Primary Care Networks: 10 top tips when sub-contracting

In this update, we look at an ever increasing trend when it comes to sub-contracting the delivery of the Network Contract Directed Enhanced Service (DES) of any part of the DES (whether to a third party provider, your own provider arm or otherwise) and highlight some of our top tips when it comes to documenting this.

1. Certainty. So that there is certainty on the terms applicable to the sub-contracting, we would always recommend that a formal agreement is agreed between the parties. Having supported a number of PCNs, and given the evolving nature of the Network Contract DES, we generally adopt a “framework” approach towards such agreements whereby the the front end part of the agreement covers the overarching terms applicable to the sub-contracting arrangements and the back end contain schedules that include the service specific requirements and can be updated with ease.

2. Services. Be specific on the services to be supplied. These should (where relevant) align with the relevant service requirements of the Network Contract DES.

3. Service changes. Be mindful of the fact that the Network Contract DES varies year on year so consider including provisions that allow the services provided by the supplier to be changed with relative ease.

4. Location. Be specific on the locations from which the services are to be provided. Consider what, if any, access the core network practices will need to afford the staff employed by the supplier.

5. Supplier obligations. Be clear on the general and specific obligations that will apply to the supplier. This may include:

• complying with applicable laws, statutes, regulations from time to time in force;
• performing the services with skill and diligence in accordance with good medical practice and the relevant requirements of the Core Network DES;
• using personnel who are suitably skilled and experienced to perform the tasks assigned to them and (where relevant) those that satisfy the criteria set under the Network Contract DES;
• providing such information as is required to ensure that the practices and PCN as a whole complies with their reporting requirements and to otherwise co-operate in all matters relating to the provision of the services they are to provide.

6. Charges & payment terms. Be specific on the charges that will be payable for the services provided and the terms applicable to those payments. As part of this, care will be needed when it comes to considering the VAT position on services being supplied. If they are VATable supplies and no exemption applies, then consider whether the charges should, from the perspective of the PCN, be inclusive of VAT.

7. Liabilities & indemnities. Be clear on the limits on liability (if any) applicable to the services provided by the sub-contractor and the indemnities that will bite in the event that the sub-contractor is in breach of their obligations and that breach causes a loss, demand, expense or other liability.

8. HR. Be clear on how HR issues are to be handled. To the extent that the supplier employs the relevant staff members, then we would expect an explicit acknowledgement that the handling of all HR matters will sit with the supplier but for there to be a mechanism where service deficiencies can be discussed between the parties so appropriate measures can be taken to address these.

9. Termination. Be clear on the circumstances where the parties can bring the sub-contract arrangements to an end. This commonly includes the ability to terminate:

• if the Network Contract DES, or any relevant specification which is the subject to the sub-contracting arrangements, comes to an end;
• if there is a material breach and/or persistent breach;
• if the sub-contractor acts in a manner which brings or is likely to bring the PCN or any of its members, into disrepute;
• if relevant, if the sub-contractor is a member themselves and they cease to be a member of the Network; and
• where either party serves a specified length of notice to terminate (although we would recommend that any such notice should only allow the arrangements to cease at the end of the Network Contract DES year within which notice is served).

10. Exit arrangements. Be clear on the exit arrangements that will apply if the sub-contract and/or any specific service provided under the same comes to an end. Consider whether you need express obligations on the supplier to provide an orderly handover of services to any new provider and what (if any) provisions apply when it comes to the transfer of any affected employees under TUPE.

If you need support in connection with the sub-contracting of services as a PCN or supplier then please contact Rob Day or for information on our primary care expertise visit our webpage here.