Monitor consults on the new NHS provider licence – you have until 23 October 2012 to respond

Topics covered: Ridouts professional advice

Monitor has recently published its consultation document on the provider licence which David Bennett, its Chief Executive, describes as “our new, key tool with which we will regulate providers of NHS services”.  A mere 130 pages long, it sets out Monitor’s formal proposals regarding the content and operation of the provider licence.  It is proposed that the licence will be issued automatically to all NHS foundation trusts in April 2013, with other providers of NHS services coming on board after April 2014 unless exempt under regulations made by the Department of Health.  However, Monitor says that those dates may change depending on the response to the consultation. You get the sense that the enormity of the task is starting to weigh heavily on the shoulders of the Monitor hierarchy.

As far as independent sector providers who deliver NHS funded services are concerned, we will have to wait to see who will be captured by the new regulatory framework. The Department’s consultation on the exemption regulations is expected to be published during August.

Monitor makes the standard comments about wanting to ensure their framework is proportionate, evidence-based and not a burden on providers and you sense they mean it.  They have listened to the sector and decided against applying strict conditions on all health service providers in terms of such matters as indebtedness, cash lock up and restrictions on lending and investment.  Monitor is also looking to apply a “fit and proper person test” in a measured and sensible fashion, subject to the constraints of the Health and Social Care Act 2012.  However, there is no getting away from the fact that this is going to be a sophisticated risk based system that will extend to regular financial checks for those providers delivering essential NHS services (in the jargon of the new legislation called Commissioner Requested Services), as well as to checks on overall governance and quality indicators.  Monitor’s proposed Risk Assessment Framework will link up with CQC’s inspection findings and in due course both organisations will operate a joint licensing and registration system.

There is a central preoccupation in the consultation with continuity of service provision which is indicative of the new sense of realism that some NHS services will fail financially.  The failure of Southern Cross is a salutary reminder that the risks apply to the private sector as well.  What we can expect is far greater scrutiny of the financial strength of providers of NHS services that fall within the new system and that in many instances the financial reporting will not make for pretty reading.  One senses that the classic fudges and bail outs of old will be difficult to apply when this new independent market regulator is in charge.

Evidently, Monitor is a strategic operator and one that is prepared to listen to the sector.  There is a great deal of detail in the consultation document covering all seven sections of the provider licence which is beyond the scope of this short article. A range of options are put forward in relation to such important matters as choice and competition and the provision of integrated care. It is also significant in what it does not cover, making repeated references to guidance which Monitor will issue in due course (following further rounds of consultation).  Implementation of this framework is going to be a time consuming and protracted process for Monitor and the providers caught by it.

A great deal is potentially at stake and this consultation document deserves careful scrutiny by all providers of NHS services. We would be delighted to talk through the proposed changes with you. We’re here to help.

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