The changing nature of running a GP practice, with all its pressures and complexities, means that most GP partnerships now recognise the need and benefit of having skilled managers supporting them.
One area where this is having a noticeable impact is within the structure of GP partnerships themselves. While it is still relatively rare, it is becoming more common for non-GPs- such as nurse practitioners, business managers or practice managers – to be offered partnership.
There are many reasons why a GP partnership may consider going down this route and it can have potentially broad-reaching benefits for a practice. Here, we take a closer look at what those benefits may be, along with the key legal issues that can arise.
Motivation & commitment
- For a manager, the offer of a partnership may be seen as fair reward for their enterprise, commitment, and business acumen
- Promoting a manager may help you retain a key member of staff
- It can incentivise and motivate employees as it demonstrates a clear career path
- Being the part-owner of a business rather than an employee can have a positive effect on perspective, encouraging a manager to think about the future and long-term viability of the practice
- Partnership provides a direct link between income and the overall financial success of the business, which can incentivize a manager partner to help maximize profitability and find new sources of income for the practice
- It can bring greater stability to a partnership, as the more partners there are, the less likely you are to face the ‘last man standing’ issue
- It can change the dynamics of a partnership for the better
- A manager may also introduce equity to the Partnership when he/she joins
Legal issues to consider
There are many legal issues that need to be considered before an offer of a partnership is made or accepted. It is also worth noting that a non-GP partner cannot be left as the ‘last man standing’, as they cannot (in most circumstances) hold the medical contract. So generally speaking you will always need at least one GP or other appropriate clinician to be part of the partnership.
Here’s what else you need to think about:
Personal liability: A full non-GP partner would assume unlimited liability for the debts and liabilities of the practice because he or she would be an owner of the business.
Practice insurance: Whilst a GP partner currently secures 100% indemnity insurance in respect of clinical claims, a non-GP partner would risk being sued if their responsibilities are not adequately documented. Therefore, the practice needs to ensure it is adequately insured.
Employment rights: These do not apply to profit-sharing partners because
they are independent contractors, not employees. Partners are not automatically eligible for authorised leave such as parental, maternity and paternity leave, or for the remedies for redundancy or unfair/constructive dismissal unless the partnership deed says so. An employee promoted to partnership would lose these rights.
Tax: As a profit-sharing partner, a non-GP partner would be classed as self-employed so would have responsibility for paying their own tax and national insurance contributions under Schedule D.
Pension: A non-GP partner can be part of the NHS pension scheme, and will join as whole time officers. Employees should take specialist IFO advice to ensure they understand this point before committing to the change in status.
Surgery premises: Will you require the manager to buy in? If so, contact your mortgage provider and any landlord (if applicable) to get their consent and check on any additional requirements. You will want proof of the person’s financial standing before they buy in.
Partnership deed: This would need to be amended to include the non-GP partner. The obligations clauses should ring-fence their exposure to non-clinical issues and responsibilities. You may also consider adding an indemnity from the other clinical partners, in respect of all other third party claims.
Areas of management/voting rights: You may consider limiting the manager’s liability to non clinical areas, such as finance, HR, premises management, IM&T, and data management, and potentially to restrict their voting rights to these areas.
One alternative, if you decide that a full profit sharing partnership is not going to be right for you, would be a so called “salaried partnership”. This offers a middle ground, whereby the non GP manager will continue to be employed as a staff member, whilst enjoying the status of partnership. They will retain all their employment rights with none of the risks or responsibilities associated with unlimited liability.
As with any major decision regarding your practice, it is always vital that you ensure that all parties involved are fully aware of the legal considerations and other implications before any formal steps are taken.
For more information about GP partnerships or any other issues associated with GP practices, please contact Daphne Robertson on 01483 511555 or email email@example.com
Whether you’re in a GP partnership or a single hander running your own practice, there are likely to be times and situations that prompt you to re-evaluate your position. Maybe you find yourself facing challenging circumstances, such as a dispute, or financial pressures which are making the practice unprofitable. You may feel your individual risk is too great if you have an insufficient number of partners to share the burden, or you need to act now to avoid the ‘last man standing’ issue. It could also be that you’re planning to retire or simply just wish to make a change….
Whatever the catalyst may be, one option you might be considering is handing back your GMS or PMS contract. Traditionally, opting to go down this route was rare but it is now becoming far more common. However, it can have serious implications, so before making any decision it is important to understand what the consequences may be and also what the alternatives are.
What does it mean?
To hand back your GMS/PMS contract, you first need to give notice in writing to NHS England in accordance with the regulations. The GMS notice period is 6 months for a partnership and 3 months for a sole practitioner. The GMS contract will come to an end on the last day of the month in which the notice period expires. The required PMS notice period is a minimum of 6 months regardless of the type of contractor.
By terminating your primary care contract your patient list will return to NHS England and your obligations to provide patient care will cease. You haven’t, however, closed your business. You have therefore stopped your income stream (including any rent reimbursement), but your expenses will continue to accrue until you finally close the business or find an alternative source of income.
The cost of closing a business can be significant and includes things like staff redundancies and meeting any lease or mortgage obligations. Most leases won’t allow you to break a contract early, even if your circumstances have changed, so your rent and any service charges may continue. If you have a mortgage, you may find you become liable for an early redemption penalty, which could run into hundreds of thousands of pounds. There are also likely to be a number of administrative and contractual relations which need terminating, some of which could give rise to further unexpected liabilities.
So it is important not to look upon handing back your GMS/PMS contract as a ‘soft’ option or stand alone solution; taking this route needs to be a very well planned and thought-through process, if you are to manage the many financial and legal implications.
What are the alternatives?
- For a single hander, an alternative route to consider would be to take on a new partner, or multiple partners, who would be able to take over the practice, allowing you to step down.
- For a partnership, a merger with another GP practice could be a way to open up new opportunities and other options.
- You could also look for another healthcare provider who may be willing to take over your contract, such as a GP federation, a local hospital trust or a private provider.
- Don’t forget that your local commissioner (CCG or NHS England) can work with you to help find an acceptable solution, potentially through financial assistance or other support mechanisms, since receiving the patient list back becomes an expensive problem for them to solve.
Handing back your contract can be the right answer in some circumstances, but it is an option which should never be entered into lightly. Make sure you have taken the right accounting and legal advice and are confident you fully understand the ramifications before you make your final decision.
For more information about handing back your GMS/PMS contract, mergers, retiring from practice, or for any other enquiries, then please contact Daphne Robertson on 01483 511555 or email firstname.lastname@example.org