17. NHS England contracts and abatement: what do I need to know?
We’ve put together a
guide for members on associate payments during the pandemic in England
. Our video of essential advice on abatement also tells you what you need to know about abatement in England.
Abatement is an agreed reduction in the NHS contract payment for any variable costs associated with service delivery. The contract value paid to an NHS practice is intended to cover all the costs relating to the delivery of that contract. For example, if you have not been practising for three months then your laboratory bills, consumables and corresponding costs would have reduced in that time. This reduction in your expenses for the period in which you were not providing face to face care must be reflected.
The NHS has said it will honour contract payments, but it is reducing that overall figure to take off the costs not spent (abatement). Practices need to know this abatement figure in order to understand their NHS income. The abatement is applied to the whole contract not at the individual performer/associate level.
Abatement to be applied to most contracts from 1st April up until 8 June will be 16.75%. This figure is based on an approximate assessment of variable costs that will not have been incurred when practices were closed to face-to-face care (such as laboratory costs and materials).
For practices that have operated as urgent care centres during that period, there will be no abatement for the time they have been providing urgent care. That different approach recognises the extra costs for UDCs, on set-up, protective equipment and potentially staffing.
For the period from 8 June onwards, when practices have begun to provide face-to-face care again, 100% of contract value will be paid, with no abatement. This recognises the additional costs of providing care during the current period, again for example in terms of PPE. Practices are expected now to be making all possible efforts to be delivering as comprehensive a service as possible to patients.
Practices will not be measured on the delivery of Units of Dental Activity during this period. However specific assurances will be requested that individual practices are open for face-to-face care, are adhering to contractual hours with reasonable staffing levels for NHS services in place and are performing the ‘highest possible levels of activity’, with no undue priority being given to private activity over NHS activity.
Practices will need to deliver at least 20% of usual volumes of patient care activity to receive their full contract value. Importantly, we have agreed with NHS England that the definition of patient care activity includes all clinical contact that dentists or dental care professionals have with patients either face to face, by telephone or video consultation counted by the BSA via completed courses of treatment or via the COVID-19 triage portal.
The period to be assessed will be all clinical contact that dentists or dental care professionals have with patients either face to face, by telephone or video consultation from 20 July to 16 September 2020. This will be compared to the number of courses of treatment only, provided by the contractor in the equivalent period in 2019. Remote advice and care is included in the calculation for 2020 but not for the equivalent period in 2019. If practices are unable to meet the 20% threshold, then they will be required to revert to payment based on UDAs.
This above arrangement is temporary and we are working with NHS England to establish a revised mechanism for the later part of this financial year as activity gradually increases.
Since 25 March, there have been conditions attached to practices continuing to be paid. Included in those has been a requirement on practices to ensure that all staff, including associates, non-clinical and others, continue to be paid at previous levels. All practices will be asked to provide assurance over their continued engagement of staff, and to give an explicit declaration that they have not gained any windfall profits.
recent letter of clarification from NHS England reiterates practices' obligations around passing on payments to staff, including associates. It recommends the use of Net Pensionable Earnings as the best way to do this, which has been our stated position for some time. However, it also recognises that other methods of payment can be appropriate where agreed.
This abatement is not routine and will only apply in this pandemic when face to face activity within a practice has to cease. In a non-pandemic situation if a practice has to close because of fire or flood then force majeure provisions apply and UDAs may be carried forward. This would not have been helpful in a pandemic situation where during the abatement period there are no UDA targets.
The issue of abatement affects general dental practitioners providing NHS services. It does not affect Community or Hospital dentists.
18. When does the furloughed workers scheme close?
The Coronavirus Job Retention Scheme will close on 31 October 2020. In the meantime, it is no longer open to new applications, but practices who had previously claimed under it, can continue to do so until October.
From 1 July, employers could bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim this grant for the hours not worked.
From 1 August 2020, the level of grant is being reduced each month. To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed. See the government’s outline of the
changes made to the scheme.
19. How can I change the terms of employment contracts?
Practices may wish to alter the terms of employment for their employees. This might include: changing the hours that staff work, including breaks, changes to terms about clothing and uniform, and changes to pay or other benefits. There are two ways in which practices can change the terms in an employment contract, either in agreement with the member of staff or through dismissal and rehire. Advice should be sought on both options, members can find out more about the options available to them in our
toolkit for returning to face-to-face care.
20. How can I negotiate changes to associate contracts?
Changes are best made by agreement with the associate concerned and, once agreed, can take effect quickly and easily. The benefits of such changes should be clearly communicated. Associates are more likely to agree to temporary changes that will be reviewed after a period of a few months. We believe it is in both parties’ interests to negotiate sensible changes.
We have produced side letters for associateships in England and Wales that help both parties to work within the current situation.
We ask practice owners to make temporary, rather than permanent changes, at least until the situation becomes clearer. We also ask practice owners to not try and force changes that are too onerous or disadvantageous to associates. Before you take action on contract changes, members should seek
advice from our practice support team. There is more information on the options available in our
toolkit for returning to face-to-face care.
21. What are you doing about business interruption cover?
We have taken legal advice in respect to insurers not paying insurance claims made by dentists in regard to business interruption during the COVID-19 pandemic.
We have instructed law firm Brown Rudnick LLP to examine insurance policies affecting dental practices. It is now working with our members to gather relevant evidence on the full range of polices in the sector. This legal advice will shape the guidance that we will be offering a profession that has been blindsided by a lack of effective insurance during a period that has seen routine care suspended and cash-flow for many practices fall to zero. Members can watch a recording of our webinar with law firm Brown Rudnick LLP on the
legal issues relating to business interruption policies and the pandemic
The Financial Conduct Authority (FCA) has begun its own legal process to weigh up policies covering almost every business sector in Britain. We were the first trade union or professional body to directly engage with the FCA following the failure of most polices to pay out for losses incurred during the pandemic. We welcomed the news, but we have expressed concern that the FCA's ‘one size fits all’ approach will fail to address the specific needs of our members. We are pushing for clarity on whether challenges affecting dentists will be taken into account by the court.
The High Court hearing on business interruption insurance concluded on 30 July, but a judgment is not expected until later in the year due to the huge amount of material under review, the possible impact of the decision and complexity of the arguments.
Much of the legal argument has centred on causation and the requirement for the loss suffered by the insured to have been caused by the "insured event" (for example the occurrence of a notifiable disease within a 25 mile radius of a premises).
The insurers said that, regardless of the events insured against, no policy was ever designed to provide cover for a national pandemic, and as a result of the national lockdown, businesses would have suffered losses anyway. However, the FCA argued that the national lockdown only occurred because of each and every individual case of COVID-19, which can each properly be described as a cause of the insured's losses.
We know that this is an important issue for many dentists and we will update you when we know more.
22. Dentists can't access business rate exemptions, what are you doing about this?
New measures were introduced in the 2020 Budget to give business rate exemptions to retail businesses. Dental practices were not included in this. We believe that in the context of the business disruption caused by the COVID-19 outbreak, it is essential that this exemption be widened to include dental practices. We've made representations to the Government to that effect and we will update you on any progress made.
23. Can I avail of multiple forms of government assistance?
Yes. We have lobbied all four governments for a clear answer on this and at present we know:
England: The Treasury and NHS England have confirmed that mixed practices can make full use of the furlough scheme in proportion to their private activity, without endangering their NHS funding. This will be a relief to many mixed practices, and comes after consistent campaigning on your behalf.
Northern Ireland: A full list of the business support measures that have been put in place in response to COVID-19, and the Department of Health have stated that they expect dental practices in NI will be eligible for support from both UK-wide and NI Executive sources.
CDO has acknowledged the need for financial assistance for the private portion of mixed practices' incomes. The Welsh Government has now introduced
two grants to support businesses in Wales through the Coronavirus pandemic. Grant Number 2 is relevant to eligible dental practices should their rateable value be £12,000 or less.
Scotland: On 9 April, the Scottish Government clarified that mixed dental practices that receive NHS support funding, can also
apply for support from other government sources to cover the private element of their income. These latter claims should be proportionate to the amount of private dentistry delivered.
Members with mixed practices, we've put together a tool to help you calculate how much you are entitled to claim as part of the furlough scheme. Watch this demo video to help you use our furlough calculator. We also recommend that members watch our
advice webinar on financing and furlough .