What next for primary care networks?

Kirsty Odell, senior solicitor in the corporate healthcare team of law form Hempsons considers whether a corporate structure would benefit primary care networks

Published in Practice Management 13 September 2019

The set-up and development of primary care networks (PCNs) under contractual agreements is a first step, but PCNs may need to consider a more robust structure to be ready for the next 13 direct enhanced services in April 2020. How can you develop your PCN to provide better governance and stability to meet that challenge and have a sustainable future?

Corporate structure

Have you considered a corporate structure, such as a limited company? One of the fundamental benefits of limited liability is it ringfences the risk in a separate legal entity so that the individual GP partners are not financially exposed personally. Depending on how the PCN is set up, where sub-contracts are not required, a corporate vehicle may also mitigate the risks in terms of access to the NHS pension scheme for employees and VAT concerns.

One of the key hurdles of this model is that, in order to receive the funding and give employees access to the NHS pension scheme, the corporate body has to hold a primary care contract, which is a reason for the GP Federations to be the vehicle to develop this model. However, if one of the practices in the PCN was to incorporate, the same advantage would be achieved. This means that one of the existing partnerships/single handers would run their practice through the company – and the same company could then be used for the PCN.

There are, in addition, a number of considerations. The practice concerned would need to have the support of the Commissioner that the General Medical Services (GMS) contract would be novated to the company, and that the property was transferred to or let to the company. It is important to take accountancy advice to understand the financial impact this would have and tax consequences, such as the partners losing their self-employed status and being employed by the company.

PCN agreements

Whatever structure the PCN takes, the agreement between the practices should be robust and practices should ensure that their PCN agreement includes the following:

  • Governance: clear structures for appointing decision makers and voting, including confiict of interest provisions

  • Joining and leaving the network; the notices, service handover, payments and time frames for practices joining and departing

  • Data sharing; robust data-sharing arrangements

  • Dispute resolution; an escalation process may be the best way to deal with disputes

  • Finance: proper control and oversight of the finances, and mechanisms to ensure practices make their financial contributions

  • Employment: recruitment and management of staff, dealing with claims or grievances and paying for redundancies, which is simplified if there is a company in place

  • Liability and indemnities; how is liability shared among the practices if there is no company to shield the partners? Has a contingency fund been considered?

Primary care networks will succeed if they plan and implement corporate, financial and clinical governance structures and contractual arrangements.

‘How is liability shared among the practices if there is no company to shield the partners? Has a contingency fund been considered?’