Thinking of setting up a private GP practice?
There has been much discussion in recent years about the rise of private GP practices within primary care and it is a subject we are increasingly being asked about by our clients.
Setting up a private GP practice is a complex area and for anyone thinking of taking such a step, there are many issues that need consideration. The priority must always be to ensure compliance with the many regulatory barriers.
Here, we share the first of a series of blogs on this topic.
What are the rules?
The NHS regulations are very clear. A practice providing GMS, PMS or APMS list based services must not charge any of its patients for treatments – regardless of whether these treatments are available on the NHS or not. (There are a few limited exceptions to this rule, which most practices will be aware of).
Setting up a separate business vehicle (eg a limited company) to provide the services may appear a potential solution to this, but it is a risky strategy, as it is highly likely to breach the regulations.
So, what can you do to ensure you comply?
Set up a distance away from your NHS practice
It’s critical you have robust processes in place to ensure that none of your private patients are registered on a list where you are the contractor.
The easiest way to do this is to set up your private practice well away from your NHS practice area. You will still need to undertake checks, but the risk of being in breach will be greatly reduced.
Conduct thorough employee checks
You also need to undergo checks to ensure any GPs you employ or otherwise engage in the private practice, do not have an interest in an NHS list based contract. If they do, then you will need to extend your checks to cover these patient groups too.
One slightly grey area is where a locum GP is providing services for both an NHS practice and a private GP practice with overlapping patient lists. It’s certainly arguable that this breaks the rules, but as the regulations aren’t entirely clear it will depend upon the individual circumstances of each case.
Make sure patient records are kept up to date
Data Protection rules will prevent you from using your NHS practice list to run your checks. You will, therefore, need to ask each private patient to confirm where they are registered and then have steps in place to ensure these records are kept up to date.
Our recommendations
If you’re considering setting up in private practice, then bear in mind that the rules associated with this are complex and the consequences of getting it wrong are serious. That said, while the rules are strict, it is possible to put controls in place to ensure compliance. To help you navigate the process, we would always advise you seek the advice of specialist, professional advisers.
For more information, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
News
Salaried vs Fixed Share Partners
Managing partnership changes and staffing are two of the most common issues any practice will deal with and how they are handled can have long term implications, especially in relation to a new partner joining the business.
One area that can cause confusion is the difference between a ‘Salaried Partner’ and a ‘Fixed Share Partner’. The two terms are often used interchangeably, but they are very different and it’s important that a distinction is made.
Here, we look at the key differences and the implications they may carry for your practice.
What is a fixed share partner?
A fixed share partner is an owning partner in the business. As such, they should sign the Partnership Deed and will have whatever rights and obligations are stated therein.
- As a partner they won’t have employment law protection
- They will have an agreed minimum monthly income and additionally some form of profit share
- They will share in the losses but may be indemnified against some or all of these by the other partners
- They will have injected some capital into the business
- They will be entitled to attend meetings and to participate in partnership decisions
- They will have voting rights
- They will not be controlled by other partners
- They will be taxed as self-employed individuals
- They will be entitled to opt in to the NHS partner pension scheme
- They will have some ownership over the GMS contract and potentially also the PMS contract
What is a salaried partner?
In contrast, a salaried partner is normally a title given to a senior employee. As such, they won’t sign the partnership deed and will be working under some form of employment contract (even if it is called something else).
- They will be entitled to a salary and potentially some bonuses – although usually not related to profit
- They will have full employment law protection
- They will be at no risk of sharing any losses
- They shouldn’t have any voting rights in the partnership and there will be elements of control by the other (owning) partners.
- They are taxed as an employee paying PAYE & NI
- They are entitled to opt in to the NHS employee pension scheme
- They will have no ownership over the GMS contract and would not normally have any interest in the PMS contract
- They must guard against third parties regarding them as ‘real’ partners and thereby inadvertently becoming liable for the partnership debts.
Why does it matter?
Typically, what practices are trying to achieve with a Fixed Share Partner is a partner who has many of the characteristics of an employee, while a Salaried Partner will typically be an employee with some of the characteristics of a partner. The problem is that the law only recognises employees or partners, there is no middle ground.
The most important point to remember is that the title itself does not determine the real status. That can only be established by analysing the detail of the arrangement.
If a title is mismatched to the actual legal status of the person, there is a risk of creating legal uncertainty. This could lead to any number of future problems, most of which will be costly to resolve.
Our recommendations
We will consider the pros and cons of each option in a future article, but our main piece of advice for anyone considering appointing or becoming a fixed share or salaried partner, is to ensure you are clear from the outset about the outcome you are seeking to achieve.
The starting point is to decide whether you are welcoming a new partner, or a form of senior employee. All other aspects of the role flow from there, and it is important to ensure that you don’t accidentally incorporate key features of one type into the other. This is all too easily done and the consequences of getting it wrong can be serious.
If you’re going to make staffing changes, especially if those changes are to a ‘partner’ role, please make sure you seek specialist advice to ensure the arrangement is documented appropriately.
For more information, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
News
NHSPS lease – should you sign, take action or do nothing?
The new NHSPS lease and the prospect of significantly increased service charges continues to be a serious concern for many practices. It is a topic we have covered in detail on this blog and is one which raises many concerns for every practice affected. One question we are being asked frequently is ‘what action, if any, should we be taking now?’ With the application deadline for financial incentives to practices who sign up fast approaching, we thought it timely to update you on the current position.
The story so far…
We have successfully negotiated a number of beneficial changes to the Heads of Terms originally presented to our clients by NHSPS. However, some aspects of the service charge formula are proving difficult to agree. Our clients are awaiting revised proposals from NHSPS, but these have not been forthcoming and it is unclear when they might arrive.
Incentives to sign
The deadline to access the financial incentives on offer from NHSPS is currently set as 30 November 2017. However, given the lack of progress that has been made in getting practices to sign up, we anticipate that this deadline may be extended.
Options
Nationwide, there are very few practices which have signed the new NHSPS lease. Usually this is because the value of the incentives on offer is far outweighed by the ongoing future cost of the liabilities NHSPS is seeking to impose – particularly in relation to service charges.
This is an issue we have previously highlighted:
- What can you do about inflated NHSPS service charges?
- How to Successfully Negotiate a NHS Property Services or CHP Surgery Lease
It is important that you try not to be pressured into signing a new lease until any historic service charge disputes have been resolved and you are satisfied with the level of future service charges.
In the interim, we advise you continue to maintain service charge payments at historical levels.
Unfortunately however, this brings its own problems and cannot be seen as a long-term solution. Over time, your practice will change through partner changes, mergers, or increases/decreases in patient numbers. These changes may result in you having different requirements for your building.
If you then seek to change the basis of your occupation, such as by increasing the space you occupy, this will constitute a change in your current lease arrangements. NHSPS may choose to refuse consent unless you agree to an increased service charge for the whole.
Similarly, trying to share the potential liabilities on historic service charge claims between current, new and former partners will be a recipe for dispute.
Our recommendations
Overall, practices should only sign the lease once they are happy with the terms and any service charge issues have been resolved. It is a complex area and one with lasting financial implications, so it is always advisable to seek the advice of an experienced legal team.
If you would like our assistance, with this or any communication from NHSPS which has given rise to concern, then please do not hesitate to get in touch.
For more information, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com