Feedback to engagement exercise questions and our response
Introduction
Between August and October 2020, CQC ran an engagement exercise for providers and the public to comment on proposals to update the Market Oversight provider guidance, based on the scheme’s operation and lessons learned since 2015.
We ran 7 focus groups, which represented 51 providers, and sought views on a set of changes and improvements to the guidance through a web form on our website. Overall, we received 14 responses. Our proposals for revising the guidance, feedback received and our response are summarised below.
Interpretation of “likely”
We proposed to change the interpretation of “likely” from “more likely than not” to “a real possibility” in relation to business failure and service cessation as a result of business failure. This change aims to strengthen protection for people using services and enable local authorities to have more time to enact contingency plans should business failure arise, and one or more regulated services cease.
Feedback
There was a mixed response to the question on the interpretation of conditions for notification to local authorities. Some respondents thought that it would promote better working between local authorities, providers and others to help people using services get better outcomes. Others were less keen and asked for worked examples to understand the process better.
Our response
We recognise that notifying local authorities about business failure and service cessation (Stage 6 notification) can be a significant challenge when this triggers the local authority’s temporary duty to continue care for affected people. Therefore, having more time to plan and act will help.
We have included a series of eight examples in an Appendix in the updated guidance to help providers understand the process better.
Impact on providers
We asked what impact the proposal above would have on providers.
Feedback
All respondents stated there would be an impact, from “some” to “significant”. Concerns were raised about a potential increase in Stage 6 notifications, which could negatively affect providers. In some cases, this could cause or accelerate provider failure, as it would reduce confidence in the provider’s ability to turn the situation around. There were suggestions that a Stage 6 notification would hamper a provider’s relationship with commissioners, lenders, suppliers, clients and staff. If information reached the public domain, this would further undermine the provider.
Our response
We have highlighted in the updated guidance that in the last five and a half years, CQC has only issued two Stage 6 notifications. The decision as to whether or not to issue a Stage 6 notification is taken extremely seriously, in line with legislation and acting on the facts of each case. In addition, there are very strict and robust controls around handling and storing commercially sensitive information.
Impact on local authorities
We asked what impact the proposal above would have on local authorities.
Feedback
There were supportive comments about earlier notification giving local authorities more time to work with providers and ensure continuity of care, and making the guidance more clearly focused on the interests of people using care services. There were some concerns that an increase in Stage 6 notifications would be unhelpful at this time and unnecessary, and that it may also make contingency planning less effective.
Our response
Stage 6 notifications are only made where absolutely necessary and after much careful consideration. It doesn’t mean that the local authority temporary duty of care under s48 will be triggered. It is for the local authority to decide whether the separate and distinct s48 test is met. We have added to the guidance that where a notification involves sharing information with key partners such as NHS England, as a messenger to clinical commissioning groups, we will set out risks and reminders consistent with those we provide to local authorities.
Conditions for notification
We asked whether the conditions for notification were clear.
Feedback
The majority of respondents agreed it was simpler and clearer to understand. Some respondents raised concerns about conditions lacking transparency and the possibility of litigation if intervention was premature.
Our response
An appendix in the updated guidance contains eight scenarios describing a provider’s journey through the Market Oversight assessment process, including a Stage 6 notification. The scenarios also contain an indication of our likely response, which adds clarity and helps alleviate concerns, including the safeguards to prevent pre-emptive notification.
Commercially sensitive information
We asked if the revised guidance set the right balance between our duties to respect commercially sensitive information submitted by providers and our statutory duties, particularly the protection of people using services.
Feedback
A majority said it was “fair”, “proportionate” and “reasonable”. Concerns focused on the handling of commercially sensitive information, with one respondent suggesting CQC would have too much discretionary power in disclosing sensitive information.
Our response
We have continued to emphasise the careful procedures in handling and storing commercially sensitive information. The guidance provides an example of sensitive information being permitted where necessary or expedient to protect the welfare of any individual. The decision to disclose will not be taken lightly, but in exceptional circumstances and with expert advice sought before a decision is made. Only one disclosure has been made since the scheme came into operation in 2015 and this was limited to specific financial information in relation to the regulatory action taken.
Engaging with third parties in the absence of the provider’s consent
We sought views about the issue of engaging with third parties in the absence of the provider’s consent.
Feedback
A small majority agreed with the proposal. Positive comments suggested:
- it would strengthen CQC’s position to fulfil its duty independently
- it would be in the public interest, especially if a delay posed a risk to people using services
- it would be helpful to gain assurance that the provider has continued support to remain viable
- that banks, lenders or others should not be able to prevent CQC from carrying out our duties by withholding consent.
Those who disagreed suggested it would impact negatively on the CQC-provider and the lender-provider relationship, may affect trust and willingness to cooperate, and may possibly mean legal challenges. Additionally, we received feedback subsequent to the formal engagement period at a CQC trade body briefing that expressed concern that the level of opposition to engaging with third parties’ consent was not reflected in the analysis report written by Traverse.
Our response
CQC may engage with a third party without a provider’s consent, having regard to our overriding statutory objective: to protect and promote the health, safety and welfare of people who use health and social care services (section 3 of the Health and Social Care Act 2008). CQC will also have regard to the wider public interest in assisting local authorities in carrying out their statutory functions. CQC has never gone against the current Stage 5 operating model, where we state we will only engage with third parties with the provider’s consent. This engagement is to clarify independently a statement by a provider (for example, more money being injected by a shareholder) rather than being a statutory duty to disclose.
The aim of the qualitative analysis we have undertaken as part of this engagement exercise was to investigate the range of views; the numbers are, to some extent, less critical to that process. All views are important; an issue raised by one person could be as important as something which is raised by many people.
Other than in exceptional circumstances (i.e. where any delay would pose a risk to people using services), we will seek provider views before reaching any final decision to engage with third parties. We will continue to implement this proposal.
Providers’ obligations
We asked whether the provider obligations are clearly explained.
Feedback
On the clarity of provider obligations, respondents were split equally, with 7 agreeing and 7 disagreeing. One respondent highlighted the guidance was clear about non-compliant providers; while another suggested there was a CQC-provider power imbalance regarding the steps CQC might take against a provider which did not cooperate. Some added this would be exacerbated by a lack of a mechanism to challenge CQC.
Our response
Chapter 3 of the guidance is clear about provider obligations and responsibilities, particularly in terms of submitting information when necessary and cooperating in meetings and regulatory action. We have flagged in the guidance that, where providers have failed to provide requested documentation, we will consider the reasons why before considering any further action in line with the section “responding to uncooperative providers”. There is also a section about how CQC will respond to uncooperative providers, as well as a further section about continuing provider obligations following a Stage 6 notification.
Steps against uncooperative providers
We asked whether the steps we may take against uncooperative providers are clearly explained.
Feedback
Responses to the final question about steps CQC may take against uncooperative providers showed a majority were clear about the options that may be taken.
Our response
CQC is committed to act proportionately, taking the facts into account, and having a clear audit trail in decision-making.