CQC Enforcement Action is on the Rise: Are You Prepared?

With CQC enforcement on the rise it is more important than ever for Providers to understand exactly what powers the CQC has, the impact this can have on their services and how they can challenge the CQC if they find themselves the subject of enforcement action.

The CQC has a wide range of enforcement powers available to it under the Health and Social Care Act 2008 (“HSCA 2008”) and other related legislation, many of which have the potential to significantly impact a provider’s business. Key powers include the ability to change a Provider’s registration, issue fines and prosecute a Provider or individuals within the provider company.

Changes to Provider Registration

The CQC has the power to make changes to a registered Provider’s registration including the imposition, variation and amendment of conditions of registration, the suspension of registration and the cancellation of registration. There needs to be a valid reason for such changes and Providers have the right to challenge and appeal any such action. The changes are communicated through the issuance of Notices of Proposal and Notices of Decision, and sometimes through a Magistrates’ Court.

The CQC has two routes it can follow when considering taking such action. It can take action via the urgent route or the non-urgent/’normal’ route.

Urgent procedures

If pursuing the urgent route an Urgent Notice of Decision (“UNOD”) will be served on a Provider. The stated changes to registration take effect immediately and, other than in relation to cancellation of a Provider’s registration (where the CQC has to apply to the court for authorisation of the action), the CQC’s decision is made unilaterally. Providers are then left having to consider spending time and money on challenging a decision that is likely having a negative financial impact on its profitability while also ensuring it is complying with whatever change has been made to its registration which can include the removal of a location from a provider’s registration. It is important to consider the merits of each individual cases and taking early legal advice can assist providers with whether and how to address the UNOD, and what approach to take.

At Ridouts we have seen an increase in the issuance of so called ‘letters of intent’ by the CQC. These are not required by law but give Providers the valuable opportunity to fend off potential urgent action before receiving an official UNOD. Letters of intent usually allow very short timeframes to respond (24-48 hours is the norm). They should be taken extremely seriously and Providers should respond to them within the timeframe provided in an attempt to avoid impending enforcement action. The most persuasive responses will include action plans to address the concerns raised by the CQC with short but realistic timeframes for completion alongside a demonstration that the Provider is taking the concerns seriously. It is advised that Providers seek prompt legal advice at this stage as a legal challenge to the proposed action, alongside the action plan can provide food for thought to the CQC and slow down any enforcement action.

Normal Procedure

Through the normal route the CQC has to first issue a Notice of Proposal (“NOP”) which the Provider has 28 days to respond to before the CQC decides whether to continue with the proposed action. It will then issue a notice of decision (“NOD”) confirming whether it intends to adopt or withdraw the proposal. Under this route the proposed action will not take effect until either the Provider decides not to make representations to the NOP, fails to appeal a NOD or the Tribunal decides in the CQC’s favour upon appeal.

More recently, Ridouts has seen an increase in the imposition of positive conditions of registration through the use of CQC’s non-urgent powers. Usually this is either a restriction on admissions or a requirement to provide action plans or other data about a service (such as staffing levels) to the CQC on a regular basis. As the conditions are not being imposed under the urgent procedures, it is usually a significant period of time until the conditions would ever be officially applied to the Providers registration. Therefore, one argument that can be put forward is that the CQC has other, more proportionate powers it could adopt in the circumstances such as its section 65 power under the HSCA 2008 to require registered persons to provide information to the CQC.  This is because failure to comply with conditions of registration is a criminal offence so it is important that Provider’s consider what the conditions are and the implication of them being imposed in deciding whether such a NOP should be challenged.

Regularly we see Providers responding to NOPs or NODs with a focus on the factual accuracy of the CQC’s reasons for the action. While the factual accuracy is be important, an important and persuasive point to raise in light of such notices is the current position at a service. This is what the CQC and the Tribunal (if it ever gets that far) will have to look at when deciding whether to affirm the enforcement action. Therefore, all improvements made up to the date a decision is made must be taken into account in the decision making process.

A strategic review of the position of the service is required alongside a consideration of the applicable law to put together a robust and detailed response. As recommended by the CQC through such communications, Providers should take legal advice at the earliest opportunity when considering responding to NOPs and NODs. It is a legal process and the CQC will have their legal department working on the matter behind the scenes.

Fixed Penalty Notices (FPN)

FPNs can be served on Providers in relation to various breaches such as a failure to comply with conditions of registration (most notably the failure to have a registered manager), failing to make required notifications, obstructing entry and inspection and failing to provide documents or explanations on request.

In considering whether to issue a FPN rather than prosecution the CQC will consider whether the evidence held is sufficient to bring a criminal prosecution, whether achieving improvement is a realistic alternative and more proportionate to prosecution and the impact of the offence on people using the service. Failure to pay an FPN will normally lead to a prosecution.

One point many Providers fail to appreciate when in receipt of a FPN is that penalty notices should only be issued where the CQC would have been entitled to prosecute. It is therefore a way of allowing a Provider to avoid a prosecution through payment of a relatively small fine. There are nuanced legal matters to be considered when deciding how to respond to an FPN and Providers are strongly urged to take legal advice.

Another potential pitfall for Providers is forgetting about the ‘without reasonable excuse’ exception for compliance with conditions of registration. This is particularly pertinent in relation to registered manager conditions. Some Providers are quick to pay FPN’s out of fear of prosecution without properly assessing the actual position at a service. FPNs are criminal sanctions, payment of fines indicates acceptance of the criticisms contained with the notice and can be relied upon by the CQC in consideration of any future enforcement action.

Prosecution

Usually the CQC also has the option to prosecute a Provider if it is considered in the public interest to do so. It is relatively rare for the CQC to prosecute a Provider but it is certainly not unheard of. Indeed, the CQC is eager to publish details of its successful prosecutions in the press releases section of its website. There are a number of different reasons the CQC can pursue a prosecution such as (but not limited to):

  • Failure to comply with prosecutable fundamental standards;
  • Failing to comply with conditions of registration; and
  • Making false or misleading statements on registration applications

Each of the offences listed above attract unlimited fines through the courts which means the level of fine is at the courts discretion. We have seen significant fines imposed recently, most notably a Provider was fined £460,000 plus costs for breaches of Regulation 12 of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 related to the physical assault of a service user by another service user.

It is recommended that Providers take legal advice at an early stage when facing potential CQC prosecution proceedings. While responding without having sought advice may be seen to save money on legal fees in the short term, setting the groundwork at an early stage can help support a Provider in the long-run. Plea considerations are not straightforward and, if found guilty, the courts consider matters of conduct throughout the course of investigations when deciding on the level of fines and important points for mitigation (which can lead to reductions in fines) could be missed if legal advice is not sought.

Conclusion

It is usually the case that CQC enforcement action follows a negative inspection visit and with the CQC’s move to a more risk based inspection model, it is not surprising that we are seeing an increase in action taken. Providers need to ensure they are aware of what is going on in their services and address potential concerns at an early stage to help avoid the more severe end of the CQC’s enforcement capabilities. Seeking sound legal advice at an early stage can help avoid enforcement action altogether or reduce the impact on a Provider’s company.

If you require any advice or assistance on such matters, please contact the Ridouts team on 0207 317 0340.

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