We’re nearly two years on from the changes in the GMS contract which announced extra help to practices in the event of GP sickness absence.

So, how’s it going?

For some practices it’s working as intended.  Dr X is off sick for more than two weeks and, instead of the practice having to fund cover in full, the practice successfully claims for reimbursement of its locum costs from the CCG (or health board), up to the published limits.

But for others it’s a different story. We’re still hearing of practice managers engaged in a tussle with their CCG who refuse to authorise any payment.

The problem comes about when Commissioners misinterpret the guidelines and decide that practices that have locum insurance cannot make a concurrent claim to the NHS.

Before April 2017, Commissioners had discretion in meeting a practice’s locum costs and, often, if there was any form of private insurance or locum insurance in place, they would decline to pay.

Since April 2017, there is no longer any discretion. NHS England now takes the view that, if a practice chooses to take out insurance, it’s a commercial decision on their part and has nothing to do with NHS England. So, if a GP performer is off sick for longer than two weeks and the practice provides invoices showing the cost of cover for him/her, these costs should be met by the NHS – regardless of the existence of a locum insurance policy. In fact, the Commissioner shouldn’t even ask the practice whether it has locum insurance.

In view of the continuing confusion, in January 2019 we asked NHS Employers to clarify NHS England’s policy, which they did as follows:

“All practices are entitled to reimbursement of invoiced costs to cover sickness absence up to a weekly maximum, for up to 52 weeks, as set out at Section 16 of the SFE. It does not make any difference whether or not a contractor or practice has sickness insurance – the practice is still entitled to the same level of reimbursement. We have agreed this specifically with NHS England’s GP contracts team, Primary Care Commissioning (Medical Services) Directorate and GPC.”

We can therefore summarise the position quite simply: there is nothing in the GMS contract to prevent a practice claiming reimbursement from the NHS as well as claiming on its locum insurance policy.

Now let’s look at the moral position.

Some may question how a practice can ‘claim twice for the same thing’ and I hope to demonstrate why a practice would be acting prudently to arrange locum insurance even though (some of) its locum costs would be funded by the NHS:

• The NHS will pay up to certain limits (e.g. £1,751.52 pw in England). If locums cost more, there’s a shortfall.
• After 28 weeks’ sickness absence, the NHS payment falls to half its previous level. So, if the NHS paid £800 pw for the initial period of absence, it now falls to £400 pw. If locums cost more, there’s a shortfall.
• The NHS payment must be supported by invoices. If the practice has difficulty providing invoices, payment from the NHS will be delayed.
• Locum costs vary according to market conditions. A practice that arranges insurance for an anticipated shortfall can find itself underfunded if costs are higher than expected.
• If a GP is off for other reasons (jury service or compassionate leave, for example) there’s no payment due from the NHS.
• Some CCGs respond promptly to claims for reimbursement, others less so. If reimbursement claims take months to be processed, the practice’s cashflow can be hit hard.
• If a practice is forced to, or chooses to, cover an absent GP’s sessions with an ANP, the NHS won’t cover their costs.
• NHS reimbursement is subject to aggregation, which can reduce the funding the practice receives.

If a practice makes a profit from a GP’s absence, it’s our understanding that the profit would be taxed as income to the practice.

Let’s look at some examples:

1. Practice A arranges locum insurance at £1,000 pw for Dr X. Dr A goes off sick and a locum costs £2,500 pw. The practice claims £1,751 pw from the NHS and £1,000 pw from the locum insurance policy.

Practice A makes a ‘profit’ of £251 pw which would be taxable.

2. Practice B arranges locum insurance at £1,000 pw for Dr Y. Dr Y goes off sick and locum costs vary from £2,500 pw to £2,800 pw, except for those sessions that are covered by an ANP when locums are unavailable. The ANP’s costs are £1,200 pw. The practice claims £1,751 pw from the NHS – but not for any sessions covered by the ANP – and £1,000 pw from the insurance policy.

The insurance policy payment enables the practice to meet both the shortfall in the NHS funding as well as the ANP’s costs. Any residual ‘profit’ would be taxable.

Since a practice won’t know in advance when and for how long one of its GPs will be off sick and what their locum costs will be, relying entirely on NHS reimbursement can leave it underfunded.

It’s for the practice, not the NHS or its Commissioners, to decide whether it will buy insurance.

Author: Natasha Reynolds – Practice Cover