Change of control of GP practices to US health giant held to be lawful

In late 2020, AT Medics sought authorisation from NCL CCG for a ‘change in control’ of its holding company pursuant to its contract with NHS England. This was one of a number of applications for its 37 GP practices across 49 sites in London, serving 375,000 patients, which were dealt with by the relevant CCGs in broadly the same way. It held eight contracts with NCL CCG, providing care to 57,000 patients.

The change in control was in favour of a company called Operose Health Ltd, which was a subsidiary of Centene Corporation. Centene is a US health giant, in respect of whom the Claimant had significant concerns. It had a track record of findings against it, including numerous in relation to overcharging Medicaid programmes. The directors of OHL were senior board members of Centene.

The process undertaken in respect of the authorisation had been widely criticised as being opaque. The decision had apparently been taken by the relevant CCG committee in December 2020, at a meeting in which the public had been excluded. Lead councillor cabinet members in each of the relevant London boroughs had raised the process as a “matter of huge public concern”, and Keir Starmer had also raised concerns. Concerns were raised in the national press as well.

The legal claim had centred on a failure to take into account the financial stability of OHL. The due diligence was limited to bankruptcy and insolvency; but the research did not uncover, for example, the publicly held information that OHL was loss making and reliant on cash injections from Centene. The Court found the CCG had not unlawfully limited its consideration; and treated the challenge primarily as a rationality issue, and determined that the approach of NCL was not irrational.

The claim also raised an issue of public involvement. The Claimant alleged that NCL departed from NHS England guidance which stated that, even if there was not a statutory duty of involvement, that consideration should be given to public involvement where there was “significant public interest”. The Court agreed with the Claimant that the CCG did not consider this. However, on the facts, the Court found that the arrangements it did make were lawful – for example publishing details of the decision on the website and having lay members on the relevant CCG committee. There was no further duty to, for example, notify the Councillor health leads.

This case demonstrates that a CCG does have to comply with public law principles when determining a change in control application, but the Court gives a wide margin of discretion to a CCG considering such an application. The Court’s finding that the guidance may require an extra-statutory duty to involve the public will be helpful for patients; however, the Court will consider the overall involvement process to determine whether there has been any unlawfulness in the change of control procedure.

The judgment is available on Bailii (R (Khurana) v North Central London CCG and NHS England [2022] EWHC 384 (Admin)). Leon Glenister appeared for the Claimant, led by Adam Straw QC.

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