NHS dental contract; how to change the name of the Provider
DENTAL BULLETIN, ISSUE 58
There is no automatic right under the NHS dental contract to change the dental Provider on it, even if there is no other change to the way in which the services are being delivered and the Provider is the same in all but name. In fact there is a risk if you seek to change the named Provider this will be considered a material change and the contract will be terminated and re-tendered.
When is a change ‘material’ on a NHS dental contract?
The NHS guidance confirms that incorporation to a limited company is viewed as a material change which could result in termination and re-tender. Whether the material change is significant enough to warrant termination will depend on the circumstances and the local area team will review applications on a case by case basis. Essentially, they will ask whether:
1. The company is still owned and controlled by the original contractor and will the original contractor remain liable under the contract; and
2. The material change to the contract is minimal (contract value or activity level) and does it not change the essential conditions of the original contract?
If the answer to both is yes then the contract may be novated (transferred from one to the other) without considering a public tender, subject to any other criteria being met. For example, at least half of the directors of the limited company must be dentists or dental care professionals and none of those directors can be erased or suspended. In fact under section 43 of the Dentists Act 2005 it is an offence to breach either of these requirements.
If a limited company wishes to revert back to a partnership or sole practitioner, this will also be deemed a material change and the same considerations listed above will be applied.
What if a sole practitioner is selling his practice to another sole practitioner or a limited company? Given the NHS local area team looks at who will continue with the control of the contract, this is likely to be a material change that will result in a termination and re-tender.
Partnerships and contract variation
In relation to partnerships, depending on the proposed amendment, you may be able to deal with this as a variation, as opposed to a change, of contract. The NHS guidance on contract variation confirms the following:
– Individual to partnership. The National Health Service (General Dental Services Contracts) Regulations 2005 confirm that an individual can add one or more partners to the contract during its existence. Subject to the new dentist meeting certain requirements, the NHS will simply confirm that the partners have been added to the contract.
– Partnership to individual. If there are two or more partners and the partnership is terminated or dissolved, the contract can convert to an individual contract if:
– The remaining partners nominated one of the existing partners to undertake the contract; and
– That partner is a dental practitioner.
Again the NHS will simply confirm the variation in contract. This process is also followed when a PDS agreement with multiple signatories converts to an individual contract.
– Change of partners. This is not considered a variation to the contract, however, you still should notify the local area team if any partner is added or removed. This also applies to a change in constitution of a limited company. Where partners or directors are being added, assurances need to be given to the local area team that they are eligible to hold a GDS contract or PDS agreement. Where partners or directors are being removed, again the local area team needs to satisfy itself that the remaining composition is eligible to hold a contract.
How do you request a change?
In addition to the above, you will also need to consider what, if any, changes need to be made to your CQC registration, the tax implications for setting up a limited company or partnership and any legal requirements that may arise which each different business model.
If you need advice or assistance in relation to change the provider name, or in respect of changing your company format, please contact Laura Pearce on 0207 388 1658 or by email on firstname.lastname@example.org.
Laura Pearce, Senior Solicitor