Recent changes announced by the CQC could have an impact on practice owners transferring an NHS contract via a partnership, particularly if a practice is due to be sold. Are partnerships still a viable pathway accepted by CQC and the NHS today?
Until recently, the transfer of NHS contracts has always been a relatively straight-forward process that could be completed via the formation of a partnership. This has meant that when looking to sell practice owners have historically been able to take on a partner and then several months down the line retire, leaving the new owner solely responsible for the NHS contract held by the practice.
There is a ground swell of noise around contracts belonging to the NHS, not the dentists, and the transfer of a contract to another dentist has only been possible due to a contract loophole.
How has it worked previously?
Over the past few years, vendors and buyers have successfully completed the transfer of NHS contracts via the partnership route.
And now?
Going forward, CQC has announced that they are going to stop agreeing to what they classify as a ‘bridging partnership’.
In other words, they are going to be much stricter about the partnerships they register.
Going Forward
The NHS is very clear that a partnership has to be registered with the CQC and it is possible for the CQC to decline to register a partnership on the basis that it looks like it’s for the purpose of selling a practice. A tricky situation for any dentist.
Since the announcement there has been some discussion as to whether the CQC can reasonably identify what they believe to be a bridging partnership. What has been declared is that from now on any partnership will have to be backed up with appropriate evidence – for example, this could include documentation such as staff contracts and finance agreements in both partners’ names. Once this proof is made available only then can the CQC be sure that the partnership is genuine and will consider registering it.
What does this mean for any dentist looking to transfer an NHS contract via the partnership route?
A dentist considering this route will need to create an actual partnership to ensure they secure registration from both the CQC and consent from the NHS. Each is essential, and you can’t have one without the other.
In turn, this could place greater demand on dental solicitors for them to put together the required paperwork that CQC is demanding to prove the validity of a partnership.
Dentists will also need to “promote” the fact that they’re genuinely entering into a professional collaboration with the intention of being in a long-term partnership, and not just doing so in order to sell further down the line, otherwise they won’t secure the NHS contract.
Dentists are already apprehensive about the CQC application process, mainly due to the fact that there is so much red tape, add the pressure of needing to prove your partnership is real in order to secure registration and the process is likely to become even more stressful.
How will this affect the market going forward?
How the changes will affect the sales market and dentists’ ability to buy and sell NHS practices remains to be seen, but what is known so far is that some CQC inspectors are proving to be more inquisitive than others when it comes to the paperwork and that the CQC and NHS do not appear to be working together on this.
Therefore, if you are considering selling, you should call us as getting the process wrong with either the CQC or the NHS is not something any dentist wants as this can ultimately lead to complications, delays and even rejection.
