Does a CCG placement in supported living run a coach and horses through the NHS placing rules?

The NHS placing rules are well known.  They are “anti-dumping” rules which are supposed to prevent a CCG from “placing” an expensive patient, such as a patient with an expensive NHS Continuing Healthcare (“CHC”) package, in the area of another CCG, waiting until the patient changes GP registration to a local GP in the new area and then saying that the change of GP registration means a change in the responsible commissioner for other NHS services – with the consequence that a CCG has moved an expensive patient off its books and landed another CCG with the on-going costs.  Given that an expensive CHC patient could cost £150,000 per year (or more) and that the cost might go on for years, “dumping” patients across boundaries can led to millions of pounds of saving for individual CCGs, albeit no overall saving for the NHS.  It was a serious problem before the placing rules were adopted in 2006 when patients were generally placed by urban NHS bodies in care homes which operated in rural areas, where building and staffing costs were lower.  Hence, for example, there were a large number of care homes in larger properties in Shropshire that were filled with patients from Birmingham, London and Manchester.  But, prior to 2006, the costs of these patients were met by the NHS in Shropshire, not the NHS bodies that had placed then out of area.

But the 2006 placing rules were changed in 2012 as part of the changes that saw CCGs replace primary care trusts.  The new rules are in the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012 (“the 2012 Regulations”).  The retention of commissioning responsibility now only applies where the patient is placed in a care home or an independent hospital.  As a number of recent cases have shown, if the patient is placed in supported living placement in another CCG area, the complex rules under 2012 Regulations do not apply and the responsible NHS commissioner changes with the change of GP registration.  So CCGs that understand the rules, with all their byzantine complexity, can still end up moving patients out of area and getting a financial windfall.

How did this loophole come about given that the old placing rules applied whenever a PCT “placed” a patient in the area of another PCT?  The answer is that, when the old placing rules were replaced by new rules under the 2012 Regulations, the simplicity of the old approach was abandoned and a new, complex and impenetrable set of rules came into force in their place.  These new rules must be a candidate for the most impenetrable piece of legal drafting.  Their full meaning is explained in detail in the book Hannah Gibbs and I wrote, chapter 13 of NHS Law and Practice (LAG: 2018).

However, in summary, where a patient is eligible for CHC, the relevant placing rule is under paragraph 3 of Schedule 1 to the 2012 Regulations.  In order for the original CCG to retain commissioning responsibility, the patient must be placed in either a care home or an independent hospital.  A “care home” in the 2012 Regulations is defined in the same way as that term is defined in the Care Act 2000, namely an “establishment” that provides accommodation and care services.  But, in the normal supported living arrangement, the care provider does not operate an establishment that provides both accommodation and services, so the property cannot be a care home.  In supported living, the accommodation is rented to the patient by the accommodation owner and the rent is paid by Housing Benefit (which is not payable if the property is a care home in any event).  Further, even if the accommodation and services are both provided by the same agency, the location has to be an “establishment” to be a care home.  In R (Whapples) v Birmingham Crosscity Clinical Commissioning Group & Anor [2015] EWCA Civ 435, Burnett LJ said at §41 “A person's home cannot be described in ordinary language as an establishment”.  If a property is not an “establishment” it cannot be a care home.  .

So the correct position in law is that a CCG that arranges a supported living placement in the area of another CCG for a CHC patient can wait until the patient registers with a new GP practice and then pass the funding costs on the new local CCG.  Hence, by doing this, patients can still be “dumped” and responsibility can be transferred to the new CCG which has a statutory duty to take on responsibility for funding all NHS services for the patient.

Further, following R (Wolverhampton Council) v South Worcestershire CCG and Shropshire CCG [2018] EWHC 1136 (Admin), the placing CCG has no discretion to keep funding the patient after the change of GP registration.  A CCG has no vires to fund a patient for which it does not have “responsibility” for the purposes of s3(1) of the NHS Act.  Hence the CCG is legally obliged to cease funding as soon as the new GP registration process is completed.  It also makes no difference whether the CCG has promised to carry on funding the patient despite the move.  A public body cannot expand its vires by promising to act unlawfully.  So, whether the supported living placement in another area was intentional or unintentional, the placing CCG has to stop funding.

Where patients lack capacity, the CCG may find itself having to act as a best interests decision maker, and thus de facto taking the decision that the patient should move to supported living outside the CCG area, and may even take the decision to change the identity of the patient’s GP.

However, a CCG which acts as such a decision maker can still take advantage of this loophole. The best interest decision would be taken on behalf of the individual, but not necessarily be a commissioning  decision on behalf of the CCG. It would be taken from what options were considered available to fulfil the CCG’s statutory duties to meet that individual’s assessed needs including/limited to the provision of care in an out of area supported living placement. Those options are made available by the CCG and as such any decision using the MCA would be secondary to the decision to make this option available. But even if the decision was a “commissioning decision” which was taken by the CCG, moving a patient to supported living in a new area and then arranging a new GP registration local to the new placement will still lead to a transfer of commissioning  responsibility.  There is, in practice, nothing that the new CCG can do to stop this (apart from moving the patient to another area).

However, a note of caution.  If CCGs take commissioning decisions to move patients out of area solely or mainly to facilitate a transfer of commissioning  responsibility, that is likely to be an unlawful exercise of those powers as it will offend against the Padfield doctrine.  CCGs are given commissioning powers to benefit patients, not to move patients for the purposes of taking cost off their budgets.  However, in order for there to be an effective challenge, the “placee CCG” would have to move fast and seek an injunction to restrain the “placer CCG” from undertaking the placement (or possibly arranging for a new GP registration.

To say that “this is not how it is supposed to be” is an understatement, but any effective remedy lies in changing the 2012 Regulations.  Until they are changed, most CCGs will have no choice apart from trying to understand and follow these rules.

David Lock QC, Landmark Chambers, and Paul Allerston, Solicitor-Advocate, Legal Director, Hill Dickinson LLP