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Financial Implications of Primary Care Networks Still Unclear

June 5, 2019

By Richard Humphreys, director at RMT Healthcare, the specialist medical division of Newcastle-based RMT Accountants & Business Advisors

One of the hottest topics of conversation among general practitioners and practice managers this year has been the plans for the formation of new Primary Care Networks (PCNs).

To provide the dictionary definition, a Primary Care Network ‘consists of groups of general practices working together with a range of local providers, including across primary care, community services, social care and the voluntary sector, to offer more personalised, coordinated health and social care to their local populations’.

The size and membership of each PCN is being agreed depending on the needs of local populations, and each one would have a ‘named, accountable’ clinical director to take responsibility for its operations.

All sounds sensible enough, especially in these days of growing need and pressurised healthcare budgets, but as is often the case with major initiatives of this type, the devil has proven to be in the detail – and as things stand, there are still many details to be sorted out.

The Department of Health & Social Care’s idea is to have PCNs in place and live by 1st July this year.  The initial registration had to be submitted to the CCG by 15th May and they will confirm any proposed changes by the end of the month.

The PCN agreement needs completing by 30th June 2019 – and from a financial point of view there are many clear accounting, tax, pension, VAT and employment implications to be considered.

The BMA has issued initial guidance and there are three main alternatives to consider, with the first being the flat contracting model with a nominated payee practice and shared employment contracts and workforce.

The second option is the lead practice model, where the lead practice is the nominated payee and holder of the employment contracts and workforce, and finally there is the third party provider model.

Whichever model or structure is chosen, it is likely this could change in the future as the DES and the network develops, and it is therefore essential that accountancy and legal advice is taken along the way, as the network agreement is legally binding.

Our advice to clients is to maintain as much openness and transparency across their PCN, once it is formed, as they possibly can.

Open a PCN bank account, decide how the revenues and funding are going to be managed and record every single detail of every transaction that is carried out in a way which allows all parties to see how things are being managed.

In this way, you can avoid any unnecessary confusion and/or misunderstandings across practices about the way in which your PCN’s financial operations are being managed and have all the information required in place to get things moving as smoothly as possible.

For further information please contact Richard Humphreys.
T: 0191 256 9500


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