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It is not easy to determine when and how much a health authority or primary care trust must contribute to a resident's nursing home fees. Luke Clements explains why becoming a care trust may be the only solution.

What is a health authority's obligation tofund nursing home fees?

A health authority or a primary care trust is obliged to contribute towards a resident's nursing home fees in four distinct situations, all of which have been the subject of recent developments.

First, patients detained under section three or one of the criminal provisions of the Mental Health Act 1983 are entitled to after care services under section 117 of that act. In two recent Court of Appeal decisions it has been held, first, that the duty to provide these services is a joint one shared by the health authority and the social services department - and secondly, that these services must be provided free of charge (this decision is currently on appeal to the House of Lords). So where such a patient is discharged into a nursing home, the home care fees will be paid either by the social services department or the health authority (depending upon whether the patient meets the relevant "continuing care criteria" discussed below).

The second situation occurs as a result of an NHS ombudsman's report in 1994 (and 1995 guidance). Health authorities are required to publish "continuing care" statements that explain which patients' nursing home fees they will pay.

In 1999, the Court of Appeal gave its landmark judgement in the Coughlan case, which again concerned a health authority's refusal to fund patients' general nursing care needs. Not surprisingly, it concurred with the ombudsman's assessment: "substantial general nursing" was a health authority responsibility.

In the aftermath, the Department of Health undertook to issue guidance re-emphasising health authority responsibilities for "continuing care". Two years later on 28 June 2001 it added circular LAC (2001)18, Continuing Care: NHS and Local Councils' Responsibilities, to its website.

In large measure, this merely restates what was said in the 1995 guidance, although it fails to emphasise the obligation on health authorities to fund the full nursing homes' fees of residents, who require "substantial general nursing". However, it does require health authorities and social services departments to undertake a review of their "continuing care" responsibilities. This must result in the boundary being re-drawn to require greater health authority funding for such nursing home residents.

The third situation arises from two new major initiatives, the first being draft guidance "on providing free nursing care for people in nursing homes". The scheme is to be implemented in two phases. From 1 October 2001 all self-funders in nursing homes will receive between £35 and £110 per week in subsidy from the health authority or primary care trust depending upon the extent of their nursing needs. The second phase will commence in April 2002 when the remainder of nursing home residents (such as those fully funded by a social services department) will then be assessed and receive their allotted health authority or primary care trust contribution to cover nursing care.

Finally, a second initiative will result in health authorities funding increasing numbers of older patients in specialist "step-down" rehabilitation nursing homes for periods up to six weeks.

It appears inconceivable that health authorities will be able to re-draft their "continuing care" statements, implement the intermediate care reforms and assess all the 35,000 eligible residents in nursing homes between October and April.

In the medium term there appears only one sensible option for both health and social services authorities: however unpalatable it may appear, merger into a care trust is likely to be the least painful option.

Luke Clements is a solicitor and fellow of the school of health and social studies, Warwick University.