Monitor publishes procurement guidance

Monitor has published its final guidance on the provisions of the NHS (Procurement, Patient Choice and Competition) (No.2) Regulations 2013 (the “s.75 Regulations”). The s75 Regulations apply to all CCGs along with NHS England.

The s.75 Regulations create a framework for decision making that requires the commissioner to honour patient choice and to secure high quality, efficient NHS health care services that meet patients’ needs.

What is the guidance?

The guidance is ‘principles based’ and provides examples of practical considerations that commissioners need to take into account. If commissioners can demonstrate that they have considered these and have applied the relevant elements of the guidance when making their decisions, this will be indicative of compliance with the s75 Regulations. It is recognised that each commissioning decision needs to be made on a ‘case by case’ basis to meet the needs of patients and local populations by providing safe, efficient, joined up and value for money health care.

There remains a debate surrounding the meaning within the guidance of – “single capable provider”. Commissioners are required to make a decision on a case by case basis as to whether they are required or if it is appropriate to put services out to tender.

The guidance steers commissioners through the principles of fair procurement, avoiding anti-competitive behaviour and the protection of patient choice. In addition, Monitor has also published revised enforcement guidance outlining its investigation and enforcement processes for alleged breaches of the s75 regulations.

Commissioners have to apply the s.75 Regulations to their own activities as they also have ultimate responsibility for ensuring that any third parties (e.g. local authorities/commissioning support units) engaged by them, to provide support or advice, also adhere to the principles of the s.75 Regulations. Commissioners may also consider whether it is appropriate to incorporate s.75 Regulations principles into any agreement for the provision of commissioning support services.

It is clear that where appropriate, Monitor intends for commissioners to comply with the s.75 Regulations without incurring additional costs or management time. For example, where the commissioner has prepared joint strategic needs assessments and joint health and wellbeing strategies, these can be used to show that it has considered the current and future needs of the population and to demonstrate compliance with Regulation 2 – the procurement objective.

Ten questions to ask yourself before starting the procurement journey

The guidance addresses commissioners’ objectives and each regulation in detail. The guidance reiterates that it is advisable for commissioners to maintain a robust paper trail to evidence how each element of each commissioning decision is arrived at. Monitor suggests that when making commissioning decisions, commissioners ask themselves the following questions (which are designed to ensure that such decisions are fair, transparent and in patients’ best interests).

1. What are the needs of the health care service users?

2. How good are current services? How can the services be improved?

3. How can the commissioner ensure that the services are provided in a more joined-up way?

4. Could services be improved by giving patients a choice of provider to and/or by enabling providers to compete?

5. How can the commissioner identify the most capable provider or providers of the services?

6. Are the commissioner’s actions transparent? Do people know what decisions the commissioner is taking and the reasons why they are being taken?

7. How can the commissioner make sure that providers have a fair opportunity to express their interest in providing services?

8. Are there any conflicts between the interests of those commissioning the services and of those (potentially) providing them?

9. Are the commissioner’s actions proportionate? Do they reflect the value, complexity and clinical risk associated with the services in question and are they consistent with commissioning priorities?

10. Is the commissioner doing anything that removes or materially reduces the incentives on providers to provide high quality services or improvements to those services? Are such actions necessary and required in order to achieve benefits to patients?

11. Does the decision endanger patient choice under the NHS constitution?

Outcomes

Monitor may only exercise its investigative powers in relation to complaints received from third parties although it may commence investigations independently in relation to suspected anti-competitive behaviour.

When investigating either third party complaints or alleged anti-competitive behaviour, Monitor may take formal or informal action. Formal actions include powers to request information, declare an arrangement invalid, direct commissioners to put in place certain measures to prevent breaches and accept undertakings from a commissioner. Monitor has stated that it will take action where doing so is proportionate both in terms of the severity of the breach and the impact on patient interests or restrictions on those interests.

It is clear from the guidance that in enforcing the s.75 Regulations, Monitor will assess each matter on a case by case basis. Commissioners are therefore advised to take into account the considerations prescribed in the guidance but also to take a holistic approach.

We have worked closely with Monitor since its inception and regularly advise commissioners and providers on the application of s.75 Regulations and other procurement matters. Please contact us for advice or more information.

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