DR Solicitors Blog

Thinking of handing back your GMS/PMS contract?

[fa icon="calendar"] Oct 14, 2016 9:41:20 AM / by Daphne Robertson

Daphne Robertson

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Whether you’re in a GP partnership or a single hander running your own practice, there are likely to be times and situations that prompt you to re-evaluate your position. Maybe you find yourself facing challenging circumstances, such as a dispute, or financial pressures which are making the practice unprofitable. You may feel your individual risk is too great if you have an insufficient number of partners to share the burden, or you need to act now to avoid the ‘last man standing’ issue. It could also be that you’re planning to retire or simply just wish to make a change....

Whatever the catalyst may be, one option you might be considering is handing back your GMS or PMS contract. Traditionally, opting to go down this route was rare but it is now becoming far more common. However, it can have serious implications, so before making any decision it is important to understand what the consequences may be and also what the alternatives are.

 

What does it mean?

To hand back your GMS/PMS contract, you first need to give notice in writing to NHS England in accordance with the regulations. The GMS notice period is 6 months for a partnership and 3 months for a sole practitioner. The GMS contract will come to an end on the last day of the month in which the notice period expires. The required PMS notice period is a minimum of 6 months regardless of the type of contractor.

By terminating your primary care contract your patient list will return to NHS England and your obligations to provide patient care will cease. You haven’t, however, closed your business.  You have therefore stopped your income stream (including any rent reimbursement), but your expenses will continue to accrue until you finally close the business or find an alternative source of income.

The cost of closing a business can be significant and includes things like staff redundancies and meeting any lease or mortgage obligations. Most leases won’t allow you to break a contract early, even if your circumstances have changed, so your rent and any service charges may continue. If you have a mortgage, you may find you become liable for an early redemption penalty, which could run into hundreds of thousands of pounds. There are also likely to be a number of administrative and contractual relations which need terminating, some of which could give rise to further unexpected liabilities.

So it is important not to look upon handing back your GMS/PMS contract as a ‘soft’ option or stand alone solution; taking this route needs to be a very well planned and thought-through process, if you are to manage the many financial and legal implications.

 

What are the alternatives?

  • For a single hander, an alternative route to consider would be to take on a new partner, or multiple partners, who would be able to take over the practice, allowing you to step down.
  • For a partnership, a merger with another GP practice could be a way to open up new opportunities and other options.
  • You could also look for another healthcare provider who may be willing to take over your contract, such as a GP federation, a local hospital trust or a private provider.
  • Don’t forget that your local commissioner (CCG or NHS England) can work with you to help find an acceptable solution, potentially through financial assistance or other support mechanisms, since receiving the patient list back becomes an expensive problem for them to solve.

Conclusion

Handing back your contract can be the right answer in some circumstances, but it is an option which should never be entered into lightly. Make sure you have taken the right accounting and legal advice and are confident you fully understand the ramifications before you make your final decision.

For more information about handing back your GMS/PMS contract, mergers, retiring from practice, or for any other enquiries, then please contact Daphne Robertson on 01483 511555 or email [email protected]

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Topics: Partnership, Contracting & Procurement

Daphne Robertson

Written by Daphne Robertson

Daphne Robertson is the founder and senior Partner of DR Solicitors. Daphne is widely recognised as one of the country’s leading experts on all aspects of NHS Partnership and Regulatory law, and prides herself on her reputation for an exceptional level of client service.

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