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Mind the gap – Bridging the divide between new models of care and government Indemnity

Written by Tristan Lennox-Gentle, Director

April 2019 will bring the government-led changes to indemnity arrangements for clinicians.

Many GPs are counting the days until their own indemnity requirements are provided for by the state. Few GPs, however, have considered how government indemnity will respond in the context of the new models of care encouraged by regional NHS bodies.

For those engaged in multi-touch, devolved and privately operated care, for example through a federation, provider company, MCP (or similar), private practice, wellbeing service or other speciality care model, then you will already be aware of how different your service is from traditional General Practice. What is rarely understood is how different your insurance arrangement also needs to be. When we engage our customers on the subject, explaining where exposure sits is often the first stage, and for many, this is a surprise awakening.

Gap 1: NHS Entities, Federations and Provider Companies

Employers are liable for the actions of their staff. This is known as the principle of ‘vicarious liability’ and joins the employer in litigation claims against an employee if that individual lacks the appropriate indemnity to defend themselves. For multi-touch care providers (where a patient’s journey is managed by more than one clinician) it is increasingly common for claims to be made against the federation, MCP or practice. Without adequate indemnity the business becomes liable for the litigation costs and awards, and in the case of non-limited partnerships, this liability cascades back to the personal assets of the individual partners.

Even if your entity doesn’t directly employ staff, exposure still exists. In some cases, federations have devised protocols for practices to follow, but if the protocol is flawed, responsibility for its failure and defence of negligence reverts back to the entity that devised it. Where staff are contracted by the entity and have their own indemnity, should that cover fail to respond when challenged, either through its discretion or failings, the contractor once again becomes liable for the costs and awards. While Government indemnity addresses the particular concerns of individuals, the business in its entirety is broadly exposed, and with the route of least resistance for litigation being to direct it at the entity, more NHS entities are left vulnerable.

Gap 2: Private Care Providers

The Government indemnity scheme will not cover work that falls outside of the scope of an NHS contract, so if you are delivering private e-consultations, clinics, operating non-NHS contracts or running a technology-led healthcare business you have exposure to both your business entity and the staff within it. In the case of technology-led healthcare businesses, there is a cyber-risk too. These exposures for private companies are the same as mentioned in Gap one, but are exacerbated by the lack of support by any state-backed indemnity. Without adequate indemnity, private businesses and delivery of private contracts present the highest degree of risk of all the gaps.

Gap 3: Work Outside of General Practice

Primary Care professionals will enjoy cover under the Government scheme as long as their work falls within the scope of NHS General Practice services. For those organisations delivering non-standard NHS services, the cover requirements will be the same as Gap two. It is therefore important to clarify what type of contract you are tendering for, and the indemnity implications of securing it.

Gap 4: Contractual Requirements

Government indemnity presents clinicians with a foundation cover. However, many contracts have a requirement of a minimum limit of insurance, and in some cases this can only be satisfied by a standalone policy designed to meet the needs of the contract. We recommend reviewing insurance conditions under all contracts, particularly those for APMS and Out Of Hours/Extended Access tenders, to ensure compliance. With Government indemnity being neither a prescribed limit of indemnity or insurance-backed, entities need to take steps to mitigate grey areas where litigation may arise.

Gap 5: Run-Off Cover

Many contracts of service offered by the NHS require that cover is maintained for up to six years after the end of the contract. Even though government indemnity will cover new contracts awarded after April 2019, the ‘tail’ for liability arising from contracts before this date will need to be insured separately with Run-off cover- depending on the terms of the cover provided at the time.

Contracts of indemnity that are ‘claims-made’ in nature are not going to be covered by the government scheme, once again passing litigation back to the care provider’s entity in the majority of cases.

New models of care, particularly those that operate on a private basis, need to be careful when considering the adequacy of their insurance cover. While the government indemnity appears to offer positive headlines, it fails to appropriately protect the entity in the evolving landscape of care delivery. Litigation is indiscriminate, and for many the entity has the deepest pockets, and the overarching responsibility for those delivering the contract, so presents an easy target for allegation of wrongdoing.

If you are engaged in any of the services described here, you should take professional advice before delivering them, to ensure you are suitably protected from the gaps the state-backed cover doesn’t fill, both now, and after April 2019.