On 16 July 2012, the Department of Health published its plans for consultation and implementation of sector regulation in relation to NHS funded services to be exercised by Monitor.
The paper, “Sector regulation: update on plans for consultation and implementation” provides a useful summary of what the health and care system will look like from April 2013.
The guidance states that Monitor will exercise its duties through three key functions:
- Working with the NHS Commissioning Board to provide independent pricing regulation for NHS services;
- Protecting patient choice and using specialist knowledge and expertise to address anti-competitive behaviour which acts against patients’ interests; and
- Working with commissioners to secure continuity of services, where necessary.
All of this will be underpinned by its licensing regime which will allow Monitor to set and enforce licence conditions to protect and promote patients’ interests, irrespective of who provides their NHS services. Therefore, private and voluntary sector providers of NHS services need to take careful note of the statutory changes as they may require a Monitor licence to provide such services lawfully.
The latest paper states that, “All providers of NHS services will require a licence from Monitor, unless they are granted an exemption under regulations”.
In August 2012, the nation will be distracted not only by the Olympics and Paralympics but by the Department’s consultation on who needs to hold a Monitor license i.e. who is defined as a provider for the purposes of licensing, and which providers will be exempt from holding a licence and why. The Department states that it wishes to avoid imposing an unnecessary and disproportionate regulatory burden on providers, particularly small and medium-sized enterprises and providers that may be subject to other forms of regulation. The expectation therefore is that it will apply to large private sector providers undertaking a significant amount of NHS funded work.
There is good reason to want to avoid another regulatory regime in what is already a highly regulated arena. It is also likely to be plagued with uncertainty in its early years, requiring licensed providers to act as the guinea pigs while it all settles down. It also comes with potentially sharp teeth. Notably, Monitor will be able to fine a provider who is in breach of a licence condition up to 10% of turnover in England. It is difficult to see how a large fine will be in the public interest when levied against cash strapped NHS foundation trusts but the mindset might be different with independent sector providers. One would hope that “turnover” in relation to an independent sector provider will be limited to its NHS funded services and not all of its services. The Department is planning to consult in August on this aspect of Monitor’s enforcement jurisdiction. In addition, Monitor itself will be consulting on its proposed license conditions in August.
And that is just the start of it. Other planned consultations include:
- Procurement, choice and competition (August 2012)
- Health special administration regime for corporate and third sector providers of NHS services (August 2012)
- Pricing (October 2012)
- Risk pool (October 2012)
The Department states that subject to the outcome of the consultation, it is proposed that the licensing regime for foundation trusts will come into effect from April 2013 and for other providers from April 2014 (at which point a joint licensing regime will be operated by Monitor and CQC).
One gets a sense that quite a number of civil servants and Monitor employees will be missing out on their 8 hours kip over the coming months. For the sector as well it will be a consultation phase like no other. To ease your burden during the Indian summer that we are all hoping for, we will be monitoring the consultation papers carefully and providing regular up-dates for the sector.