Act now to deal with disputes between practices in your PCN
Damaging network disagreements are increasing – Robert McCartney shows how to navigate them and outlines your options for reaching resolutions.
The introduction to the Mandatory Network Agreement for Primary Care Networks (PCNs) states that they ‘will require strong relationships and the creation of an environment of trust, collaboration and innovation.’
But unfortunately, this is not always possible and the number of disputes have been rising. PCN finance and decision-making issues are often the cause.
PCNs are not a legal entity. They may have incorporated a provider vehicle for their use and have a dedicated management team, but fundamentally they are collaborative groupings of practices which themselves are a group of partners.
Disputes are consequently either arguments between neighbouring practices or they are between the practices and the PCN management workforce – including the clinical director – and may be driven by one or two partners.
Here I will focus on disputes between the practices. Workforce related matters should be considered according to Schedule 5 of the network agreement and the individual employment contracts.
Managing disputes
It is important to identify the key individuals and understand the legal and personal relationships between them.
Resolution is normally found in utilising one or both of these factors; for example re-enforcing a legal term that underpins their relationship or seeking to repair the personal relationship between them.
A PCN’s legal relationship is governed by the network agreement and disputes should be resolved in accordance with clauses 92 and 93 of the mandatory terms. They describe two stages:
Stage One:
Holding a meeting ‘in accordance with Schedule 1’ with the ‘aim to discuss the dispute with a view to finding a resolution.’
Stage Two:
A member practice may ‘refer the dispute to our Local Medical Committee (LMC). If the LMC agrees to hear our dispute, we will work with the LMC to agree a process for hearing a dispute.’
These two stages are limited in detail as many Schedule 1s failed to provide any structure to the meetings and the second stage is fully dependant on whether the LMC can assist.
Clause 94 states that alternative dispute resolution procedures can be included in Schedule 2. Many early examples of network agreement schedules did not include suitable procedures and consequently it is necessary to agree and then implement a suitable process.
This will ensure that it is managed in an agreed way and will often take some of the tension out of the situation.
Schedule 2 should subsequently be updated to provide clarity as to how future issues should be resolved.
Concerns about funding
Understanding the problem
Issues have arisen due to the financial pressure facing many practices. Concerns about cash being ‘locked up’ in PCNs and questions about how the funds can be accessed are a recurring theme of disputes, especially if partners have to pay tax on money they never got.
Partnership changes, especially retirements, spark questions about whether partners are entitled to money in a PCN account and how this should be accounted for. Are these funds invested for future PCN use, or will they eventually be released to the practices? Did tax returns appropriately reflect this position and have they been accounted for?
Finding solutions
The best cure is prevention. Schedule 4 of the PCN’s network agreement should cover financial arrangements. In 2019 these were relatively simple models and did not recognise the complexities of the subsequent financial structures.
Schedule 4 should be updated to provide detailed information about how the PCN’s finances will be managed and most importantly should include good financial governance – the obligation for an agreed form of record keeping, preparation of management accounts, transparency to the member practices and how to manage fund allocation disagreements.
If there is already a dispute then resolution will require the practices and the PCN’s management team to engage in a reconciliation process of the accounts.
Accountants should be instructed to produce an analysis of the current financial position, and a review made of the decision-making processes to determine how the current position materialised without full agreement.
Only by addressing these concerns openly with appropriate professional advice will this type of dispute be resolved.
Financial disputes are often the most emotional within a business, but it is rare for there to be any genuine underhanded or inappropriate actions. Most matters are resolved by improving the understanding of the current position.
Some unfortunate serious financial mismanagement cases may require action against those responsible. This could include legal action and even involving the NHS Counter Fraud Authority. While litigation should be avoided by agreeing suitable settlement terms, sometimes this is not an option, or agreement is not found.
It is advisable to review Schedule 4 to ensure it reflects the current arrangements, or puts in place suitable ones, to avoid future problems.
The best time to agree your financial governance is while everyone is working well together but unfortunately then is when people think it is least necessary.
Decision making disputes
Understanding the problem
PCNs are complex arrangements. They are required to co-ordinate the delivery of services, the management of workforces ranging from 30 to over 100 people, and they are expected to lead on developing the local area’s integrated care.
Management resources have risen over the years and the current PCN Designated Enhanced Service Specifications have given PCNs the ability to appoint a management team of their own design.
Practice representatives in some PCNs historically formed highly functioning management boards. In others the PCN struggled to secure consistent engagement with practices who were content to leave the decisions to the clinical director and network administrator.
This has resulted in many PCNs being unable to demonstrate how and when key decisions were made and the evidence is missing when they subsequently seek clarity.
Practices may then think they were excluded from decisions and question if there has been a fair and equitable allocation of PCN resources:
- Have the practices shared responsibility when problems arose?
- Was there full engagement even when some practices were not involved with the matter under discussion?
- Did the clinical director make all the decisions, without consultation, possibly because no one else showed any interest?
A bad case of communication
Communication is one of the most important elements to resolve disputes. In one recent case a practice of 10 partners insisted it was excluded from decisions about how and where enhanced access clinics would be based and accessed.
One partner was a PCN representative who went to the planning meetings and was on the panel making the final decision. Unbeknown to the PCN team, these partners had a strained relationship, and the GP failed to inform his partners.
The PCN could not show a fully documented decision-making process as it had relied on the representatives to feedback and to act on behalf of their practices, as stated in Schedule 1 of their network agreement.
But it was reasonable to show to the practice that, as their representative had been in attendance and approved the decision-making, things had been approved on their behalf.
The PCN team changed their communications and reporting processes. They ensured the partners in all the practices were aware of the powers they were delegating to their representatives, created minutes of all meetings, produced a record of decisions and increased the frequency of practice engagement events.
Their PCN must therefore ensure Schedules 1 and 2 are up to date, that they have agreed clear lines of communication, and everyone involved understands their roles and responsibility within the team.
Finding solutions
Schedule 1 of the network agreement should include details about the PCN’s management and decision-making procedures. The requirements have become more complex since 2019 but many PCNs have not updated this Schedule to reflect changes in how they operate.
To avoid disputes PCNs need to be able to evidence how, where, why and when decisions were made. This would include a clear understanding of :
- What powers are delegated to the clinical director and the management team?
- What are the limits on this delegation?
- Which matters require the input and decision of the practices, or an accountable board?
- Where are decisions made: are there frequent, fixed meetings as opposed to ad hoc arrangements?
- Are there standing instructions from the practices delegating powers to a board and defining the issues which must be decided by a wider membership of partners?
- How is this information documented and communicated between the practices? Is the detail encapsulated in the network agreement or does a corporate handbook set out the details?
Unable to resolve the dispute
In extreme circumstances of disputes between practices they may determine the relationship between members is irreparable and may elect to expel a member.
Section 4.9.7(ii) of the PCN DES Specification states that where ‘there has been an irreparable breakdown in the relationship or expulsion’ this may give grounds for a practice to leave a PCN.
Neither the specification nor the mandatory agreement is conclusive that a practice may be expelled without agreement of all parties and it is important that the Schedules are specific about circumstances where expulsions may be made.
Section 6.7 governs the removal of practices following an irreparable breakdown in relationships and includes a process of notification to the ICB who will ‘consider the matter, including holding discussions with all practices within the PCN.’
In effect this becomes the final stage of the dispute resolution procedure although it will focus on the impact on the practice’s patients if a PCN exit happens.
Under section 6.7.4 the ICB has the final determination about whether it consents to a PCN membership changes. So it therefore can prevent a practice from leaving.
When this happens, the practices are left with a difficult decision. They may review the relationship, re-engage with each other and seek to resolve the dispute knowing that they must work together, or they may opt out of the delivery of the PCN DES.
But this last option is rarely advisable given the financial impact and loss of control over key services.
If a PCN exit is approved then the practice will need to join another and engage with its systems and processes. It will need to adapt and learn to avoid future problems.
My advice is to always raise issues at the earliest opportunity and directly address them to reduce the risk of escalation.
Well drafted schedules to the network agreement are important to avoid and resolve disputes. It is essential for Schedule 2 to set out a clear procedure for managing under performance and other common dispute issues – and contain a fair and practical dispute resolution procedure.
Regular engagement between the practices, and good communications, will significantly reduce problems.
First published in AISMA’s Spring 2025 edition.
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Robert McCartney is a senior associate in our corporate commercial team. If you have any questions about any of the issues covered in this article, or need legal advice, please get in touch with the team today.