The standard clause 306 (required by regulations) in every GDS contract says:-
“Where the Contract is with an individual dental practitioner and that practitioner dies, the Contract shall terminate at the end of the period of 28 days after the date of his death”.
So, if you are the sole holder of a GDS contract, and you die, NHS England can terminate the contract.
Yes, NHS England could agree to allow it to carry on temporarily for up to a maximum of 12 months, if your personal representatives make such a request within 28 days of the death, but that is entirely at the discretion of NHS England.
They may agree this if it is a large contract in a geographical area not well served, i.e. if they might have an access issue if they terminated it immediately.
They will only allow it to continue in such circumstances if it is well run by associate performers and it is safe to do so.
They may allow it to continue to give them time to think about what they would like to do, in the context of the local needs assessment, and whether they might want to put it (or a contract of a different size / value) out to tender.
We know this is a real risk. Worcestershire PCT took this action following the death of John Bue in 2009. The family appealed the decision to the High Court and lost ( i - see link below).
Current NHS England policy confirms the same (ii - see page 127 at the link below).
However, clause 306 only applies where “the Contract is with an individual dental practitioner”."
If the contract is held by a limited company, LLP or by a partnership then clause 306 does not apply. A company or LLP cannot ‘die’ (though it can cease to be qualified as a dental body corporate to hold a GDS contract).
In a partnership between dentists, if one partner dies, then the contract continues to be held by the other.
Two possible solutions
This problem can be avoided if the GDS contract is transferred to a Limited Company or LLP, or if a partner is added to it as a joint holder.
There are a number of contractors who have decided to do this, to protect the contract from termination on death or other misadventure that would also lead to termination if it were still held by them solely (eg. erasure by the GDC).
For incorporation (transfer of the contract to a limited company), there is an application form that should be completed and submitted to NHS England.
If successful, a new GDS contract in the name of the Company (or a deed of novation transferring the existing contract to the company) must be generated and executed by NHS England.
However, there are many other issues to consider.
NHS England may refuse, as they are is not obliged to transfer at the same terms and so may renegotiate the UDA rate. There have also been occasions when they will only transfer on condition that their consent to a sale of the company in the future must be sought.
The decision to trade as a limited company instead of being a sole trader is one that will affect every aspect of the business, the occupation of the practice premises, your banking arrangements, the employment of the staff and relationships with suppliers.
The new limited company must be formed, and it must have Care Quality Commission Registration.
It might still be the option for you, but all of the issues must be considered.
To add a partner to the contract, a notice (a minimum of 28 days) pursuant to clauses 292 and 293 of the GDS contract must be served on NHS England.
The prospective partner must meet certain criteria, and it is best to choose a dentist (though DCPs, GPs and certain NHS employees may also be joint holders) who is on the NHS performers list with a clean record.
There must be a partnership agreement, in which it is agreed the new partner is bound under the GDS contract (one of the criteria), setting out the minority / sleeping status of the new partner and protecting that partner from liability.
NHS England has always insisted that the holders of a contract, whom it is assumed will carry on the regulated activities to be provided under it, must be appropriately registered with the Care Quality Commission.
If the criteria is all met, pursuant to clause 287 of the GDS contract, NHS England generates and executes a formal contract variation.
Current issues with the “solutions”
At the moment, NHS England is very busy with other duties, with most personnel redeployed to work on COVID-19 duties.
On most occasions, Local Area team Team staff are saying that they are either unable to generate the required contract or contract variation, or the usual authorised signatories are not available.
The Care Quality Commission are also distracted, and there is an unknown period of delay whilst they prioritise work that really matters.
So does that mean that it is too late? Not necessarily.
Whilst NHS England does usually insist on generating and signing a formal variation to the contract in order to add a partner to it, that is a ‘belt and braces’ approach as a result of the standard clause 287 that says “no amendment or variation shall have effect unless it is in writing and signed by or on behalf of the Board and the Contractor”.
However, it has often been argued that the addition of a partner (transfer from sole holder to partnership) by service of a notice under clauses 292 and 293 is effective in any event as long as NHS England responds in line with clause 295 which says:
“ If the Board is satisfied as to the accuracy of the matters … that are included in the notice, the Board shall give notice in writing to the Contractor confirming that the Contract shall continue with the partnership entered into by the Contractor and its partners, from a date that the Board specifies in that notice”.
In recent weeks, whilst Local Area team Team staff have been unable to generate and sign a contract variation, they have often been able and willing to write an NHS headed letter confirming all is in order and that the notice is accepted that as meeting the criteria for a clause 295 notice.
It is true that execution of a contract variation is the ideal. However, in the absence of that, a letter from NHS England accepting the notice will no doubt be sufficient, and certainly better than doing nothing. Will NHS England renege on its clause 295 notice at a later date? That is unlikely.
Whilst usually Local Area Team staff have been keen to ensure the partnership is CQC registered, requiring sight of the ‘sales and transfer position statement’ (confirmation of readiness to register the partnership) issued by the CQC, or sometimes even an issued Notice of Decision or certificate, in recent weeks they have been more relaxed about this, failing to insist on it on every occasion. That may be because current events lend a sense of perspective, or rushing and overwork increased workloads may be causing them to make this error.
Whilst it may be possible to take advantage of such relaxed attitudes / errors, that cannot be relied upon.
Consequently, it is good to be ready with an alternative plan – in case NHS England insists on seeing CQC registration for the partnership (which cannot be obtained at the moment).
Only the person who actually carries on regulated activities must be registered with the CQC.
In these circumstances the original contractor is already registered with the CQC of course.
Clauses 198-201 of the GDS contract set out the right of a contractor (the partnership) to sub-contract delivery of the GDS contract to another (the original contractor).
A formal notice must be served on NHS England under clauses 198-199. There is often the need for a formal written sub-contract.
NHS England can be convinced to accept a position where as soon as the contract is varied in to the names of the partnership, that partnership will sub-contract it to the original contractor (one of the partners), and the partnership will not itself ever deliver it, meaning it does not need CQC registration.