Health and Social Care Bill

Session 2010 - 11
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Health and Social Care Bill

Health and Social Care Bill
Part 3 — Economic regulation of health and adult social care services
Chapter 5 — Pricing
115

(11)
A notice under this section must specify when the consultation period in
relation to the proposals ends; and for that purpose, the consultation period is
the period of 28 days beginning with the day after that on which the notice is
published under subsection (2).
(12)
For the purposes of subsection (1) in its application to the first performance of
5
the duty under that subsection, the reference to licence holders is to be read as
a reference to such persons as are at that time providing health care services for
the purposes of the NHS.
118
Responses to consultation
(1)
If Monitor receives objections from one or more commissioning consortia or
10
licence holders to a method it proposes under section 117(3)(b), Monitor may
not publish the national tariff unless—
(a)
the conditions in subsection (2) are met, or
(b)
where those conditions are not met, Monitor has made a reference to
the Competition Commission.
15
(2)
The conditions referred to in subsection (1)(a) are that—
(a)
the objection percentage for commissioning consortia is less than the
prescribed percentage,
(b)
the objection percentage for licence holders is less than the prescribed
percentage, and
20
(c)
the share of supply percentage is less than such percentage as may be
prescribed.
(3)
In subsection (2)—
(a)
the “objection percentage” is the proportion (expressed as a percentage)
of commissioning consortia or (as the case may be) licence holders who
25
objected to the proposed method, and
(b)
the “share of supply percentage” is the proportion (expressed as a
percentage) of licence holders who objected to the proposed method,
weighted according to their share of the supply in England of such
services as may be prescribed.
30
(4)
A reference under subsection (1)(b) must require the Competition Commission
to determine whether the method proposed under section 117(3)(b) is
appropriate.
(5)
The functions of the Competition Commission with respect to a reference
under this section are not to be regarded as general functions of its for the
35
purposes of Part 2 of Schedule 7 to the Competition Act 1998; instead, Schedule
12 to this Act (procedure on a reference under this section) has effect.
(6)
Regulations prescribing a percentage for the purposes of subsection (2)(c) may
include provision prescribing the method used for determining a licence
holder’s share of the supply in England of the services concerned.
40
(7)
Where subsection (11) of section 117 applies, references in this section to licence
holders are to be construed in accordance with that subsection.
119
Determination on reference under section 118
(1)
In carrying out a determination on a reference under section 118, the
Competition Commission must have regard, to the same extent as is required
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Health and Social Care Bill
Part 3 — Economic regulation of health and adult social care services
Chapter 5 — Pricing
116

of Monitor, to the matters to which Monitor must have regard in carrying out
the functions of its to which the determination relates.
(2)
In carrying out the determination, the Competition Commission must also
have regard to such representations as are made to it by licence holders who
made objections to Monitor in accordance with paragraph 2 of Schedule 12
5
about the method proposed under section 117(3)(b).
(3)
In carrying out the determination, the Competition Commission—
(a)
may also have regard to matters to which Monitor was not able to have
regard in the case to which the determination relates, but
(b)
must not, in the exercise of the power under paragraph (a), have regard
10
to a matter to which Monitor would not have been entitled to have
regard in that case had it had the opportunity to do so.
(4)
The Commission may determine that the method proposed under section
117(3)(b) is not appropriate only if it is satisfied that Monitor’s decision to
propose the method was wrong on one or more of the following grounds—
15
(a)
that Monitor failed to have regard to the matters referred to in
subsection (1),
(b)
that the decision was based, wholly or partly, on an error of fact,
(c)
that the decision was wrong in law.
(5)
Where the Commission determines that the method proposed under section
20
117(3)(b) is appropriate, Monitor may use that method for the purposes of the
national tariff accordingly.
(6)
Where the Commission determines that the method proposed under section
117(3)(b) is not appropriate, it must remit the matter to Monitor for
reconsideration and decision in accordance with such directions as the
25
Commission may give.
(7)
A direction under subsection (6) may, in particular, require Monitor to make
such changes to the method in question as are specified in the direction.
(8)
A determination on a reference under section 118—
(a)
must be contained in an order made by the Commission,
30
(b)
must set out the reasons for the determination, and
(c)
takes effect at the time specified in the order or determined in
accordance with provision made in the order.
(9)
The Commission must give notice of a determination on a reference under
section 118 to—
35
(a)
Monitor,
(b)
the National Health Service Commissioning Board, and
(c)
such licence holders as made representations in accordance with
paragraph 2 of Schedule 12.
(10)
The Commission must also publish the determination; but it must exclude
40
from what it publishes information which it is satisfied is—
(a)
commercial information the disclosure of which would, or might,
significantly harm the legitimate business interests of an undertaking
to which it relates;
(b)
information relating to the private affairs of an individual the
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disclosure of which would, or might, significantly harm that person’s
interests.

Health and Social Care Bill
Part 3 — Economic regulation of health and adult social care services
Chapter 5 — Pricing
117

120
Changes following determination on reference under section 118
(1)
Where the Competition Commission remits a matter to Monitor under
subsection (6) of section 119, Monitor must make such changes to the method
to which the matter relates as it considers necessary, having regard to the
reasons specified for the purposes of subsection (8)(b) of that section.
5
(2)
Monitor must give the Competition Commission and the National Health
Service Commissioning Board a notice specifying—
(a)
the changes it proposes to make, and
(b)
its reasons for proposing to make them.
(3)
Monitor must make the changes specified in the notice unless it is given a
10
direction under section 121 before the end of the period of 28 days beginning
with the day after that on which it gave the notice.
(4)
If Monitor is given a direction under that section before the end of that period,
it must make such of the changes as are not specified in the direction.
121
Power to veto changes proposed under section 120
15
(1)
The Competition Commission may, within the period of 28 days beginning
with the day after that on which it is given a notice under section 120, direct
Monitor—
(a)
not to make the changes specified in the notice, or
(b)
not to make such of those changes as may be specified in the direction.
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(2)
Monitor must comply with a direction under this section.
(3)
The Secretary of State may, within that period and on the application of the
Commission, direct that the period for giving a direction under this section
(and, accordingly, the period referred to in section 120(3)) is to be extended by
14 days.
25
(4)
The Competition Commission may give a direction under this section only in
respect of such of the changes specified in the notice under section 120 as it
considers are necessary in consequence of its determination on the reference.
(5)
If the Commission gives a direction under this section, it—
(a)
must give notice specifying the changes proposed by Monitor, the
30
terms of the direction and the reasons for giving it, and
(b)
must itself make such changes to the method to which the reference
relates as it considers necessary in consequence of its determination on
the reference.
(6)
In exercising its function under subsection (5)(b), the Commission must have
35
regard to the matters to which Monitor must have regard when determining
the method to which the reference relates.
(7)
Before making changes under subsection (5)(b), the Commission must give
notice to Monitor and the National Health Service Commissioning Board
specifying—
40
(a)
the changes it proposes to make,
(b)
its reasons for proposing to make them, and
(c)
the period within which representations on the proposed changes may
be made.

Health and Social Care Bill
Part 3 — Economic regulation of health and adult social care services
Chapter 5 — Pricing
118

(8)
The period specified for the purposes of subsection (7)(c) must not be less than
28 days beginning with the day on which the notice is given.
122
Local modifications of prices of designated services: agreements
(1)
In the case of a designated service, the commissioner and the provider may
agree that the price payable to the provider for the provision of the service in
5
such circumstances or areas as may be determined in accordance with the
agreement is the price determined in accordance with the national tariff for
that service as modified in accordance with the agreement.
(2)
An agreement under this section must specify the date on which the
modification is to take effect; and a date specified for that purpose may be
10
earlier than the date of the agreement (but not earlier than the date on which
the national tariff took effect).
(3)
An agreement under this section has effect only if it is approved by Monitor.
(4)
An agreement submitted for approval under subsection (3) must be supported
by such evidence as Monitor may require.
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(5)
Monitor may approve an agreement under this section only if it is satisfied
that, without a modification to the price determined in accordance with the
national tariff for that service, it would be uneconomic for the provider to
provide the service for the purposes of the NHS.
(6)
Where an agreement is approved under subsection (3), Monitor must send a
20
notice to such commissioning consortia, providers and other persons as it
considers appropriate.
(7)
Monitor must also publish the notice.
(8)
The notice must specify—
(a)
the modification, and
25
(b)
the date on which it takes effect.
(9)
Monitor may publish guidance on the modification of prices under this section.
(10)
In making an agreement under this section, the commissioner and provider of
a designated service must have regard to guidance under subsection (9).
(11)
In deciding whether to approve an agreement under this section, Monitor must
30
have regard to guidance under subsection (9).
123
Local modifications of prices of designated services: applications
(1)
Monitor may, on an application by a provider of a designated service who has
failed to reach an agreement under section 122 with the commissioner, decide
that the price payable to the provider for the provision of the service in such
35
circumstances or areas as Monitor may determine is to be the the price
determined in accordance with the national tariff for that service as modified
in such way as Monitor may determine.
(2)
An application under this section must be supported by such evidence as
Monitor may require.
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(3)
Monitor may grant an application under this section only if it is satisfied that,
without a modification to the price determined in accordance with the national

Health and Social Care Bill
Part 3 — Economic regulation of health and adult social care services
Chapter 5 — Pricing
119

tariff for that service, it would be uneconomic for the provider to provide the
service for the purposes of the NHS.
(4)
Subsections (5) to (9) apply where Monitor grants an application under this
section.
(5)
The decision by Monitor on the application takes effect on such date as Monitor
5
may determine; and a date determined for that purpose may be earlier than the
date of the decision (but not earlier than the date on which the national tariff
took effect).
(6)
Monitor must send a notice of the decision to such commissioning consortia,
providers and other persons as it considers appropriate.
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(7)
Monitor must also publish the notice.
(8)
The notice must specify—
(a)
the modification, and
(b)
the date on which it takes effect.
(9)
The power to make an application under section 79(3) for the removal of the
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designation in question is (as well as being exercisable by the commissioner of
the service in question) exercisable by the National Health Service
Commissioning Board where it is not the commissioner of the service.
(10)
Monitor may publish guidance on the modification of prices under this section.
(11)
In making an application under this section, a provider of a designated service
20
must have regard to guidance under subsection (10).
(12)
In deciding whether to grant an application under this section, Monitor must
have regard to guidance under subsection (10).
124
Correction of mistakes
(1)
This section applies where the national tariff contains information that does
25
not accord with—
(a)
what Monitor and the National Health Service Commissioning Board
agreed on the matter concerned, or
(b)
where the matter was determined by arbitration, what was determined.
(2)
Monitor must send a notice to—
30
(a)
each commissioning consortium,
(b)
each licence holder, and
(c)
such other persons as Monitor considers appropriate.
(3)
Monitor must also publish the notice.
(4)
The notice must specify—
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(a)
the information that does not accord with what was agreed or
determined,
(b)
the correction required to make the information so accord, and
(c)
the date on which the correction is to take effect.
(5)
A date specified for the purposes of subsection (4)(c) may be earlier than the
40
date of the notice.

Health and Social Care Bill
Part 3 — Economic regulation of health and adult social care services
Chapter 6 — Insolvency and health special administration
120

Chapter 6
Insolvency and health special administration
125
Application of insolvency law to NHS foundation trusts
(1)
Omit sections 53 to 55 of, and Schedule 9 to, the National Health Service Act
2006 (voluntary arrangements and dissolution).
5
(2)
Before section 56 of that Act and the preceding cross-heading (accordingly,
under the cross-heading “Failure”) insert—
“55A
Application of insolvency law etc.
(1)
Regulations must provide for provisions of the Insolvency Act 1986
mentioned in subsection (2), and related provisions of that Act or of
10
rules under section 411 of that Act, to apply (with or without
modifications) to NHS foundation trusts.
(2)
The provisions of the Insolvency Act 1986 referred to in subsection (1)
are—
(a)
Part 1 (company voluntary arrangements),
15
(b)
Part 2 (administration),
(c)
Part 4 (winding-up of companies), and
(d)
Part 6 (miscellaneous provision about company insolvency).
(3)
The power to make rules under section 411 of that Act applies for the
purpose of giving effect to provision made by virtue of this section as it
20
applies for the purpose of giving effect to Parts 1, 2, 4, 6 and 7 of that
Act.
(4)
For that purpose—
(a)
the power to make rules is exercisable by the Lord Chancellor
with the concurrence of the Secretary of State and, in the case of
25
rules that affect court procedure, with the concurrence of the
Lord Chief Justice;
(b)
references in section 411 of that Act to those Parts are to be read
as including a reference to such of those Parts as are applied by
virtue of this section.
30
(5)
Regulations under this section must also provide for provisions of Part
26 of the Companies Act 2006 (arrangements and reconstructions), or
any related provision of that Act, to apply (with or without
modifications) to NHS foundation trusts.
(6)
Before making regulations under this section, the Secretary of State
35
must consult—
(a)
Monitor, and
(b)
such other persons as the Secretary of State considers
appropriate.”
(3)
In section 57 of that Act (mergers etc: supplementary) (as amended by section
40
169 of this Act)—
(a)
in subsection (3)(a), for “the persons mentioned in section 54(4)”
substitute “another NHS foundation trust, an NHS trust or the
Secretary of State”,

Health and Social Care Bill
Part 3 — Economic regulation of health and adult social care services
Chapter 6 — Insolvency and health special administration
121

(b)
omit subsection (3)(b), and
(c)
in subsection (4), for “any of the bodies mentioned in section 54(4)(a) or
(c)” substitute “another NHS foundation trust or an NHS trust”.
(4)
In section 64 of that Act (procedure for orders and regulations under Chapter
5 of Part 2 of that Act) (as amended by section 157 of this Act), in subsection (4),
5
omit paragraph (b).
(5)
In section 272 of that Act (orders, regulations, rules etc.), in subsection (6), after
paragraph (zc) insert—
“(zd)
regulations under section 55A,”.
(6)
In consequence of the repeals made by subsections (1) and (4), omit section
10
18(2) to (6) and (11) of the Health Act 2009.
126
Health special administration orders
(1)
In this Chapter “health special administration order” means an order which—
(a)
is made by the court in relation to a relevant provider, and
(b)
directs that the affairs, business and property of the provider are to be
15
managed by one or more persons appointed by the court.
(2)
An application to the court for a health special administration order may be
made only by Monitor.
(3)
A person appointed as mentioned in subsection (1)(b) is referred to in this
Chapter as a “health special administrator”.
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(4)
A health special administrator of a relevant provider must manage its affairs,
business and property, and exercise the health special administrator’s
functions, so as to—
(a)
achieve the objective set out in section 127 as quickly and as efficiently
as is reasonably practicable,
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(b)
in seeking to achieve that objective, ensure that any regulated activity
carried on in providing the services provided by the provider is carried
on in accordance with any requirements or conditions imposed in
respect of that activity by virtue of Chapter 2 of Part 1 of the Health and
Social Care Act 2008,
30
(c)
so far as is consistent with the objective set out in section 127, protect
the interests of the creditors of the provider as a whole, and
(d)
in the case of a provider which is a company, so far as is consistent with
that objective and subject to those interests, protect the interests of the
members of the company as a whole.
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(5)
In relation to a health special administration order applying to a non-GB
company, references in this Chapter to the affairs, business and property of the
company are references only to its affairs and business so far as carried on in
Great Britain and to its property in Great Britain.
(6)
In this section “regulated activity” has the same meaning as in Part 1 of the
40
Health and Social Care Act 2008 (see section 8 of that Act).
(7)
In this Chapter—
“business” and “property” each have the same meaning as in the
Insolvency Act 1986 (see section 436 of that Act);