![Page 1: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/1.jpg)
Federation Forming and Alliances
General Practice Management
4th June 2015
Nottingham
Andrew Lockhart-Mirams, Senior Partner
Lockharts Solicitors
© Lockharts 2015 1
![Page 2: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/2.jpg)
2
What is a Federation?
All sorts of things to different people!
GP FederationsGP Provider CompaniesSuper Partnerships
© Lockharts 2015 2
![Page 3: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/3.jpg)
3
Federations
• The collaboration of practices who wish to work together and share services• Assumes varying levels and ranges from a small degree
(i.e. a shared bookkeeper) to a large degree of federation (i.e. a walk-in centre)• The level of complexity is dependant upon the level of
federation desired• Essential to identify the aims, the steps required and the
potential obstacles that practices may face when choosing to federate
© Lockharts 2015 3
![Page 4: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/4.jpg)
Why have a federation?
• Benefits• Increases co-ordination (economies of scale)• Increases capability (specialisation)
• Risks• Adds little or no value (increases costs/overheads)• Increases bureaucracy/interference
• Key objectives?• Financially self-sustaining (profitable?)• Reduce administrative burden on general practice
© Lockharts 2015 26
![Page 5: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/5.jpg)
5
Federating – The Key Points
• Purpose• The correct structure• Liabilities of members• The mechanics• A rule book
© Lockharts 2015 4
![Page 6: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/6.jpg)
6
Federating - The Purpose
• What can be achieved• Protection – Replacement• Profits• Patients• Population
• Back room• Sharing staff• Clinical services• Premises
© Lockharts 2015 5
![Page 7: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/7.jpg)
7
Size• The nature of federation alters based on size and
purpose• 50-60k patients• 100k patients• ???
© Lockharts 2015 6
![Page 8: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/8.jpg)
8
Wide range of developing legal entities
• Loose associations - X• Partnerships - X• Companies limited by shares - Y• Companies limited by shares as CICs – probably X• Companies limited by guarantee - X• LLPs - X
© Lockharts 2015 7
![Page 9: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/9.jpg)
9
Companies Limited by Shares
• Companies Act 2006• Regulated by Registrar of Companies• Liability of shareholders limited to unpaid contributions
on share price• Articles filed at Companies House• Corporate tax regime (speak to your accountant)• Can be an NHS Pensions Employing Authority where
conditions are satisfied
© Lockharts 2015 8
![Page 10: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/10.jpg)
10
• Two tier structure – shareholders (the owners) and directors (the managers)• Can be for profit/not for profit• Directors take on significant risk and owe statutory and
fiduciary duties to the company• Consider directors’ liability insurance
© Lockharts 2015 9
Companies Limited by Shares
![Page 11: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/11.jpg)
11
CICs• Limited company structure & governance• Overseen by CIC Regulator• Must satisfy “community interest test”• Initial statement• Annual community interest report• Can be an NHS Pensions Employing Authority but must
satisfy conditions• Downsides• Statutory cap on dividends• Asset lock• Cannot convert back to an “ordinary” company
© Lockharts 2015 10
![Page 12: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/12.jpg)
12
How providers function as share companies
• Shareholders own• Directors execute
• Either directly or
• By delegation• Directors are employees - ? service contracts• If directors perform - ? subcontracts
© Lockharts 2015 11
![Page 13: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/13.jpg)
13
The majority of work is “drop-through”
• Commissioner
• Provider
• Performer
© Lockharts 2015 12
![Page 14: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/14.jpg)
14
How do performers interface with CCGs?
• Almost always indirectly – in contractual terms• But there is bound to be a lot of discussion
© Lockharts 2015 13
![Page 15: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/15.jpg)
15
Sub-Contracting
• “Drop-through” work subcontracted to practices• Will adopt all main terms• And add specific provisions and possibly more KPIs
• Almost always needs consent
© Lockharts 2015 14
![Page 16: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/16.jpg)
16
Employment – contractual changes
• Consent/Agreement essential
• No agreement = a breach of contract, save where statute requires a change
© Lockharts 2015 15
![Page 17: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/17.jpg)
17
Alliance Working
• A strategic alliance is an agreement between two or more parties to pursue a set of agreed upon objectives needed, whilst remaining independent organisations
• Mostly used for alliances between Hospitals, GPs and Social Care
• Data sharing!
• Not really a MCP
© Lockharts 2015 16
![Page 18: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/18.jpg)
18
Collaborative Working
• Collaboration also brings enormous challenges which should not be ignored
© Lockharts 2015 17
![Page 19: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/19.jpg)
19
Big gains
• Policies• Manuals• High calibre management• Internal referrals• Employment of specialists• Critical mass – but practices retain independence
© Lockharts 2015 18
![Page 20: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/20.jpg)
20
But with all federating a key issue is…
Liability
© Lockharts 2015 19
![Page 21: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/21.jpg)
21
Other key issues - 1• Directors and shareholders – differences• Types of share – ? redeemable• Share funding• Share valuation• Exeter list
Profit Not-for-profit
© Lockharts 2015 20
![Page 22: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/22.jpg)
22
• Pensions
• The “Classic” APMS Scheme – person eligibility
• The Independent Provider Scheme – contract eligibility
© Lockharts 2015 21
Other key issues - 2
![Page 23: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/23.jpg)
23
Other key issues• CQC registration• Fit and Proper Person Requirements for Directors• Registration for VAT?• Depends on services provided – do they fall under
the health exemption for medical services?‘The primary purpose of the services is the protection, maintenance or restoration of the health of the person concerned’
© Lockharts 2015 23
![Page 24: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/24.jpg)
24
• VAT on provision
• If services are provided by an organisation separate from the practice, this may be a VAT-able supply unless the arrangement is purely expense sharing. Needs accountancy advice.
© Lockharts 2015 24
Other key issues
![Page 25: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/25.jpg)
25
Declarations of Trust
• For each shareholder
or
• Partnership Agreement
© Lockharts 2015 22
![Page 26: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/26.jpg)
26
Documentation for Federation
• Documentation to form a group – support for emerging leaders• Articles of association• Shareholders Agreement• Minutes and resolutions
© Lockharts 2015 25
![Page 27: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/27.jpg)
27
• Over 30 years experience helping general practitioners • Full service” healthcare team for providers covering all aspects
of partnership, surgery premises, employment contract work and contentious issues
• Extensive understanding of general practice issues and ambitions and detailed knowledge of regulation, policy, funding and contracts
• Accredited mediators helping with facilitation• Structural advice and implementation of mergers and
acquisitions• Only acts for providers and never for commissioners
How Lockharts can help you
© Lockharts 2015 27
![Page 28: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/28.jpg)
28
The Boring Legal bit!
The content of this presentation is intended only as information and should not be considered or relied
upon as legal advice. Lockharts cannot be held liable for any loss caused by any act or omission as a result of the information in this presentation.
This presentation, in which Lockharts is the exclusive copyright owner, is also confidential to those
attending today’s event and must not be disclosed to or shared with any other firm, individual or
organisation.
© Lockharts 2015 28
![Page 29: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/29.jpg)
29
Contact Details
Lockharts SolicitorsAndrew Lockhart-MiramsSenior Partner
E: [email protected]: 020 7383 7111www.lockharts.co.uk
© Lockharts 2015 29
![Page 30: Andrew Lockhart Mirams Federation Forming and Alliances](https://reader035.vdocument.in/reader035/viewer/2022081514/55ca3887bb61eb95698b46d9/html5/thumbnails/30.jpg)
30
Connect with us
© Lockharts 2015 30