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Mid Essex Clinical Commissioning Group

Inherited care liability adds to CCG's financial woes

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Mid Essex clinical commissioning group could face an unfunded liability of up to £8m for NHS continuing healthcare claims made before the group came into being.

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The CCG’s latest finance report warns that it has inherited a “significant financial risk” from Mid Essex Primary Care Trust related to backdated claims for continuing healthcare, LGC’s sister title Health Service Journal reports.

Continuing healthcare funding covers the cost of a person’s on-going out-of-hospital care – for example, care home or community nursing services – provided their primary need for that care is deemed to be a “health need”.

PCTs last year faced a surge in retrospective claims for the funding after the Department of Health set in-year deadlines for anyone wishing to claim for care received between 2004-05 and 2011-12. DH accounts show that the provisions made by PCTs to cover continuing healthcare liabilities rocketed to £763.4m in 2012-13, from £133.8m the previous year.

Where a PCT has made a provision for continuing healthcare in its accounts, it has essentially set aside money to meet the future cost of settling those claims. Its successor CCG should therefore inherit both the liability and the funds to pay for it.

However, CCG leaders last year warned that if a PCT was unable to make a robust assessment of its continuing healthcare liabilities before it was abolished, it would have to record these as “contingent liabilities” – meaning its successors would not inherit funding to cover the claims.

The issue is controversial because the government has repeatedly insisted CCGs will not be responsible for resolving PCTs’ legacy debts.

Mid Essex CCG’s latest finance report states that its predecessor PCT made a £3.1m provision for retrospective care claims, but adds: “The accounts also reported a contingent liability of £6m (ie a potential liability to the CCG which is unfunded).”

It continues: “The Essex CCGs are in discussion with the [commissioning support unit] to agree the cost of handling the claims. The 2013-14 cost of claims processing will be met from the 2 per cent transformation fund. A substantial addition to the provision for the cost of the claims could be required in 2013-14.”

Mid Essex CCG accountable officer James Roach told HSJ: “The inherited contingent liability represents a significant addition to the financial constraints faced by the Mid Essex CCG. Any further increase would exacerbate an already challenging situation, however, the CCG is doing all it can to mitigate the risk of this happening.”

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