Monitor’s Enforcement Powers over providers of NHS services – its Enforcement Guidance is issued for consultation

Topics covered: Ridouts professional advice

As readers will know from our previous news articles, the foundation trust regulator known as Monitor is to assume the role of economic regulator for providers of NHS services.  In applying this new statutory regime, Monitor will issue licences to providers of NHS services and enforce the license conditions in the event of breach.  While all NHS foundation trusts will be covered by this new framework, it is yet to be decided which independent sector operators providing NHS services will be caught by the licensing regime.

On 18 December 2012, Monitor published its draft Enforcement Guidance for consultation.  There is a significant amount of detail in the 39 page consultation document (short by Monitor’s standards) which providers would be advised to acquaint themselves with in determining whether to respond to the consultation which runs until 11 February 2013.

In summary, what Monitor can do is investigate breaches and decide whether to impose requirements (known as “discretionary requirements”) on the NHS service provider concerned, or accept undertakings (called “enforcement undertakings”) instead. There is also a power to revoke a license although in practice this is unlikely to be a feasible option given that the consequence would be to render any carrying on of the particular NHS service unlawful.

Discretionary requirements

These comprise three types:

  • Compliance requirements “which require a provider to take such steps as we may specify to ensure that the breach in question does not continue or recur”;
  • Restoration requirements “which require a provider to take such actions as we may specify to restore the situation to what it would have been, were the breach not occurring or had not occurred”; and
  • Variable monetary penalties “which require a provider to pay a penalty.” This must not exceed 10% of the provider’s turnover in England.

These can be imposed where Monitor finds that a provider is breaching, or has breached, one or more of its licence conditions, or has not met a requirement to hold a licence, or has failed to provide Monitor with information.

The statutory procedure for imposing a discretionary requirement is for Monitor to issue a “Notice of Intent” setting out the grounds and reasons.  The provider then has 28 days to respond in writing with representations (although this can be shortened to 5 days if Monitor considers that a shorter notice period is necessary to prevent or minimise further breaches).  There is also an additional right to make oral representations to the decision-makers in Monitor. Having considered the representations, Monitor must then decide whether to impose the discretionary requirement, with or without modification,  or impose any other discretionary requirement.  This will be set out in a Final Notice of Decision.

The provider may appeal a decision to impose a discretionary requirement to a specialist Tribunal, the First-tier Tribunal, in which case the requirement will not take effect until the appeal has been concluded.

Enforcement undertakings

These are “actions that providers commit themselves to taking and which Monitor may decide to accept, usually as an alternative to investigating further with the possibility of imposing discretionary requirements.”

Monitor can accept enforcement undertakings where it has “reasonable grounds” to suspect a provider is breaching, or has breached, one or more of its licence conditions, or has not met a requirement to hold a licence, or has failed to provide Monitor with information.

Where Monitor is satisfied a provider has complied with an enforcement undertaking, it must issue a compliance certificate. A provider can apply for a compliance certificate which if refused can be appealed to the Tribunal.

Imposing additional licence conditions on NHS foundation trusts

Monitor can impose additional licence conditions in relation to governance where it is satisfied that the foundation trust’s directors and/or governors are failing to (a) secure compliance with conditions in the foundation trust’s licence, or (b) take steps to reduce the risk of a breach of a condition in the foundation trust’s licence.

If Monitor is then satisfied that the foundation trust has breached or is breaching the additional licence conditions it can require the foundation trust to remove, suspend or disqualify one or more of the foundation trust’s directors and/or governors or, if the foundation trust does not do so, Monitor may make such changes.

There are no appeal rights in relation to these powers which apply for a transitional period only (until at least April 2016 for NHS foundation trusts.)

Competition powers

The Guidance covers Monitor’s concurrent powers with the Office of fair Trading to apply competition law in the healthcare sector in England.  Any enforcement decisions may be appealed to the Competition Appeal Tribunal.

Types of decision that might lead to Monitor to use its enforcement powers

While most of the consultation document is couched in general terms, there are some helpful illustrations in the foreward of circumstances that might lead Monitor to taking enforcement action. These are:

  • a complaint from a commissioner that a provider has acted unreasonably in refusing to supply a service as a Commissioner Requested Service in breach of its licence;
  • a complaint that a provider has acted anti-competitively in breach of its licence and/or competition law;
  • an investigation into whether an NHS foundation trust may be in breach of its licence conditions about governance; and
  • a failure by those obliged to do so, to provide information to Monitor.

Concluding comments

The tone of the consultation document indicates that Monitor is inclined towards exercising its enforcement powers in a judicious and cautious manner, using them only where there is a real benefit to the main duty imposed on Monitor:

“to protect and promote the interests of people who use health care services by promoting the provision of services which is economic, efficient and effective, and maintains or improves the quality of the services”. 

What is particularly encouraging is the apparent commitment to want to work with providers in resolving issues without recourse to enforcement action unless really necessary.

If Monitor chooses the route of informal action, it may deploy one or more of the following:

  • providing guidance, or working with providers to support them in maintaining or restoring compliance;
  • issuing an advisory letter to explain a provider’s obligations and what action may be advisable to maintain compliance; and
  • issuing a warning letter which sets out Monitor’s concerns, and notifying the provider that if it does take action Monitor may commence a formal investigation.

This is an approach to regulation based on dialogue with providers and providing support and guidance to the sector rather than the “command and control” form of regulation that until now has typified regulation of the health and social care sector  by the Care Quality Commission.

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