Explained: the Provider Selection Regime for primary care services

The Provider Selection Regime (PSR) replaces the Public Procurement Regulations for the award of health care services contracts in England by commissioners. Justin Cumberlege explores the detail.

Behind the PSR is this concept: freed from European Union restraints, English commissioners of health services can award contracts without having to go through the lengthy and resource intensive competitive tenders every time.

It came into force on 1 January 2024 and is set out in the Health Care Services (Provider Selection Regime) Regulations 2023.

At one extreme, the PSR permits a contract to be awarded to an organisation:

● without any tender process, and
● where the commissioner considers only that organisation is able to deliver the contract, only a notice being published that the contract has been awarded.

At the other extreme, a competitive tender process is followed, as previously. Commissioners are referred to as the ‘relevant authorities’ which include a number of public bodies who commission health services. For primary care it is most commonly going to be the Integrated Care Board (ICB) for the relevant area.

The selection process will partly depend on whether it is an existing contract which is to be renewed, or a new contract, whether there is one or multiple potential providers, their past performance and their ability to deliver the contract. In each case it will be the particular commissioner which decides the suitable process to follow depending on the service and the contractual requirements.


There are three possible provider selection processes:

  1. Direct award processes of which there are three: A, B and C
  2. Most suitable provider process
  3. Competitive process

It is possible that the commissioner’s decision about which process will be followed could be challenged. To assist both the commissioners and potential providers statutory guidance has also been issued (The Provider Selection Regime (PSR)
statutory guidance). Annex C of this guidance is devoted to primary care services.

The NHS has also produced a toolkit*.

Regulation 6 sets out which process is to be followed in the given circumstances and slide 12 of NHS England’s Policy slide deck on the toolkit page summarises it.

Our understanding is Direct Award Process A will not be appropriate for primary care contracts. It is intended for services which can only be provided by the existing provider due to the nature of the service, for example accident and emergency departments within the local hospital and the ambulance services.

Direct Award Process B equates to the ‘any willing provider’ award, meaning any provider who has shown that they meet the required criteria for a service in which there is patient choice as to who they can use, may be awarded the contract.

This means there may be any number of providers in the area who can provide the services,
and patients may choose which one they go to.

Direct Award Process C will be used where the contract is being renewed. So, if a provider has an APMS contract to provide essential services from a surgery, and that contract term has to come to an end, the commissioner may decide to award a new contract on the same terms to the same provider, without inviting others to bid for it. A ‘considerable modification’ to a contract is not allowed although there are some exceptions which are deemed ‘permitted modifications’:

  • the contractor is the same entity but for a corporate change due to takeover, merger acquisition
  • it does not materially alter the character of the contract
  • the lifetime value of the renewed contract is worth no more than £500,000 more than the lifetime value of the existing contract; and
  • the lifetime value is worth no more than 25% of the total of the existing contract.

If the modification is greater than this, then one of the other two processes must be followed.

The most suitable provider process allows the contract to be awarded without running a competitive process because the commissioner has identified the most suitable provider.

For any contract there will be specified ‘basic selection criteria’ to be met and each provider will be considered against ‘key criteria’.

Upon considering this information the commissioner may decide which of the providers meets these criteria and therefore may award the contract to them. This could be open to challenge by others who consider that they meet the criteria and should have been given the opportunity to bid.

The ‘basic selection criteria’ are set out in the regulations and the commissioner will need to be persuaded of the provider’s suitability to pursue a particular activity, economic and financial standing, and technical and professional ability.

These should be objective.

In addition, there are the ‘key criteria’ which will be stated by the commissioner for the contract. These may be weighted for the contract.

Again, they are set out in the regulations, but they are much less determinable, and may vary considerably between contracts, and commissioners. The key criteria are to assess in respect of the provider’s offering for:

  • quality and innovation
  • value
  • integration, collaboration and service sustainability
  • improving access, reducing health inequalities and facilitating choice, and
  • social value.

The competitive process is the equivalent of the public procurement procedure we have had for a considerable time, with the commissioner providing details of the contract that parties are then invited to bid for and one provider being successful and being awarded the contract.

Having won the contract the provider will then hope that, at the end of the contract term, it will be awarded the contract under a direct award process C. Therefore, once a provider has a contract they need to position themselves to ensure they are able to retain it.

Decision making

Regardless of which process is selected the commissioner must ensure decision making is fair and transparent. The regulations set out the procedure (see regulation 6) and notices which must be published which are set out in the schedules.

Records must be kept of the decision, and the intentions of the commissioner made clear. Providers must know what the key criteria are, how the assessment will be made, and the importance of each criteria (its weighting).

The chart on slide 13 of NHS England’s Policy slide deck** on the toolkit page sets out the decision tree for the commissioner to follow.

There will also be the standstill period for direct award process C, for the most suitable provider process, and the competitive process, during which the provider selection decisions may be reviewed.

This could be by a panel to be set up to oversee PSR to be called the Independent Patient Choice and Procurement Panel.

Primary care

Annex C of the Statutory Guidance is dedicated to primary care contracts, being for services which are primary medical care, community pharmacy, primary dental care, and primary eye care services.

While many contracts are in perpetuity, there are times when new contracts have to be awarded, in particular if they are APMS or Personal Dental Services contracts which have a defined term.

As stated above, if a number of providers are able to provide the service (for example dermatology services) then selection process B may be appropriate, where any GP practice, or PCN (subject to it having an appropriate legal entity to hold the contract), or GP federation or NHS Trust with the required expertise and resources could be awarded the contract, and then patients will be able to decide which provider to receive the service from.

If it is a renewal of an APMS contract providing essential services, then it may be appropriate for a direct award under process C.

Providers will need to be wary of additional services being added onto the contract, as this may amount to a material modification (see above) resulting in the contract being a new contract, and therefore not qualifying for a direct award.

In such circumstances it would be advisable for the provider to request these additional services are in a separate contract, to secure the existing one.

Note that the guidance states that where there is a merger of practices, the merging of the contracts is a permitted modification, and so would continue with the new merged entity.

If the partnership running the practice has dissolved, then the commissioner will have to decide what the most appropriate selection regime is, which may be dependent on the attitude of the previous partners.

For example, if a partnership at will was dissolved due to a dispute with one partner, and the other partners wish to continue, the commissioner may choose to award the other partners a new contract as the most suitable provider.

The previous ability for the commissioner to award contracts in an emergency, remains. So, if a sole practitioner were to die, and it was not considered in the best interests of patients to disperse the list, a caretaker contract may be awarded for up to a year while it is decided whether to select the new provider by using the most suitable provider process or the competitive process for a new permanent contract.

Reference is made to the guidance in the Primary Medical Care Policy and Guidance Manual (PGM), but this is yet to be updated at the time of writing to include the PSR.


Those wanting to bid for contracts which are anticipated, either as new contracts, or as contract renewals, should ensure the commissioner is aware of their ability to perform the contracts and their interest.

Either this is to ensure the existing contract is awarded to them again, or to ensure there is not a
direct award to the existing provider without proper consideration being given to them.

The risk of contract awards being biased is foreseen, and hence the emphasis on fairness and transparency.

For a provider it is much better to be close to the ICB and knowing the intentions of the ICB, so as to pre-empt an undesired process being followed, than having to challenge it once the contract is awarded.

Justin Cumberlege (J.Cumberlege@hempsons.co.uk) is a partner in the corporate primary healthcare team at the law firm Hempsons.

Reference material:
*NHS England’s Provider Selection Regime toolkit page: NHS England » Provider Selection Regime toolkit products

**NHS England’s Policy slide deck: PRN00853-Provider-Selection-Regime-policy-slides-4-January-2024.pptx (live.com)

First published in the Spring edition of AISMA.