It’s time to network

23 November, 2018

Justin Cumberlege, a partner in the healthcare team of law firm Cripps LLP, explains that you need to get ready to become part of a network.

Unless your practice has 30,000+ patients, expect to be required to form a ‘network’ with three or four other practices, so that together your patient list reaches that size.

This is part of the NHS Executive’s drive to see primary care operating at scale, and the incentive is that payments, including QOF payments, will be made to the networks, depending on their performance.

If you have an incorporated company of which your network surgeries are the only members, then you are well prepared. If not, then you will need to decide which practice is going to be responsible for handling and distributing these payments. 

If it is your practice which is nominated, you can be pleased the other practices are so trusting of you. But if it is not your practice, and you are unwilling to trust the chosen practice, or fear that the money could be lost if something happened to that practice, then you should start thinking now how this is going to work for you. By getting ahead of the plan, you will have an advantage in being in greater control when the time comes.

Other than trust, one option is to form a contractual relationship between the network’s members.  A contract can be entered into which does not create a new partnership but does have the right of redress if a practice does not comply with its terms.

Agreeing the terms can take a little time, but it is worth thinking through how the arrangement is going to work, and who will take responsibility for what aspects. The contract document tends to be quite complex as it needs to cover off everything as there are no legal restraints, or powers imposed, unlike a company which is subject to the Companies Act. 

One practice is going to receive the money, so the power would be expected to be in its hands ultimately, as it will not pay out if there is any dispute. However, if the practice pays out money incorrectly, then the individual partners of that practice could be personally liable to compensate those who have lost out. Enforcement can be an issue, as ultimately your only recourse will be to go to Court, or (if you have agreed) Arbitration. Neither are cheap, and both are time-consuming and stressful.

Alternatively, You could form a company with the members of the network, and then the company will receive the money. It would be ringfenced, and paid out to the practices in line with agreed service level agreements. You would need to decide who the members and directors of the company are, and have an agreement between the shareholders as to how the company will operate and decisions be made. You would expect the company to be run on an equal basis, between the practices, unless you expressly agree otherwise.

Alternatively, could you merge? 

Whichever option you choose, now is the time to get prepared to ensure you are ready.