Draft NHS Standard Contract for 2015/16: a consultation

Draft NHS Standard Contract for 2015/16: a consultation A response from Hospice UK 31 December 2014 1. About Hospice UK 1.1. Hospice UK (formerly Help the Hospices) is the national charity for hospice care. We champion and support the work of more than 200 member organisations, which provide hospice care across the UK, so that they can deliver the highest quality of care to people with terminal or life limiting conditions, and support their families. 2. Introduction 2.1. Hospice UK welcomes the opportunity to contribute to NHS England s consultation on the NHS Standard Contract for 2015/16, and on the draft contract itself. 2.2. Given the timeframe for the consultation period in part occurring as it does over the Christmas break it has not been possible to formally consult with our member hospices on the detail of the revised contract. Nevertheless, a number of issues previously identified by our members in relation to the 2014/15 contract remain. Our comments below therefore draw on our members feedback where possible. 2.3. Hospices are unique among health and social care providers in contributing so significantly to both the provision and the funding of end of life care. Local charities provide the vast majority of hospice care within the UK, caring for 360,000 patients and family members each year. 2.4. On average the NHS funds only 34% of the costs of providing hospice care by adult hospices with children s hospices receiving even lower levels of statutory funding (an average of 17%). NHS funding often takes the form of a part contribution towards the overall cost of care, with services frequently not commissioned on the basis of specific patient volumes or activities. 2.5. Over the past two years the use of the NHS Standard Contract in relation to hospice services has continued to increase. However we remain firmly of the view that the NHS Standard Contract, even in its 2014/15 Hospice Services formation, is generally an inappropriate tool to use where commissioners are providing only a contribution to costs and service specifications do not accurately reflect the relationship between commissioners and hospices as co-funders of care. Such an inaccurate reflection of the relationship creates difficulties for both parties. 2.6. Hospices have reported that the use of the NHS Contract necessitates administrative and reporting requirements that are often disproportionate to the value, length and nature of the funding arrangements between the NHS and hospices. 2.7. We welcome the stated intention by NHS England that grant agreements can be used where appropriate (for example where commissioners are making a contribution to

services). However, in practice, commissioners are reluctant to consider alternative arrangements which recognise the role of the hospice as a co-commissioner of services. 2.8. Hospice UK would welcome the opportunity to work with NHS England to consider how the standard contract could be developed further to more accurately reflect the relationship between commissioners and hospices. The on-going review of palliative care funding will also impact on the operation of the NHS Contract. We would like to offer our assistance in helping to ensure that commissioners use the appropriate funding agreements within the context of their relationships with local charities such as hospices. 2.9. In this response, we provide comment on both the consultation document and the draft contract, and make a series of recommendations. 3. Key recommendations 3.1. There are a number of steps that we believe could be taken to strengthen the funding agreements between NHS commissioners and individual hospices, with the NHS Standard Contract as one of those forms of agreement. These steps include: NHS England should support commissioners to understand the flexibility at their disposal to make appropriate commissioning arrangements for charitable providers such as hospices and consider the appropriate funding agreement, including grant arrangements. NHS England should support and encourage commissioners in taking a more consistent approach, such as a national framework, for the commissioning of hospice care and to promote the use of approaches such as co-commissioning agreements. This would improve commissioning practice and reduce complex contract variation negotiations. When use of the NHS Contract is appropriate, NHS England should facilitate a Contract which can fully reflect the relationship between the NHS and charitable providers such as hospices, and is accordingly proportionate. NHS England should support commissioners and providers in particular non-nhs providers to ensure effective implementation of changes to the standard contract. Commissioners should be encouraged to introduce multiple year arrangements as quickly as possible. 3.2. In this submission, we also make a series of specific recommendations in response to the key consultation questions, including: NHS England should explore the potential role of co-commissioning agreements for the commissioning of hospice care (Paragraph 4.2) NHS England should carefully consider the potential implications of introducing a end of life care services category within the NHS standard contract (Paragraph 5.4) The exemptions for small providers should be extended to hospices, given their small size (Paragraph 5.5, and 15.7) NHS England should prioritise action to develop a template grant agreement and supporting guidance (Paragraph 9.3) 2

NHS England should consider further the implications of Service Condition 6.5 Acceptance and Rejection of Referrals on charitable hospices (Paragraph 14.1) There should be a proportionate approach to the reporting requirements (Paragraph 15.2) 3.3. In addition, we provide some detailed comments on the content of the draft standard contract for 2015/16 in Appendix A. 4. Issue 1: To what extent should the NHS Standard Contract be used to support longer term strategic changes in local health systems? Would you propose any specific changes to the NHS Standard Contract to strengthen the ability of commissioners to use it to support the longer term strategic direction in local health systems? 4.1. We welcome the stated intention by NHS England to promote the local flexibilities available to commissioners in terms of the contract duration and payment and incentives, and the intention to lead work on innovative commissioning, contracting and pricing arrangements. 4.2. As mentioned in our response to consultation earlier this year on the NHS Standard Contract 1, we suggest that commissioners should be supported in brokering arrangements that more accurately reflect relationships between providers and NHS (and other) commissioners. These should include the development of appropriate commissioning and contracting arrangements for example co-commissioning agreements that recognise that recognise the partnership between charitable hospices (as a major funder and provider of care) and the NHS in the delivery of palliative care. We recommend that NHS England considers such arrangements and how learning from them may be used to encourage more collaborative and joined up work for the benefit of patients. We would be happy to work with NHS England and colleagues to develop thinking around such arrangements further, building on the number of already successful partnerships 2. 4.3. In relation to contract durations, the Monitor Fair Playing Review (2013) recommended that commissioners should be encouraged to offer contract lengths longer than a year where appropriate. 3 Research by Help the Hospices and the Commission for the Compact 4 recommended a minimum contract duration of three years for hospice and palliative care services. 4.4. However, in practice, our research 5 has found that while almost half of hospices have signed or been invited to sign an NHS Standard Contract for 2014/15, less than a third (31%) of NHS standard contracts covered a period of more than 12 months. Such short-term arrangements undermine the ability of hospices to plan, develop and sustain services. We recommend that commissioners should be encouraged to introduce multiple year arrangements as quickly as possible. 1 We responded to the previous consultation exercise, undertaken in September 2014, as Help the Hospices. 2 Various examples exist across the country. We would be happy to discuss these further with NHS England. 3 Monitor (2013) A fair playing field for the benefit of NHS patients: Monitor s independent review for the Secretary of State for Health 4 Help the Hospices and Commission for the Compact (2008) Positive Engagement, Future Practice: Learning for End of Life Care A study into the funding of palliative care. 5 Help the Hospices (2014) The Commissioning of Hospice Care in England in 2014/15. London: Help the Hospices. Available at http://www.hospiceuk.org/docs/default-source/policy-and-campaigns/2014-help-the-hospices-commissioning-survey-29-july- 2014.pdf?sfvrsn=2 3

5. Issue 2: How are the changes we made for 2014/15 working in practice? Have they delivered benefits? Have they caused any problems in practical implementation? 5.1. Effective implementation of changes to the standard contract is reliant to some degree on the technical guidance accompanying the documentation. It is therefore disappointing that the draft technical guidance has not been published alongside the draft contract. 5.2. Last year we welcomed the introduction of a specific service category Hospice Services in relation to the Standard Contract for 2014/15. We also welcomed the changes made to the Service Conditions element of the contract to reflect some of the circumstances of hospices and other smaller providers. 5.3. Nevertheless, we also highlighted in our response to consultation earlier this year that there remained a range of characteristics specific to local charitable hospices and to the care that they provide that the NHS Standard Contract (even within the Hospice Services formation) did not accurately reflect. 5.4. We are concerned therefore that the Hospice Services category has been replaced by an End of Life Care category. The expansion of the category is likely to lead to the contract formation being applied to a much wider range of service providers no longer restricted to charitable providers of hospice care, but now potentially incorporating large NHS and non-nhs providers of end of life care - with quite different circumstances, both in relation to legal position (i.e. hospice providers are mainly charitable providers subject to charity law and regulation) and financial position (i.e. hospice providers are primarily comparatively small providers but also bring a significant proportion of the funding for care). We are therefore concerned that at least some of the Service Conditions currently not applied to Hospice Services will be reintroduced for End of Life Care Services, and recommend that NHS England should carefully consider the implications and effects of introducing an end of life care services category. 5.5. We continue to suggest that hospices face similar issues in terms of a proportionate approach to contractual burden as those organisations currently identified as Small Providers. We therefore recommend that the exemptions for Small Providers in terms of Service Conditions be applied to hospice providers in recognition of the differential nature of hospice providers. The recognition of hospices as small providers would be consistent with the direction of travel being taken elsewhere in government, for example in exemption for all local charitable hospices from the requirement to hold an NHS Provider Licence for organisations with an NHS income of less than 10 million per year as a result of their low level of NHS income 6. 6 Only Marie Curie hospices and Sue Ryder hospices do not qualify for the exemption, as the NHS income received by the corporate bodies exceeds the de minimis threshold. 4

6. Issue 3: Are commissioners now routinely using the NHS Standard Contract for all their commissioned healthcare services other than primary care? If not, for which services are locally-designed contracts still being used? Are there specific problems with the format or content of the Standard Contract which are causing this? 6.1. We welcome the commitment set out in the consultation document to continue to look for opportunities to enable the tailoring of the NHS Standard Contract to suit the needs of smaller providers and lower value contracts. Unfortunately we feel for the reasons set out under issue 2 above that the current proposed approach is a step backwards in relation to services provided by hospices. 6.2. As we have indicated in our previous consultation response, local discussions have led to some commissioners to recognise that certain sections of the standard contract are not applicable to hospice services and have agreed to the amendment of elements of the contract. Areas of variation go beyond the sections identified as subject to local agreement. While not all commissioners are amending contracts in this way, we suggest that this is more an indication of hospices confidence and access to specialist resources in negotiating an appropriate settlement with commissioners. The degree of variation is an indication that key elements of the current contract are neither suitable nor appropriate for hospice services, in particular where services are only part funded. 6.3. The wording of this question suggests that all healthcare services should be commissioned using an NHS standard contract. As we have highlighted to NHS England on several occasions, in many instances, services provided by hospices are not commissioned in the true sense of the word. Instead, the NHS frequently makes a contribution towards the costs of the care provided, and often do not specify specific services or volumes. Only where the NHS is commissioning specific services at specific volumes, costs or outcomes is the use of an NHS standard contract appropriate. NHS England s own guidance to commissioners for the 2013/14 contract sought to remind commissioners that they have discretion over the arrangements used in such circumstances. Disappointingly, it appears that many commissioners have not heeded that guidance, and have continued to require hospices to sign an NHS standard contract inappropriately. We recommend that NHS England should take further steps to remind commissioners of the discretion at their disposal. 7. Issue 4: Are there conditions within the Contract which are inappropriate or redundant for particular service types? Where would alternate provisions be appropriate, and where would the omission of particular provisions be appropriate, because they do not add value? 7.1. We welcome the proposal to produce a model grant agreement for use with voluntary sector providers. A short form version of the contract for lower value contracts would provide commissioners and providers with further flexibility to ensure the form of agreement entered in to accurately reflect the rights and responsibilities of both parties. Hospice UK would be pleased to work with NHS England to explore options around further tailoring of the contract to meet these different needs. 7.2. Some hospices have raised concerns in relation to restrictions being placed on operations beyond the remit of the contract. For example restrictions imposed on 5

variation to services by commissioners that are making only a minority contribution to the cost of services. While commissioners have a proper interest in the quality and continuity of services to patients, the lack of clarity around service specifications has resulted in examples of commissioners seeking to constrain or impose financial penalties where appropriate operational changes have been made to non NHS activity. 7.3. We have concerns that a lack of awareness and confidence by some commissioners and their supporting organisations 7 about the voluntary sector and charitable providers, such as hospices, is leading to an overly restrictive interpretation of the contract in some instances. 7.4. We set out in Appendix A examples of a number of specific areas within the contract that we suggest are inappropriate or disproportionate for hospice services. 8. Issue 5: Would it be clearer if certain national requirements of NHS England as direct commissioner of services were built into the nationally-mandated text of the NHS Standard Contract (but perhaps to be included or excluded by appropriate selection of option via the econtract system)? 8.1. Hospice UK has no substantive comment to make on this. 9. Issue 6: Would commissioners welcome publication by NHS England of a model grant agreement template? Do you have a form of grant agreement which you have used successfully with voluntary sector providers which you would be happy to share with us? 9.1. We welcome the proposal to strengthen support and guidance to commissioners around the use of grant agreements in appropriate circumstances by publishing a nonmandatory template grant agreement, and to include additional guidance for commissioners on its use in the NHS Standard Contract 2015/16 Technical Guidance. 9.2. However we would suggest that any model grant agreement should be proportionate and open to adaptation for local circumstances, with agreements developed collaboratively between providers and commissioners. We would suggest the supporting technical guidance clarifies this position for commissioners and providers. 9.3. Given that contract discussions for 2015/16 will soon be well progressed, it is disappointing that NHS England has not yet published either the model grant agreement or the technical guidance document for comment. This absence of a model and clear guidance does risk commissioners looking to finalise agreements within the planning timeframe by inappropriately pursuing standard contracts. We are particularly disappointed as this is an issue we have been discussing with NHS England for some considerable time. We recommend strongly that NHS England prioritises action on the template grant agreement and associated guidance. 9.4. Supporting commissioners use of alternative approaches to the NHS Contract will help to promote innovation and strengthen partnerships between the NHS and local 7 Commissioning Support Units and/or other contracting support arrangements. 6

hospices. We would be pleased to support NHS England in this work, drawing on the expertise that exists within the hospice movement. 10. Issue 7: Do commissioners use the Contract Management provisions in practice? Do these work effectively? Do the potential financial sanctions in the Contract Management process act as an effective incentive for providers to remedy poor performance? Are sanctions pitched at an appropriate level? Is there a need for further nonfinancial levers, aligning commissioner powers under the Contract with action by regulators? 10.1. As we have indicated in our response to previous consultation on this issue, we have concerns in relation to the proportionality of elements of the current standard contract. Financial sanctions, in particular when based on a flat rate, are disproportionate where the contract value is limited and the commissioner is only part funding the service. Similarly where a provider is expected to pay compensation or have money withheld for certain events, where services are only part funded by the NHS. We suggest that the appropriateness and extent of such payments is not clear. 10.2. We therefore question the proposal to remove the flexibility for Variations to sanction (2014/15 Service Conditions 37.6), which would enable commissioners to reflect the differential circumstances of providers. While we acknowledge that the variation arrangements may not have increased the transparency of commissioner decisions on application of sanctions, we suggest that the proposal for NHS commissioners to publish information on sanctions in 2015/16 would help meet the objective of transparency. 11. Issue 8: Would you support changing the focus of Never Event sanctions for 2015/16, to focus on dis-incentivising failure by providers to report Never Events? 11.1. We note that the Never Events Policy Framework has been subject to separate consultation and that the final wording in relation to the 2015/16 Standard Contract is not included for consultation. We therefore repeat our view that the use of financial sanctions can work against the aim of creating an environment of openness and transparency where we want to learn from what goes wrong and why, and take action. Changing the focus from penalising each individual Never Event to dis-incentivising failure to report may assist in encouraging a learning environment, focusing on improving patient care. 7

12. Issue 9: What would constitute a proportionate approach to commissioners having oversight of provider sub-contracting arrangements? Are the expectations in the current Contract on subcontracting unreasonable or unrealistic and, if so, why? Should we review and clarify our definitions and guidance on sub-contracting? We have received requests to publish a non-mandatory template for sub-contracts would this be helpful? 12.1. We note the intention of NHS England to publish further guidance and a non-mandatory sub-contract template. We welcome the promise of further guidance as hospices have reported confusion by some commissioners in this area. As with other non-mandatory templates we suggest that guidance clarifies for commissioners and their supporting teams that non-mandatory templates are a starting point for discussion and should be tailored for local circumstances and should not as a matter of course replace current arrangements where they are already appropriate. 13. Issue 10: How frequently do commissioners and providers follow the formal dispute resolution process or are they usually able to resolve in-year differences informally? Is the process of Expert Determination set out in the Contract workable in practice? Is there sufficient clarity about the basis on which disputes relating to the agreement of a new contract should be handled? Would further national guidance in this area be helpful? 13.1. Hospice UK has no substantive comment to make on this. 14. Issue 11: Do commissioners use the activity management provisions in SC29 in practice? Are there some service types for which the provisions are simply not relevant at all? Do the provisions strike the right balance between commissioner and provider responsibilities and create strong enough incentives for each? 14.1. We note changes to the draft contract under Service Conditions 6.5 Acceptance and Rejection of Referrals. We fully support the rights of patients seeking to exercise choice and the principles of the NHS Choice Framework, nevertheless we are concerned that the requirements as currently set down within this section of the contract could conflict with agreed referral criteria, and could also potentially prohibit hospices from accepting patients through existing referral arrangements. If this was the case, this would be a very significant concern for any hospice, and could jeopardise any contractual arrangement. We recommend that NHS England explores the intention and implications of this section with hospices as a matter of urgency to ensure these concerns can be addressed satisfactorily. 14.2. The relevance of references to Activity Management and to Utilisation are unclear where contracts are not based on specific volumes or activities. Locally agreed and service specific measures are more relevant, accompanied by proportionate monitoring processes. Some hospices have reported commissioners seeking to use the standard 8

contract in instances where referrals are limited to a handful of individuals per annum. In such instances these requirements would be disproportionate for both provider and commissioner. 15. Issue 12: Are any specific aspects of information, payment and reconciliation processes set out in the contract unclear? Is the overall reporting burden appropriate? Do the nationally-mandated Reporting Requirements in Schedule 6B cover all of the core information which commissioners require for any contract? Is there a case for including a specific requirement in the Contract so that any claim for a provider for payment must be backed by datasets at individual patient level? 15.1. As we highlighted in our response to the previous consultation, for hospice services much of Schedule 6, even within the 2014/15 Hospice Services contract formation, remains not applicable. A Schedule more closely tailored for hospice services would assist both commissioners and hospices through improved consistency and by minimising the need for local negotiation. We would welcome the opportunity to work with NHS England and hospice colleagues to identify an appropriately tailored schedule. 15.2. We recommend a proportionate approach to reporting as part of the NHS Standard Contract, avoiding duplication of existing frameworks. 15.3. We have concerns in relation to the introduction of additional requirements around the ROCR (item 1) and NHS safety thermometers (item 4). We recommend that NHS England provides clear guidance around the application of these requirements in relation to hospice providers. 15.4. Several hospices have indicated that - for smaller volume services - monthly payment schedules may not be proportionate, especially where such services are commissioned by multiple commissioners. In some instances hospices have agreed a 6 monthly invoice schedule. However, this should be locally agreed. 15.5. We welcome the proposal not to introduce a requirement for any claim for payment to be backed by datasets at individual patient level. Such a requirement would be problematic to implement and operationalise in instances where payment is a contribution to services and is not based on patient volumes or activity levels. Moreover the data derived in such instances may give a misleading picture of services and patient experience and therefore be of limited benefit. 15.6. Hospices acknowledge the importance of the collection of accurate and complete data in service delivery and ensuring patient safety, and are actively engaged in work being taken forward by NHS England, Public Health England and the Department of Health to develop an appropriate data set for palliative and end of life care. Nevertheless - as suggested elsewhere in this document - the proportionality of sanctions in relation to any information breach where the service is part funded is also a matter of concern. 15.7. Furthermore we have concerns that the proposal to reduce the timescale within which providers must rectify Information Breaches from 6 months to 2 months may further disadvantage smaller providers with comparatively fewer resources to improve response times to this extent, and we recommend that NHS England considers this 9

as part of a wider review of the use of the contract for small providers, such as hospices. 16. Issue 13: What would encourage you to make greater use of the econtract system? Is the key requirement to have a basic system which works reliably from the start of the contracting round? 16.1. We recognise that an effective econtract system could streamline both the content and approach to contract discussions. We suggest that the system should not impose inappropriate restrictions on the variation of contracts where necessary. Some hospices found the restrictions on the extent to which the econtract can be tailored to local circumstances, problematic. The econtract should enable commissioners to have the flexibility to prepare agreements that are fit for purpose at a local level. 17. Issue 14: Would you support the additions and amendments to the NHS Standard Contract for 2015/16 (as detailed in s3.14 of the NHS Standard Contract for 2015/16 Discussion paper for stakeholders)? 17.1. We note the proposals to require providers to implement the National Workforce Race Equality Standard when published (Service Conditions 13.5.2), and to consider mandating the use of the NHS Staff Survey for all providers (Service Conditions 12) 17.2. We welcome the proposal by NHS England to engage with independent and voluntary sector providers and others to explore the appropriateness of the NHS Staff survey for all providers. Hospice UK would welcome the opportunity to work further with NHS England to collate views from hospice providers to contribute to this discussion. As previously stated - we would suggest that consideration is given to exploring staff surveys already undertaken by hospices as a proportionate and effective approach in this area. The NHS Staff Survey may not be directly applicable to such providers. 17.3. We firmly support the commitment to respect equality and human rights of staff, service users, carers and the public. We would therefore suggest the National Workforce Race Equality Standard (when published) include support and guidance for providers, in particular non-nhs providers, to ensure effective implementation. 18. Issue 15: How could the NHS Standard Contract be used to create appropriate incentives for providers and commissioners, in terms of the re-hiring of senior NHS staff in receipt of redundancy pay from their previous NHS employer? 18.1. In our response to the previous consultation, we made no comment on this issue. However we have concerns about the impact the requirements set out within the contract (General Conditions 5.16) may have in practice. Hospices report that they have regularly benefitted from the recruitment of senior managers from the NHS. While clearly this proposed contractual requirement does not prohibit recruitment of former NHS senior staff, we are concerned that it will act to restrict the pool of experienced staff willing to join hospices following redundancy from the NHS. Such constraints imposed by the NHS on a charitable entity are a concern particularly where the NHS is funding only a small proportion of the commissioned services. 10

19. Issue 16: How can the NHS Standard Contract team better support commissioners and providers using the Contract at local level? In particular, how useful is our Contract Technical Guidance, and do you have suggestions for additional topics which need to be covered in it? 19.1. As stated earlier we are disappointed that the NHS Standard Contract technical guidance has not been published alongside the draft contract. We look forward to commenting on the draft guidance in due course. 20. Additional comments 20.1. We note the changes introduced to ensure that the Contract is consistent with changes in legislation and in national guidance. For example in relation to Safeguarding and the Mental Capacity Act; Care of Dying People etc. We suggest that the implementation of any such changes should include support to commissioners and providers (in particular non-nhs providers) in relation to the interpretation of new requirements. 20.2. We also wish to highlight that the inclusion of certain requirements is inconsistent with current practice and guidance. For example: the application of the Friends and Family test (Service Conditions 12): hospice services are not currently required to carry out the Friends and Family Test (hospices currently often have their own patient and family questionnaires to derive similar measurements). the requirement to provide information in relation to the Health Service Ombudsman (Service Condition 16.2.2): the Health Service Ombudsman will not routinely accept complaints relating to hospice services. 20.3. As highlighted in our previous response to consultation on the 2015/16 contract, various requirements set out in the contract are disproportionate to the services commissioned and the value of many hospice contracts, particularly where commissioners are only part funding services. The current proposals would introduce further requirements that are potentially out of balance in comparison to the value of some of the contracts to which they will apply. These include (but are not limited to): requirements in relation to the identification and collection of charges from Chargeable Overseas visitors (Service Conditions 36.50A) requirements to maintain a sustainable development plan, and reporting against climate change adaptation (Service Conditions 18.2), and action in relation to the Public Services (Social Value) Act 2012 (Service Conditions 18.3) 20.4. We remain concerned that as requirements set down by the NHS standard contract become more extensive in at least some instances the costs incurred by hospice providers in meeting the requirements begin to outweigh the income generated. 21. For further information 21.1. For further information on any aspect of this response, please contact Karen Lynch, Policy Implementation Manager, Hospice House, 34-44 Britannia Street, London, WC1X 9JG. Tel: 020 7520 8200 Email: k.lynch@hospiceuk.org 11

Appendix A: NHS Standard Contract 2015/16 Detailed Comments The NHS standard contract establishes clear expectations on the commissioner and service provider on the basis that the contract relates to meeting the full costs of a clearly specified service. In relation to hospice providers, where the NHS is funding only a proportion of costs of a service, where there are no specified volumes, a number of the clauses within the standard contract create challenges. Examples include (but are not limited to): Restrictions on the variation of service (under General Conditions GC13) and staffing for example (under GC 5) can present barriers to hospices in managing the full range of their services. It appears inequitable that a contract covering only a relatively small proportion of funding can prohibit hospices from making necessary operational changes. These clauses can remove the ability of hospices to make necessary operational changes (e.g. recruiting new staff, changing elements of service configuration) in a timely and efficient manner. We suggest that this is inappropriate where the contract covers only a proportion of funding of those services (on average statutory funding covers 34% of costs for adult hospices and 17% for children s hospices). There are several places throughout the Contract where the Provider is expected to pay compensation or have money withheld for certain events. Where services are only partly funded by the NHS, the appropriateness and extent of such payments is not clear. Further details of some of the contract areas that we contend are inappropriate or disproportionate for hospice services are outlined below. General Conditions GC1 1.2 sets out the order of priority of contract documents 1) General Conditions, 2) Service Conditions 3) Particulars unless contract expressly states otherwise. However many of the General Conditions are expressed not to be variable, so scope for overriding them is very limited. This raises concerns about the ability of commissioners to remove or amend terms within the General and Service Conditions that are not appropriate. As set out above, the precedence of General and Service Conditions, many not variable, means that the contract can affect critical aspects of staffing and governance and so have (perhaps unexpected and unintended) effect of dictating, or constraining how, hospices carry out other non NHS activity. GC5 Staff 5.2.8 public disclosure of reviews and evaluations and Lessons Learned would not be normal practice for charitable organisations. This is of particular relevance where the contract meets only part of the costs of the service and staffing involved. GC5 Staff 5.13 constraints in the 3 months immediately preceding expiry of a contract, around changes in staffing. These could place quite significant limitations on a hospice s freedom to organise staffing which would be inappropriate where services are being only part funded. 12

GC5 Staff 5.14 requirement to indemnify the commissioner and any new provider providing replacement equivalent services [effectively meeting the cost of transferring the service]. Appropriateness where services are being only part funded, should the commissioning organisation be responsible for the risk, or relevant part of the risk? GC5.16 5.18 - Employment or Engagement following NHS redundancy - This requirement does not prohibit recruitment of former NHS senior staff, however in practice it could act to restrict the pool of experienced staff willing to join hospices following redundancy from the NHS. Such constraints imposed by the NHS on a charitable entity are a concern particularly where the NHS is funding only a small proportion of the commissioned services. GC11 liability and indemnity Potential implications for hospice insurance arrangements of certain additional requirements are not yet clear. For example requirements set out in GC11.7 - continuing to be the subject of appropriate indemnity arrangements for 21 years following termination or expiry of the contract. Timescales are disproportionate. GC12 assignment and sub-contracting These requirements are a further example of hospices needing to factor in consideration of the effect on NHS contract of all organisational changes, irrespective of whether the services being delivered fully fall within the remit of the contract. GC13 variations the requirements and restrictions around variations to the service are constructed on the basis of the service being fully funded. Where the service is only partly funded are they an inappropriate restriction on providing services to meet the organisation s charitable objectives? GC15 governance, transaction records & audit a number of these requirements may not be very different from existing arrangements, but of concern is ensuring that requests for information etc. do not involve disproportionate input which destabilises existing work schedules. As stated elsewhere, where a contract makes only a contribution to costs, there is a question as to the extent to which these requirements cover the service as a whole. GC18 consequences of expiry or termination: o 18.2 if a commissioner terminates the contract through provider default, or the provider not accepting a national variation the provider will pay any increased costs incurred for the service by the commissioner. Where the service is part funded is this an appropriate approach? o 18.7.3 where a contract is terminated a provider must cease its treatment of service users requiring the terminated service. In the event of a contract being ended a hospice may feel it appropriate to continue to deliver a service funded fully through charitable funds. Would it be appropriate for the contract to prohibit this? Of course services fully funded by charitable funds would continue to be subject to the requirements and regulations of CQC and the Charity Commission. GC21 Information Governance e.g. 21.2 requiring minimum level 2 performance against all relevant NHS info governance toolkit requirements. Experience of hospices (where comprehensive and robust systems are already in place) has been that a significant input of resources and time is required to attain level 2 status against the IG toolkit. Changes in IT arrangements within the NHS, from previous hosting of services in some instances, has presented additional difficulties for some hospices. This requirement has therefore presented a significant challenge for some hospices where commissioners have introduced the standard contract as the required form of agreement late in discussions around arrangements for 2014/15. 13

GC23 NHS Branding, Marketing and Promotion where services are only part funded, branding of those services as NHS services would be inaccurate and could have a detrimental impact on fundraising activities and income. Service Conditions Generally, much of this section of the contract is geared to the concept of patients passing through and leaving the system rather than entering the system at end of life. As a result, much of what is described as applicable to all is not relevant to hospices. We welcome those elements of the contract which reflect the circumstances of hospices and other smaller providers. Nevertheless, a number of areas continue to take a one size fits all approach treating small providers in the same way as large acute providers, for example - which are problematic for hospices as other smaller providers. Examples include: o SC3.2A setting out that failure is not excused if caused primarily by an increase in referrals and SC6.5 which sets out where providers must accept referrals where contracts do not include service volumes, and is part funded only, is this reasonable? o SC17 Services Environment and Equipment when a contract is part funding a service, elements of this section are problematic (e.g. 17.2 provider must at all times and at its own cost provide all equipment necessary ). For example hospices may be required to source bariatric beds only as and when referrals are made and would not be a good use of resources to have such beds available on a full time basis. o Certain national initiatives (e.g. SC24 NHS Counter Fraud and Security Management, and SC 32.8 32.9 Prevent Toolkit and WRAP programme) which are disproportionate for hospice services. o SC28 Information Requirements hospices acknowledge the importance of the collection of accurate and complete data. Nevertheless the appropriateness of certain elements of this section are unclear e.g. reference to SUS (28.10); and the proportionality of sanctions in relation to any information breach where the service is part funded only (e.g. 28.11 28.18). o SC29 References to Activity Management and to Utilisation are unclear where contracts are not based on specific volumes or activities. Note - some hospices have reported commissioners seeking to use the standard contract in instances where referrals are limited to a handful of individuals per annum. In such instances these requirements would be disproportionate for both provider and commissioner. o References to tariff or non-tariff pricing are also unclear where funding represents only a proportion of costs of service. (SC36 Payment Terms is therefore not wholly applicable). We would suggest that hospices face similar issues in terms of proportionality as Small Providers, and therefore that the same exemptions in terms of Service Conditions should be applied to hospice services. Particulars Schedule 6 for many hospices much of this schedule is not applicable. We would suggest that a Schedule tailored for hospice services would assist both commissioners and hospices through minimising the need for local discussions and improved consistency. We would welcome the opportunity to work with NHS England and hospice colleagues to identify an appropriately tailored schedule. 14