To all PMS practices

April 2010

Dear Colleague,

In response to an unprecedented number of requests for help from PMS practices who are under pressure from PCTs to accept unreasonable contract variations, The National Association of Primary Care (NAPC) is currently involved in a constructive dialogue with the Department of Health regarding this issue. However, we do not expect further departmental guidance in this electoral period.

In light of these concerns NAPC would like to invite PMS practices to join forces to provide collective support to combat inappropriate threats by PCTs to remove contracts under Schedule 5 Para 100 of the PMS regulations, with the possibility of mounting a legal challenge if necessary.

PMS contracts should have always stipulated a regular contract review and consensus for any contractual change. This is entirely appropriate. We would always encourage members to enter into constructive discussions. In some areas, PMS practices have reached acceptable agreements with their PCTs. However, many PCTs are using the process to cut costs and pressurise practices into accepting often grossly disadvantageous contract variations which may compromise the quality of service and patient care. This is totally unacceptable..

The following scenarios provide advice based on our received legal opinion. Throughout this process we would encourage you to seek support from your LMC and we would be happy to advise you of those LMCs who have already successfully supported their PMS practices through contract reviews.

Scenario 1:

Your PCT demands you accept a non-mandatory contract variation without agreement.

The PMS regulations are very clear that contract variations cannot be made unless agreed and signed by both parties to the contract. This does not apply to mandatory regulatory changes, which you are obliged to sign. If your PCT acts in this way, you should present your views, but if the pressure remains, you should write pointing out that Schedule 5, paragraph 98(1) of the PMS Regulations states:

"no amendment or variation shall have effect unless it is in writing and signed by or on behalf of the relevant body [the PCT] and the contractor [the practice]."

Should your PCT persist, please contact the NAPC and we will advise you on how to obtain a formal legal note addressed to your PCT reiterating this point.

Scenario 2:

Your PCT demands you accept an unacceptable contract variation with the threat of termination of your contract by notice under Para 100 of the PMS Regulations.

Although this is not as straightforward as Scenario 1, you should be aware that this has been attempted by a PCT and was successfully opposed by the group of practices threatened including an intervention by the SHA.

The response to the insistence on unilateral variation where you are not able to reach agreement after discussion with your PCT should be the same as in Scenario 1.

You should also point out to your PCT that the recent advice from Primary Care Contracting (18 March 2010) states:

"Our advice to PCTs is not to view this as a cost-cutting tool. It makes no sense to disinvest when the required shift from hospital care requires a stronger primary care sector...PCC has always advised PCTs not to exercise the right to unilaterally terminate PMS contracts but to opt instead for constructive dialogue with GPs".

We do not believe there is a unilateral right to terminate without good cause and should you be unable to reach agreement and your PCT serves you with a notice of termination (as has already happened elsewhere) you should write to the PCT invoking the dispute resolution process as described in Schedule 5 Para 95 of the regulations. You should also inform your SHA that you are disputing the termination notice. In some areas, LMCs have stepped in to assist, but in others they have inappropriately advised immediate capitulation. The legal advice we have received indicates that para 100 refers to the means by which termination may be effected, not the grounds. This is however an extremely complicated area of law and we will advise you on how to obtain formal legal advice before proceeding to the NHS Litigation Authority. An almost analogous case covering Personal Dental Services (PDS) the Appeal Court held that the PDS Regulations do not provide PCTs with a standalone right to terminate a PDS agreement. However, this case pre-dated the current form of Paragraph 100 of the Regulations.

The dispute process usually involves a further attempt at local resolution. However, the process will be organised and managed by the PCT so escalation is likely. At the end of the escalated process, if the dispute is not resolved in your favour, the legal opinion we have received is that an adverse determination of the Litigation Authority would be amenable to Judicial Review proceedings in the Administrative Court.

The NAPC is seeking to bring together sufficient PMS practices to contribute to a ‘legal support fund' to aid such a challenge. It is an expensive process but may well be affordable if enough PMS practices agree to pool some resources and there is a collective will.

Remember that you are not alone - 40% of practices are covered by PMS. PMS was created to foster innovation. Enlightened PCTs should see that it still has the local flexibility to continue to do so. Until then, we would encourage you to consider joining the NAPC's PMS Support Group if you have not already done so. A membership leaflet is attached. We will cover early legal costs through membership fees and provide our resources as a national forum to represent PMS views. The intention would be that, if a legal challenge proved necessary, we would ask PMS members to contribute at that point to a fighting fund. This affects your future if you are a PMS practice. We will have strength in numbers - please don't rely on others to contribute and work on your behalf.

If you would like to joint the group to help protect your future or to discuss this further ring the NAPC on 0207 636 7228 or email us : This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Dr Johnny Marshall, Chairman, NAPC

Mike Ramsden, CEO, NAPC