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NHS Contract Dispute results in finding that national tariff payable is payable for national tariff services despite “private” agreement to vary price

The Health Service Journal is reporting that a finding has been made within the NHS Standard Contract dispute resolution process to require a CCG to pay national tariff rates to an Urgent Care Centre.

Corby CCG has been in dispute with Lakeside Plus Limited, which runs the Corby Urgent Care Centre, over the rate payable for treating patients at the centre.  The parties appointed a QC as an expert to make a determination.  The expert decided that the services provided at the UCC meant it was a “Type 3 A & E” centre and hence, from 1 April 2014 when section 115 of the Health and Social Care Act 2012 came into force, national tariff prices applied despite a contract fixing lower prices.

The QC then decided that a 2014 agreement between the CCG and the provider to pay lower rates was unenforceable because the national tariff rules were not followed to agree the lower rate.  The expert decided that these rules exist for public benefit and so could not be waived by the parties.  The failure by the CCG and the provider to engage clinicians and the public in discussions about the rates meant that the national tariff procedures were not followed and so the variation agreement was of no effect.  The decision has left the CCG with a multi-million pound bill going back to 2014.

This decision is consistent with Johnson v Moreton [1980] AC 37 in concluding that contracting out of statutory rights is not possible where those statutory rights have a public interest element.  The rules of the national tariff exist to prevent NHS services suffering a “race to the bottom” on price and so arguably come within that category.  If that is right, this decision could be ground breaking decision because the rules of the national tariff apply equally to NHS bodies and to private providers.  It could mean that virtually all local agreements to reduce prices below national tariff could be unenforceable unless the parties have engaged with clinicians and the public before the reduction was agreed.

David Lock QC acted for Lakeside Plus Limited in this dispute.  The decision remains (arguably) confidential but the above details are taken from the HSJ report.