Care home provider ‘broke law’ by charging extra fees to NHS-funded residents, rules regulator

Care UK wrongly charged continuing healthcare users fee for enhanced rooms and will make more than £1m in refunds, says Competition and Markets Authority, though provider rejects ruling

Photo: Fotolia/tashatuvango

Provider Care UK broke consumer protection law and NHS rules in charging continuing healthcare users an “unfair additional fee towards essential care”, the competition watchdog has ruled

The Competition and Markets Authority (CMA) found that the provider made paying the “shortfall fee” a condition of admitting residents, where NHS clinical commissioning groups’ funding was insufficient to cover the accommodation in question. This was contrary to the Enterprise Act 2002 and the National Framework for Continuing Healthcare and NHS-funded Nursing Care, said the CMA.

On the back of the ruling, Care UK has agreed to pay more than £1m in refunds to residents charged the fee since October 2015, and will be contacting eligible residents by letter next month. However, the provider rejected the watchdog’s conclusion that it broke the law, blaming “unclear NHS guidance” and questioning why the CMA had “singled out Care UK” when such fees were common practice across the sector.

Shortfall fee

In its judgment, the regulator cited as evidence a sample agreement that Care UK asked some people to sign before admission to one of its premium care homes – which offer enhanced facilities compared with standard homes.

This said that NHS funding was insufficient to cover the costs of the available room in the home and, under normal circumstances, the person would not be admitted; however, if they agreed to pay the shortfall they would be admitted.

The CMA said requiring someone to pay the shortfall fee as a condition of providing CHC was contrary to the Enterprise Act 2002, and also said Care UK’s approach was contrary to the CHC framework.

This was revised in 2018 to clarify when top-up payments were permissible, in response to the CMA’s 2017 report on the care home sector. This found that CHC users were, wrongly, being asked for shortfall payments, but there were also uncertainties about what additional services could be self-funded under NHS rules.

NHS rules on private funding

The current framework states that NHS funding should always cover assessed health and social care needs, and privately purchasing additional services should be entirely voluntary, and providers should not make this a condition of receiving NHS-funded provision.

It says there should be a clear separation between the delivery of NHS-funded and privately-funded services, so staff delivering privately-funded care should not also be providing treatment, care and support that are part of the person’s CHC care plan. Based on this, it says examples of private provision are hairdressing, aromatherapy, beauty treatments and entertainment, as well as rooms that are more expensive than needed to meet assessed needs.

A spokesperson for Care UK said the “enhanced fee” it charged covered a range of benefits for residents in a “premium setting including spacious ensuite rooms, on-site facilities such as cafes and cinemas, a wide range of lifestyle activities and a premium dining experience”.

‘Backwards step on consumer choice’

Residents always had the option of more modest, fully-funded homes as an alternative, and the CMA’s action to stop them “offering families the option of placing their loved ones in a premium home by making a personal contribution in addition to NHS funding is a backwards step in terms of consumer choice”, the spokesperson added.

“The number of families this affects within Care UK has always been very small and, as such, we agreed to settle with the CMA to enable us to focus on the more pressing challenges facing the sector at present.”

More than 160 residents at over 20 Care UK premium homes will be offered compensation by the end of November 2020. The majority of those affected will receive a pay-out of more than £1,000, with some receiving substantially more based on their circumstances.

The care homes provider has also signed formal commitments to stop charging this additional fee altogether for residents at its homes.

The Care UK spokesperson added: “In reaching this settlement, we do not accept that we have breached any rules or misled anyone taking a place with us, we have done our best to be transparent with all involved.”

Michael Grenfell, executive director of enforcement at the CMA, said “We are pleased to see Care UK committing to make repayments as quickly as possible, and to stop charging this additional fee altogether, which is good news for all current and future residents.”

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9 Responses to Care home provider ‘broke law’ by charging extra fees to NHS-funded residents, rules regulator

  1. Andrew October 14, 2020 at 10:56 am #

    Cats out the bag ADASS when Care UK says without shame such fees are common across the sector. Apparently having a “spacious en-suite room”, access to “onsite” leisure and “lifestyle” activities and “premium” dining experience is enhanced care. How dare we demand decent food, hat somone shove a DVD into a player and have privacy and space. Exploitation of the vulnerable, the acceptable standard of care endorsed by ADASS to boot.

  2. Joe October 15, 2020 at 8:24 am #

    Fully agree, shouldn’t all care be “premium care”.

  3. Chris Sterry October 15, 2020 at 6:22 pm #

    This gives all care homes a bad press, which may not be correct.

    Also it gives Social Care a bad press, when care homes are just one part of Social Care, for there are also hospices, Home Care, Supported Living, to name 3 areas and Social Care is not just for the elderly for it covers the full age range and many different conditions, such as Learning Disability, Autism, etc.

    This form of publicity implies all within Social Care are in it to make a ‘fast buck’, which is far from the truth.

    Take myself, for I have an adult daughter aged 51 who lives with myself and her care package is funded by a ‘Direct Payment’ from our Local Authority. The package includes provision of care from staff from a home care provider and also from persons employed by myself. I can assure you, that I am not creaming money from the Direct Payment, for it is audited by the Local Authority on a quarterly or half yearly basis.

    What I can assure you is that Social Care is in a very serious crisis, due to many years of under-funding from Central Governments to Local Authorities, which was made worse by 10 years of austerity cuts and now the addition costs relating to COVID-19. In fact Social Care has never been sufficiently funded from when it was put into the control of Local Authorities in 1970 from the mishmash of areas that provided Social Care before 1970.

    Social care is not only short of funding, but also staff to proved the required care, as many are only on the National Living Wage, rather than the Real Living Wage, which is £8.72 and £9.30 per hour respectively.

    Staff working conditions are also far from good as some of the carers will be working unsocial hours for no increase in pay.

    These are just some of the problems, but there are many others.

    So, there is a major crisis in Social Care, which led me to create the petition, Solve the crisis in Social Care,

    Please view and if you agree, please sign and share.

    Should you wish for further information this can be found at!Aq2MsYduiazgoCS-eyClXJ6zYi1r?e=inJRQx

    Thank you

  4. Chris October 15, 2020 at 11:31 pm #

    Not Just Care Uk- Barcester Care Homes state in their terms and conditions:

    Continuing healthcare. Where your condition is such that your dominant care needs are
    medical rather than peace of mind, support with daily living and assistance with mobility
    and personal care, you may be entitled to “full funding” by the NHS (provided you meet
    the NHS eligibility criteria for the award), just as if you were being cared for in a public
    hospital. The NHS offers a fee which they adjudge covers your healthcare needs in a
    standard care home setting; the NHS will not fully fund a resident’s decision to stay in a
    particularly attractive, comfortable or well-resourced home, which, to the extent that it
    exceeds the standard care provision, can be seen as a “lifestyle choice.” Hence, what the
    NHS pays is likely to be insufficient to cover the full service we offer in our well-appointed,
    comfortable and well-resourced Home. If you wish to stay or remain in our Home, and we
    are able to provide the care you need, we will advise you of a “lifestyle choice” contribution.
    Where you were previously admitted to the Home on a Nursing or Residential placement,
    the Weekly Fee including the enhanced care element may increase; but the net amount
    you pay is likely to reduce as the NHS will pay a larger proportion of the Weekly Fee. In
    the event that there is a delay or a dispute with the NHS concerning these payments, you
    will remain liable for the full Weekly Fee amount (including any uplift as a result of your
    changing care requirements since your initial Nursing or Residential placement).

  5. Anita October 16, 2020 at 5:51 pm #

    But it’s not publicity is it?

  6. Julia Smitheers October 22, 2020 at 8:46 am #

    What gives care homes a bad press is Cygnet Health Care receiving £434million in NHS and Local Authority funding and still arguing for ‘top ups’ and public funding of PPE and sick pay while paying out £50million in dividends.

  7. La Joconde October 29, 2020 at 9:03 am #

    I am surprise it is only now that this has been noticed. All services do the same including dentists. The only way to stop this misbehaviour is to remove this question from the form in the first place. Why does a provider need to know who is funding your care? Don’t NHS pays his bill for people with less disposable income to suffer? This does not only apply to charges.

    Sometimes it will also be the type of service you get because of who pays for your care. I have asked my manager why homes ask these questions and he attempted to give me an answer that did not make any sense at all. But who am I to challenge this when councils and NHS staff go along with this to satisfy these providers!

    Dental care check-ups are not only poor for the same group of people with less disposable income, but the check-ups often take few minutes and you are sent away. This is because you are less likely to request additional care such as hygienists and other procedures that actually generate the dental surgery income. Moreover, as NHS client you only get someday and some hours. Seeing that these people have to work in insecure jobs to survive rather than to live; they will sometimes miss these appointments with the risk of their teeth getting worse. Now that social service considers missing a child’s dental check as neglect, this does not help parents either.

    What is happening to Equality and human Rights or are we all becoming wilfully blind at the expense of poor and deprived adults and children?


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