Do PCN companies need to register with the CQC?

When advising PCNs on a possible PCN incorporation, a common misconception which we encounter is that the PCN company must register with the CQC. In practice, however, this is rarely the case.

A PCN, as created by the PCN DES, is a contractual ‘sharing’ relationship between its core network practices. These sharing arrangements create well-documented problems in relation to employment, VAT, shared liability and more.

How an incorporated PCN works around these issues

An ‘incorporated’ PCN gets round these problems by creating a structure which sits alongside the PCN in the form of a company owned and controlled by the core network practices. That company is generally used in two different ways:

1. As a ‘classic’ PCN company which employs PCN staff and supplies their services to the core network practices. These staff are reimbursed either directly or indirectly from PCN DES monies.
2. As a contract holder for non-DES services, which services are then subcontracted to, and delivered by, the core network practices. This second use is less common but is likely to increase with the NHS’s new 10-year plan and the introduction of single-neighbourhood contracts.

What does the CQC actually regulate?

The first critical thing to note is that the CQC only regulates entities which provide regulated services. Clearly a PCN company is an entity, but so is a partnership, or a person. The only ‘thing’ which is not an entity is the PCN itself, since that is a contract (which is why the CQC cannot regulate PCNs).

Since the PCN company is an Entity, it COULD be regulated by the CQC, but whether it SHOULD be regulated will depend on whether it ‘provides regulated services.’ The fact that the company employs staff who are involved in delivering regulated services is irrelevant. The question is whether the entity itself is responsible for the delivery of the regulated services, regardless of who actually employs the staff doing the work.

The Key Regulatory Principle

The underlying rule is explained in some helpful CQC guidance from 2023:
https://www.cqc.org.uk/guidance-providers/gps/gp-mythbusters/gp-mythbuster-106-primary-care-first-contact-practitioners-fcps

The critical sentence in that guidance explains that “The meaning of ’employed’ in the [Health and Social Care Act 2008 (Regulated Activities) 2014 Regulations] is wider than staff employed on an employment contract. It means anyone who works for the provider, under their ongoing direction and control.” That phrase “under their ongoing direction and control” is critical.

Essentially, where ARRS staff are employed by a PCN company, but are under the ongoing direction and control of an entity which is proving the regulated service and has a CQC registration (as is usually the case in the classic usage (1) detailed above), the PCN company doesn’t need its own CQC registration in respect of those employees. This is because, for the purposes of the regulations, such staff will be operating under the clinical supervision of the CQC-registered entity.

This principle may not be as novel to GPs as it might initially sound. Locums and locum agencies, just like PCN companies, provide sub-contracted clinical services to GP practices. The reason that locums and agencies don’t have their own CQC registrations is because the services they provide are always under the ongoing direction and control of a CQC-registered GP practice. The same principle applies when the services are being supplied to practices by a PCN company.

Application to contract-holding PCN companies

When it comes to the more recent usage of PCN companies for neighbourhood and other contracts (usage (2) detailed above), the same principle applies. Although the PCN company might hold the relevant single-neighbourhood contract, so long as the PCN company isn’t itself taking clinical responsibility for supplying the relevant service but is instead sub-contracting delivery of the regulated services to one or more of the member practices, then any staff delivering the clinical service will be under the ongoing direction and control of a CQC-registered entity, namely the responsible GP practice.

It’s important to understand that the principles detailed above aren’t an exhaustive exposition of all the rules and scenarios involved, though they are enough to demonstrate the principles of why PCN companies don’t generally need their own CQC registration. Beyond those principles, the fact of the CQC-registered entity having ongoing direction and control needs to be properly documented, in a way that doesn’t result in the CQC-registered entity taking on employment responsibility for the staff. There are also requirements for the CQC-registered entity to ensure that the staff whose services are supplied to it by the PCN company are suitably qualified and trained, with it being prudent to have documentation in place evidencing that this requirement has been met.

There are also practical issues with how to ensure that the clinical service is under the ongoing direction and control of a CQC-registered entity in practice. It’s easy enough to achieve where the clinical service is being delivered at a GP practice’s premises solely to the patients of that practice, but becomes more complex when patients from multiple practices are seen in the location of a single practice. It becomes even more difficult to achieve when patients from multiple practices are seen in a separate hub location which is not the premises of any of the practices.

It is also important to understand that this problem is not one which applies just to incorporated PCNs. An unincorporated PCN which operates in a way that patients from multiple practices are seen in a single location, whether it be a practice’s location or a remote hub, still needs to be able to demonstrate to the CQC who has ongoing direction and control of clinical staff at all times. “We’re all CQC-registered, so between us we’ve got it covered” is not sufficient, either in an incorporated PCN or an unincorporated one. While incorporation of a PCN often forces the practices to focus on clarifying who should have direction and control at all times, it doesn’t of itself create the requirement, which exists but is often overlooked in unincorporated PCNs too. With that in mind, the CQC requirements don’t create obligations or burdens in respect of PCN incorporations so much as force PCNs to address CQC compliance issues which they often overlooked.

How DR Solicitors can help

Clearly, PCNs (and now neighbourhoods) have made CQC compliance more complicated, but it is wrong to conclude that just because you have a PCN company, it needs to CQC register. In reality, what you need to do is understand and document your PCN-wide processes for clinical governance and then draw the right conclusions from that. If you would like expert support or guidance with your CQC registration requirements, contact DR Solicitors.