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Death, Taxes and CQC fees: A View from the Front Line

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By Terry Donohoe United Kingdom Homecare Association

Introduction

“In this world nothing can be certain, except death and taxes”…and CQC fees.

The inevitability of increases to the annual fees paid by homecare providers to the Care Quality Commission (CQC), has taxed many, particularly over the last year.

By law, every registered provider must pay fees each year to cover all the costs of:

  • initial registration;
  • changes to a provider’s registration; and
  • CQC’s activities associated with monitoring, inspection and rating.

Fees depend on the:

  • type of service provided; and
  • the scale of the services.

If you don’t pay your fees, CQC may cancel your registration!

 

The Road to Full Cost Recovery

Regulation costs but, in 2016, Government decided that CQC must move to full cost recovery by 2020 and reduced its share of the pot.

For many homecare providers this transition has brought about some eye-watering increases, particularly over the last year.

For 2016/17, CQC levied fees on a per location basis meaning a single location fee of £2,192. A sliding scale, based on the number of locations, was applied to larger providers with multiple locations.

For 2018, CQC decided to levy fees based on the scale of a company’s operations at each location, calculated on the basis of the number of service users each location was responsible for.

According to CQC’s data there are, currently, 5,703 registered locations in England, broken down into bands according to the number service users: 50 or fewer service users; 51 to 100 service users; 101 to 250 service users; and more than 250 service users.

 

 

 

The Funding Model and Its Impact

So far, so good?

Now, any change in a funding model will bring about winners and losers.

CQC’s funding model for 2018 was based on the following formula

£239 + (the number of service users x 45.77)

Under this model a very small provider with, say, 10 service users and a single location, would expect to pay around £696 per year. That’s a reduction of almost £1,500 from April 2018.

Great news if you were one of the 3,769 providers registered with 50 or fewer service users with either a reduction in fees or a rise of £336 (15%) over the 2017/18 levels.

But what about the 1,067 providers who have between 51 and 100 service users? They saw their fees increase to £4,816: a 120% increase. Maybe not so good?

The 647 providers with between 101 and 250 service users saw increases up to £9,490 above the 2018/19 levels a staggering 433%.

However, the 210 providers with more than 250 service users saw their 2018 fees increase by an eye-watering £21,000 or 1000% over the previous year!

Needless to say, many providers have reacted angrily to the fee increases and some have considered pulling out of the sector, refusing or handing back some care packages or cutting back on staff training.

Also, depending on when their CQC invoice arrived, many providers had little time to budget for the extra costs placing even more pressure on them.

What this means for potentially vulnerable service users who may need short duration or short term care, such as end of life care, remains to be seen.

 

Where do we go from here?

CQC made no changes to the funding formula for 2019/20 so, from 1 April 2019 the formula is

£249 + (the number of service users x 51.852)

This means, that across all bands, the fees will increase by around 13% over 2018/19 levels.

The smallest providers will still see lower fees than they were paying in 2017 but the biggest providers will still be paying well over £20,000 in fees this year.

 

Balancing the costs of Regulation

CQC has claimed that its aim is “… ensuring that the fees recovered are
appropriately aligned to the cost of regulation…”

At the same time it has announced that it wants to take an ‘intelligence-led’ approach and reduce the frequency of inspections by taking a risk-based approach with the potential for earned recognition

Scant comfort for large providers who must ask themselves if £20,000 really does offer value for money if CQC carries out fewer inspection than at present.

In our response to this year’s fee’s consultation UKHCA said

“We see no convincing evidence in this year’s consultation documentation
that the fee structure introduced in 2018-19 has resulted in better value for
money in CQC’s operations, or greater transparency and accountability with
respect to its regulatory activities.”

In light of this, it has never been more important to hold CQC to account.

UKHCA will. Will you?

 

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