From 1 July 2019 all GP practices in England will have the opportunity to join a Primary Care Network (PCN). A PCN is a group of GP practices (Practice members) who work collaboratively to form a system (Network) with primary and community care staff, health and care organisations to provide integrated services to their local communities. A PCN can cover populations of 30,000 to 50,000 patients and the expanded primary care team assists to take the pressure off GPs and reduce patient waiting lists.

Practices wishing to join a PCN will benefit from funding of up to 70% towards employment costs (for clinical pharmacists, first contact physiotherapists, physician associates and first contact community paramedics) and 100% of the employment costs of social prescribing link workers.

The structures can give rise to joint liability between Practice members and issues for employees which should be considered before entering in to the arrangements.

Employment Considerations

There are a number of options regarding the employment of staff by PCNs and it is up to the Practice members to decide what structure works best for the PCN. The British Medical Association (BMA) has suggested various structures which I consider below:

Flat structure

A flat structure is one where the Practice members in the PCN are jointly responsible for staff. One practice within the network is used as the nominated payee with costs spread across the network.

The practices in the network would enter in to an agreement that they are jointly and severally liable for the functions and workforce of the PCN and that any liability arising from these functions are jointly split between the Practice members.

Under a Flat structure Practice members would use joint employment contracts to engage staff and all Practices would be regarded as employers. Contracts of employment would record that the employees’ place of work spans the entire network.

The BMA suggest that the policies and procedures of the nominated payee practice (such as those relating to grievance and disciplinary) will be applied.

Employment considerations – Flat Structure model:

Apportioning liability may be tricky when some practices in the Network operate as partnerships and others as sole practitioners with unlimited liability. Sole practitioners should exercise caution if entering in to a joint agreement with a limited company for example, whose personal liability will be limited.

Drafting contracts of employment to set out how the role and responsibilities will be divided between the practices will be complicated and should be drafted by a legal professional.

Deciding who will take responsibility for the operation of HR and performance management may be problematic across a large network, particularly for existing staff that may be used to aspects of HR falling within a certain department or with a particular member of staff at their individual practice.

To overcome this, the Practice members will need to make sure the contract of employment reflects the reality of the situation and only those listed as being responsible for certain aspects of HR and performance are responsible for these areas in practice.

The Network would need to ensure the supply of staff between various practices does not give rise to a chargeable supply which would be subject to VAT.

Depending on the structure of the Network, staff with an NHS pension may encounter problems accessing the scheme.

TUPE may apply if changing the identity of the employer.

In the event of a dispute a situation may arise where an employee is found as having more than one employer within the network.

Lead Practice

Under this structure staff would be employed by the Lead Practice and seconded out to work in the other practices within the PCN.

Practices members would select a lead practice; the Lead Practice would be responsible for engaging the additional workforce for the PCN. Service delivery will be extended to the network as a whole.

Practice members would enter an agreement that the functions and workforce of the PCN are entered into with the Lead Practice.

The Lead Practice would employ the network staff (or a selection of staff chosen by the PCN) and those staff will either be seconded out to Practice members as required or work across the Network. The funding benefits will be sent direct to the Lead Practice to fund the employment costs and can be distributed to Practice members as agreed.

Under this structure, the Lead Practice will be responsible for meeting the employee costs and liabilities and will assume HR obligations.

Employment Considerations – Lead Practice Model

A robust agreement between Practice member is essential to ensuring the workforce, liabilities and financial arrangements are clearly documented.

Possible VAT issues. .

Employment liabilities may prove an issue as these are likely to rest with the lead practice. Appropriate liability clauses will be required between the Lead Practice and Practice members.

There will need to be clear guidelines as to how and by whom employment related issues such as disciplinary issues will be dealt with. Failure to get this right could result in employment related liabilities for both the Practice and the Lead Practice.

Appropriate undertakings between the Lead Practice and Practice member(s) will need to be drafted to govern such matters.

TUPE may apply to existing staff whose contract of employment transfers to the Lead Practice.

Discrimination claims can still be brought against Practice members and individuals despite the contractual relationship with the Lead Practice.

Limited Liability

In this model Practice members would continue to employ their existing staff and provide their core services however a separate entity (i.e. a Company) would be subcontracted by the member practices to deliver services required by the DES and will itself employ the additional staff to do so. These services would be funded by the monies received via the DES.

In the unlikely event of the Company being a party to a primary medical services contract, the arrangement funding would need to be paid to the individual Practice member and then passed to the Company(if this was permitted under any funding or governance arrangements)

Employment Considerations – Limited Liability model

While this model limits the subsequent liabilities that practices are exposed to as the network workforce grows, staff employed by the Company may not be eligible to access the NHS pension fund.

The Network will need to be careful that existing staff remain with their original employer (i.e. are not seconded to practices within the network) to avoid any suggestion they are somehow employed by more than one practice (i.e. in the event of an Employment dispute).

Potential VAT issues when it comes to moving funding to the provider entity, and in connection with the ultimate service delivery.

Conclusion

The collaborative structure of a PCN and its ability to reach a greater number of patients has clear benefits for GPs, employees and patients alike. However, the contractual arrangements between the various Practices within the Network and with their employees are complex structures that can give rise to both operational (day to day) and legal issues if appropriate advice is not taken. A Practice entering in to a PCN should consider:

How staff will be managed on a day to day basis?

How employment liabilities will be shared between Practices in the Network?

Whether there is a risk employment arrangements will cause complications regarding VAT?

Whether the chosen option enables the additional staff to join the NHS Pension Scheme?

The national funding for the Additional Role Reimbursement Scheme will expire in 2024 and with no recommendations for further funding discussed to date; it is likely PCNs will bear the full cost of additional staff themselves. In light of this, Practices should also consider whether new appointments can be made on a fixed term basis, subject to available funding and how any costs that arise as a result of employment (e.g. redundancy costs) can be apportioned between Practices within the PCN.

For advice please contact Jade Linton, Senior Associate Solicitor on 0121 7964024 or jlinton@thursfields.co.uk

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