGs in NHS Continuing Healthcare packages should be sufficient to meet the needs identified in the care plan, based on the CCG’s knowledge of the costs of services for the relevant needs in the locality where they are to be provided.

280. Where an individual indicates a preference for higher-cost accommodation or services, the CCG should liaise with the individual to identify the reasons for their preference.

281. Where an individual’s indicated preference is identified by the CCG to be necessary to meet their assessed needs, the CCG should meet this as part of the NHS Continuing Healthcare package. For example, an individual with challenging behaviour may need to have a larger room because it is identified that the behaviour is linked to feeling confined, or it may be agreed that the individual requires a care provider with specialist skills rather than a generic care provider.

282. Where an individual’s indicated preference is not an assessed need, it is subject to the criteria outlined in the Additional Private Care guidance above. An example of this might be where an individual would like a larger room which is not related to their needs.

283. In some circumstances, individuals become eligible for NHS Continuing Healthcare when they are already resident in care home accommodation for which the fees are higher than the relevant CCG would usually meet for an individual with their needs. This may be where the individual was previously funding their own care or where they were previously funded by a local authority and a third party had contributed to the fees payable. This is permissible under legislation governing local authority provision but is not permissible under NHS legislation. For this reason, there are some circumstances where a CCG may propose a move to different accommodation or a change in care provision.

284. In such situations, CCGs should consider if there are reasons why they should meet the full cost of the existing care package, notwithstanding that it is at a higher rate. This could include that the frailty, mental health needs or other relevant needs of the individual mean that a move to other accommodation could involve significant risk to their health and well-being.

285. Where an individual in an existing out of area placement becomes eligible for NHS Continuing Healthcare the care package may be of a higher cost than the responsible CCG would usually fund for the person’s needs. The CCG should consider whether the cost is reasonable, taking into account the market rates in the locality of the placement. They should also consider whether there are other circumstances that make it reasonable to fund the higher rate. Examples might include: where the location of the placement is close to family members who play an active role in the life of the individual, or where the individual has lived there for many years and it would be significantly detrimental to the individual to move them.

286. CCGs should deal with the above situations with sensitivity and in close liaison with the individuals affected and, where appropriate, their families, the existing service provider and the local authority. Where a CCG is considering moving such an individual because there is no justification for funding a higher cost placement, any decisions on moves to other accommodation or changes in care provider should be taken in full consultation with the individual concerned and put in writing with reasons given.

287. Where the decision is made not to fund the higher cost package, the new accommodation and/or services should reflect the individual’s assessed needs as identified in their care plan. This should take into account personal needs such as proximity to family members. Individuals should be provided with a reasonable choice of providers wherever possible.

289. Where an individual becomes eligible for NHS Continuing Healthcare and has an existing high-cost care package, CCGs should consider funding the full cost of the existing higher-cost package until a decision is made on whether to meet the higher cost package on an ongoing basis or to arrange an alternative placement.

CASCAIDr’s commentary

This revised section on top-ups is actually less clear than the previous version, that additional payments will always HAVE to be permissible, as long as the item or notion driving that additional cost is not part and parcel of the assessed needs, nor part of the NHS contract for what it has bought.

The guidance fails to grapple openly with an obvious truth – there is no way that any person in the NHS can prevent a person from spending their own money on additional care, if they want some.

Therevision gets bogged down in trying to distinguish personal wants, which may be funded through a person’s paying for them, from wants that are inextricably bound up with the placement package that is required to cover the person’s needs, which could be paid for by the NHS as part of its fee, but where recoupment of the person’s extra contribution would be embarrassing and problematic to the NHS: it would look like NHS was charging for care.

It tries to suggest that ‘beauty’ treatments are on the acceptable side of the extras line (clearly these aren’t ever going to be a response to assessed needs) but that ‘higher cost’ homes are not permissibly funded through top-ups, when what it needed to say was ‘not permissible through top-ups that are funded directly by the NHS in full, and then recouped’.

Who knows whether this wording was deliberate and thus disingenuous, or just unfortunate?

It leaves the impression that a self-funder who wants to keep hold of their lifestyle choice of a larger room, nicer furniture, more facilities and higher staff ratios than the barely adequate minimum, after qualifying for CHC, cannot expect to stay where they chose to go before qualifying, and must therefore be moved on, for its own sake, when qualifying for CHC.

There’s nothing wrong with a care home accepting an ex-private funder on a CCG standard rate for standard care for a CHC person – with any non-needs related extras or shortfall being set as a percentage, or a chunk, and being met by relatives or the client, in a clearly separate contract, to get the home’s income back up to its headline rate.

It may be harder for a person and a care home to agree how to express that willingness, in advance, but not impossible, not with proper legal advice!

It has been clearly allowed for regarding s117 Mental Health Act aftercare arrangements – another group of fully funded clients, it should be noted.  

The trouble is, of course, it would mean that the NHS contract for CHC would have to identify what standard care is, for any particular level or profile of need, and until we found South Warwickshire CCG’s policy below, we would have bet money on the position that no NHS care commissioner or care planner in the history of CHC has ever wanted to have to do that

But here is South Warwickshire CCG’s 2019 policy, which is a model of its type, in our view, from a legally literate perspective.

Where an individual is funding additional non-healthcare or healthcare services, the associated costs to the individual must be explicitly stated and set out in a separate agreement which should be provided to the CCG to ensure the avoidance of duplicate costs, and for record keeping purposes.

If the individual chooses to hold a contract for the provision of additional services, it should be clear that the additional payments are not to cover any care provision (relating to the individual’s assessed needs) which is funded by the CCG.

In order to ensure that there is no confusion between the NHS and the privately funded services, the CCG will enter into a legally binding service agreement with the selected care provider which details the provision by that provider of a defined level of health and social care to the individual. This will expressly be independent of any arrangement between the selected care provider and the individual (and/or their representative) and will be expressed to continue notwithstanding the termination of any arrangements made between the individual (and/or their representative) and the care provider.

The implication in the NHS CHC framework that a CCG is actually going to force a move on someone who’s able to pay the shortfall, or who had contracted privately in advance with a posh care home to pay a top-up if they ever become a CHC patient, (or when they deplete under the local authority threshold for that matter) would be ridiculous.

In fact, the 2018 Framework properly provides many justifications – on the facts of the individual case – encouraging any CCG in that situation to accept that it may need to pay the home’s full amount.

The Framework MUST to do that, to be legal, because in this country, right now, both the Human Rights Act and the public law principle (that when one is bound to meet need, one must take all relevant considerations into account and do so appropriately) necessarily inform and pervade care planning law. CCGs can be judicially reviewed and not just complained about, for unlawful and indefensible stances on what constitutes an appropriate care plan, and it is worth noting that that is NOT mentioned in the Framework!

CASCAIDr’s conclusions

If one goes to the CMA’s cases page to look at the undertaking, one can see the offending contract term in the Care UK’s resident’s agreement to pay the top up.

It appears not to have been done in advance when a resident first entered the home, privately, being worded to cover both continuing residents and those newly qualifying for CHC from the outset.

It does say that the Care UK policy is not to keep a client if the fee is not what it has been charging or wishes to charge for a room, and says the agreement to make the shortfall payment is sufficient to waive that policy (thereby making it a condition, regardless of whatever sum it has agreed to take from the CCG!).

It is specifically made part of the agreement that it might not even be for an enhanced room! It simply refers to the shortfall, and not to any given element, enhanced service or extra, on top of what the basic service (the one that would have been contracted for by the NHS) would have been seen to involve.

And the agreement involved waiving any right, ever to allege that the shortfall amount was invalid, illegal, void or otherwise not payable.

So it is unsurprising, in light of that information, which is in the public domain, that Care UK fell on its sword; it was fortunate that the CMA allows corporate bodies in this position to resolve disputes without admission of wrongdoing.

We can only suggest that the CMA dispute could have been avoided, perhaps, if Care UK’s management had been better advised on the legal framework, and how to reflect what CAN be charged, and why, in its contracts. The terms under scrutiny took no account of the National Framework, however open to criticism that that Framework is, and amounted to claiming entitlement to double charge for facilities and services which had already been covered by the NHS contract.

We doubt that Care UK’s residents and their families will object to being repaid, or care to stand up for choices which they or their families made capacitated decisions about. But we think that suggesting that NOBODY can ever contract to pay an additional payment, for the future, and that that is a matter of legal rule, is misleading and irresponsible.

Other large care home management teams should take note if keen to avoid this sort of reputational debacle in future.

CASCAIDr Trading Ltd, the trading arm of CASCAIDr the charity, can always advise corporate care providers from the private as well as the voluntary sector on these matters: any profit from the charges goes to shore up the charity itself!

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