Health service procurement: draft statutory guidance - Annex C: primary care services

This annex provides additional information about how the regime is expected to be applied when undertaking a procurement process for the delivery of primary care services, where those services are in scope of the regime. Relevant authorities will need to consider whether the regime applies to their arrangements for services on a case-by-case basis and should obtain independent legal advice where appropriate. This annex should be read alongside relevant legislation, and guidance.

Primary care services collectively refer to primary medical, community pharmacy, primary dental care, and primary eye care services. In some circumstances, the procurement of primary care services will be in scope of the regime.

Primary care services, predominantly primary medical and primary dental care, are often provided under contracts, which do not have a fixed end date, and so run until terminated. These contracts are therefore not routinely rearranged by relevant authorities.

However, there will be situations where relevant authorities must select a new provider for a service, for example:

• when responding to planned or unplanned contract terminations
• when time-limited contracts (such as Alternative Provider Medical Service or Personal Dental Services; or Supplementary Services) expire
• when new services are arranged (such as new GP surgeries within a new estate or development)

In these situations, where the regime applies, relevant authorities must follow the appropriate procurement process.

As a general rule in cases where the regime applies:

• new primary care services that involve a relevant authority entering into the proposed contract with a provider must be arranged by applying the most suitable provider process or the competitive process
• continuation of existing services where the contract of the current provider is coming to an end and, the relevant authority wishes to continue with the existing provider and decides that the existing provider is satisfying the existing contract and will likely satisfy the proposed contract to a sufficient standard (taking into account the key criteria and applying the basic selection criteria), and the proposed contract is not a considerable change (see considerable change), may be awarded under direct award process 2
• modifications to existing contracts may be made in line with the regime (see contract modifications)

This section provides examples of how the regime may be applied when undertaking a procurement process for primary medical services across five scenarios:

1. continuation of existing contracts
2. modification of existing contracts
3. planned provider exit
4. sudden or unplanned changes to existing contracts
5. new and integrated services

A GP practice provider has an existing General Medical Services (GMS) contract

This is a nationally negotiated contract, made under section 42(2) of the 2006 Act on the terms set out under the National Health Service (General Medical Services Contracts) (Wales) Regulations 2023 (the ‘GMS Regulations’). These contracts are open ended ^{[footnote 1]} unless terminated by either the relevant authority or the provider.

The contract has already been awarded and it will continue to run on an ongoing basis and will not come to an end unless terminated. Therefore, no procurement process is undertaken.

A GP practice provider has an existing Alternative Provider Medical Services (APMS) contract

APMS means arrangements made under Section 41(2) of the 2006 Act on terms set out under directions issued from time to time.

This contract is time-limited, therefore has a specified duration, with the appointed provider and therefore periodically needs to be re-awarded. The following options are available to relevant authorities when procuring a new APMS contract when the existing contract is coming to an end:

• if the proposed contract is not a considerable change (see considerable change) and the provider is satisfying the existing contract and will likely satisfy the proposed contract to a sufficient standard, then the relevant authority may award the contract using direct award process 2
• if the proposed contract is a considerable change (see considerable change) or the relevant authority wants to seek a new providers, then the relevant authority may undertake a procurement process using either the most suitable provider process or the competitive process

Merger of two or more GP practices leading to changes to existing contracts

Mergers may involve major modifications to contracts. Some proposals may be more straightforward (that is, two GMS contracts merging), while others are likely to be more complex (that is, GMS and APMS contracts merging). If the relevant authority decides to proceed with such a proposal it may need to decide whether to continue with an existing contract or to undertake a procurement process.

Mergers that result in the same services continuing, albeit with different groups or individuals, under one of the previously existing contracts, are permitted modifications under the regime. Therefore, there would be no need to undertake a procurement process. Relevant authorities are expected to refer to the contract modifications section for further information and to assess whether the modification is permitted under the regime.

Mergers that result in material modifications to the contract, such as a material change to the services, require a procurement process to be undertaken. The most suitable provider process or the competitive process must be applied because the relevant authority is in effect commissioning a new service.

A sole practitioner or a partnership wishing to replace its contract with a new one, so that it is held by a body corporate

If the relevant authority is agreeable to the proposal, this type of contract modification may be a permitted modification under the regime, provided the service remains unchanged. Therefore, if this is a permitted modification, there is no need to undertake a procurement process. Relevant authorities are expected to refer to the contract modifications section for further information and to assess whether the modification is permitted under the regime.

Substantial modifications to existing contracts

For example, adding a new branch surgery under a contract or introducing major changes to contract payment mechanisms. If the change itself is acceptable to the relevant authority, this type of contract modification may be permitted under the regime, depending on the size and reason for the modification, and the impact it has on the services delivered. Relevant authorities are expected to refer to the contract modifications section for further information and to assess whether the modification is permitted under the regime.

A GP partnership changing members (initiated by the practice) where there are no changes to the services being delivered

The contracting parties are changing but this does not result in changes to the services delivered.

This type of contract modification may be a permitted modification under the regime provided the service remains unchanged. Therefore, if this is a permitted modification, there is no need to undertake a provider selection. Relevant authorities are expected to refer to the contract modifications section for further information and to assess whether the modification is permitted under the regime.

A GP partnership dissolving, and the former partners disagree about who should take over the contract to deliver the services

Where this relates to a GMS contract, the contract will remain with the partnership until the partners nominate one partner to take the contract. In the case of an APMS contract, the provisions of the relevant contract will need to be reviewed to determine the consequences of dissolution.

In the case of a GMS contract, where a partnership has not served a notice nominating one of the partners to take the contract and has, instead, given notice terminating its existing contract, the relevant authority is required to undertake a procurement process.

The most suitable provider process or the competitive process must be applied.

Substantial modifications to existing GMS or APMS contracts

If the contracting arrangements are changing materially (noting that any modifications must remain compliant with the GMS regulations or APMS directions (as appropriate)), then the modification is not permitted.

Consequently, the relevant authority is required to undertake a procurement process and must apply either the most suitable provider process or the competitive process to select the providers for the new service.

Planned provider exit from a GMS, or APMS contract

In these situations, the decision is either to disperse the patient list to the surrounding practices where the size of the patient list is not substantial, in which case no provider selection takes place, or to choose a new provider.

If a new provider is being chosen such as where the patient list is substantial, then the most suitable provider process or the competitive process must be applied.

Sudden termination of an existing GMS or APMS contract

For example, as a result of contractor default or the contractor ceasing to be eligible or due to the death of a GP who is the sole contract holder or loss of their General Medical Council (GMC) registration.

In these situations, the decision is:

• to disperse the patient list to the surrounding practices, in which case the relevant authority is not required to undertake a procurement process
• to choose a new provider – this may either be as a temporary contract or a longer-term solution
• for a local health board to provide the primary medical services itself in a local health board medical services practice, in which case the relevant authority is not required to undertake a procurement process

If a new provider is being chosen, then the urgent provisions (see urgent award or contract modifications) within the regime may be used to secure immediate needs, such as, to establish caretaker arrangements. However, as this will be a temporary arrangement it must be reconsidered after a set period (see urgent award or contract modifications for further information). To note, a temporary contract under the GMS regulations can only be put in place for a maximum of two years^{[footnote 2]}.

Importantly, the most suitable provider process or the competitive process must be applied to establish a new permanent arrangement.

Urgent provision is needed to cover a service because a provider has opted out of providing it

Examples include:

• a provider leaves the market unexpectedly
• a directed supplementary service needs rearranging rapidly due to a provider unexpectedly declining to participate

In these situations, the decision is either to disperse the patient list to the surrounding practices, in which case the relevant authority is not required to undertake a procurement process, or to choose a new provider – this may either be as a temporary cover or a permanent long-term solution.

If a new provider is being chosen to provide temporary cover, then the urgent provisions (see urgent award or contract modifications) within the regime may be used to secure immediate needs, such as, to establish caretaker arrangements. However, as this will be a temporary arrangement it must be reconsidered after a set period (see urgent award or contract modifications for further information).

To note, a temporary contract under the GMS regulations can only be put in place for a maximum of two years ^{[footnote 2]}. The maximum duration of a temporary contract under GMS regulations should only be applied under the regime where such duration is justifiable as an exceptional circumstance. Relevant authorities are expected to limit the contract term to that which is strictly necessary in line with regulation 15. If the urgent award is greater than 12 months, then relevant authorities must make specific reference to the reasons for the greater duration within their schedule 13 notice of urgent award (paragraph 7 of schedule 13).

Importantly, the most suitable provider process or the competitive process must be applied to establish a new permanent arrangement.

Establishment of a new primary medical service (using GMS or APMS contracts)

In these circumstances, a new provider is being selected for the proposed contract, and so relevant authorities must apply the most suitable provider process or the competitive process.

Arranging a new service under an APMS contract

For example, arranging a new walk-in primary medical service within a hospital. This may be a freestanding APMS contract located within the hospital, or a local health board may award an APMS contract for the service, or directly employ relevant healthcare professionals.

Where the relevant authority is procuring a contract and a provider is being selected for the new service, relevant authorities must apply the most suitable provider process or the competitive process.

Mixed primary medical services and non-primary care services

For example, integrated NHS 111 services, which are usually set up under the Standard Alternative Provider Medical Services (Wales) Contract and comprise primary medical services and urgent care services.

As a provider is being selected for a new service, relevant authorities must apply the most suitable provider process or the competitive process.

Commissioning local supplementary services

For example, GPs with specialist expertise (that is, in dermatology or vasectomies) carrying out ‘traditional’ secondary care health services in primary care settings. These services may be carried out under a contract with a local health board or through healthcare professionals employed by the relevant authority. In the case of the former, because a provider is being selected for a new service, the relevant authority must apply the most suitable provider process or the competitive process.

Where the relevant authority is inviting all GP practices to provide a wider range of services in general practice or to provide their core general practice services to a higher standard, then these services may be carried out under a contract modification. Relevant authorities are expected to refer to the contract modifications section for further information and to assess whether the modification is permitted under the regime.

Commissioning a directed supplementary service that can only be provided by a single provider to meet the needs of the wider population (alternative treatment scheme such as violent patients)

Such services are usually secured via APMS contracts, and in these circumstances a new provider is selected for the proposed contract. Therefore, the relevant authority must apply the most suitable provider process or the competitive process.

This section provides examples of how the regime may be applied to primary dental care service contracts across four scenarios:

1. continuation of existing contracts
2. modification of existing contracts
3. planned provider exit
4. sudden or unplanned changes to existing contracts

A dental practice has an existing General Dental Services (GDS) contract with a relevant authority

Except in limited circumstances, this is a permanent nationally negotiated contract, made under section 57 of the 2006 Act on the terms set out under the National Health Service (General Dental Services Contracts) (Wales) Regulations 2006, unless terminated by either the relevant authority or the provider. The contract may be updated from time to time to ensure it remains compliant with those regulations, but the service does not significantly change.

The contract has already been awarded and it will continue to run on an ongoing basis and will not come to an end unless terminated. Therefore, no procurement process is undertaken.

A dental practice has an existing Personal Dental Services (PDS) contract with a relevant authority

This is a contract that is made under section 64 of the 2006 act on the terms set out under the National Health Service (Personal Dental Services Agreements) (Wales) Regulations 2006.

PDS contracts can be used to arrange mandatory services or specialist services such as sedation, or domiciliary services, and generally have a time limit applied to them – normally reviewed around every five years. PDS contracts are negotiated with qualifying contractors and can come to an end (and thus need to be renewed) from time to time.

Where a PDS contract comes to an end and needs to be renewed, the following options are available to relevant authorities when procuring a new PDS contract when the existing contract is coming to an end:

• if the proposed contract is not a considerable change (see considerable change) and the relevant authority is satisfied that the existing provider is satisfying the existing contract and will likely satisfy the proposed contract to a sufficient standard, it may award the contract using direct award process 2
• if the proposed contract is a considerable change (see considerable change) or the relevant authority wants to seek new providers, then it may undertake a procurement process using either the most suitable provider process or the competitive process

A sole practitioner or a partnership wishing to replace its contract with a new one, so that it is held by a body corporate.

If the relevant authority is agreeable to the proposal, this type of contract modification may be a permitted modification under the regime, provided the service remains unchanged. Therefore, if this is a permitted modification, there is no need to undertake a procurement process. Relevant authorities are expected to refer to the contract modifications section for further information and to assess whether the modification is permitted under the regime.

Substantial modifications to existing contracts

For example, adding a new branch dental practice under a contract or introducing major changes to contract payment mechanisms. If the change itself is acceptable to the relevant authority, this type of contract modification may be permitted under the regime, depending on the size and reason for the modification, and the impact it has on the services delivered. Relevant authorities are expected to refer to the contract modifications section for further information and to assess whether the modification is permitted under the regime.

A dental partnership changing members (initiated by the dental practice), where there are no changes to the services being delivered

The contracting parties are changing but this does not result in changes to the services delivered.

This type of contract modification may be a permitted modification under the regime provided the service remains unchanged. Therefore, if this is a permitted modification, there is no need to undertake a procurement process. Relevant authorities are expected to refer to the contract modifications section for further information and to assess whether the modification is permitted under the regime.

A GDS dental partnership is dissolving, and the former partners disagree about who should take over the contract to deliver the services

Where this relates to a GDS contract, there is a mechanism in the contract that the contractor partners can use to transfer the contract to one of the partners.

If the partnership has not served a notice nominating one of the partners to take the contract and has, instead, given notice terminating its existing contract, the relevant authority is required to undertake a procurement process to award the proposed contract.

The most suitable provider process or the competitive process must be applied.

Substantial modifications to existing GDS or PDS contracts

If the contracting arrangements are changing materially, then the modification is not permitted.

Consequently, the relevant authority is required to undertake a procurement process and must apply the most suitable provider process or the competitive process to select the provider(s) for the new service.

Planned provider exit from a GDS or PDS contract

In these situations, the relevant authority is required to choose a new provider. The most suitable provider process or the competitive process must be applied because the relevant authority is in effect commissioning a new service.

The National Health Service (Pharmaceutical Services) (Wales) Regulations 2020 set out the contracting arrangements specific to community pharmaceutical services and as such these do not come under the regime. However, other health services provided by pharmacies are in scope of the regime, including:

• services commissioned directly from pharmacies under the Standard Alternative Provider Medical Services (Wales) Contract
• additional pharmaceutical services specified in the Pharmaceutical Services (Clinical Services) (Wales) Directions 2022
• local pharmaceutical services schemes

When the commissioning of new services falls within the scope of the regime (such as the examples above), then the most suitable provider process or the competitive process may be applied to establish these services.

To continue with existing arrangements (that is, to award the proposed contract to an existing provider where the current contract is coming to an end), direct award process 2 may be an option, provided that the services are not a considerable change (see considerable change), and the relevant authority is satisfied that the existing provider is satisfying the existing contract and will likely satisfy the proposed contract to a sufficient standard.

The position, with the provision of primary eye care services, is different to those in respect of primary medical services and primary dental services. Arrangements should be considered on a case-by-case basis and independent legal advice sought where appropriate.

The National Health Service (Ophthalmic Services) (Wales) Regulations 2023 (“the Ophthalmic Services Regulations”)  and other Directions issued to Local Health Boards  set out the arrangements specific to the provision of primary eye care services under the NHS (Wales) Act 2006.

It is considered that the provision of primary eye care services, where the number of qualified practitioner providers is not restricted, would likely fall within ophthalmic services regulations and the directions and would not fall within the scope of the regime.

However, where any efforts are made to restrict or limit the number of practitioners of primary eye care services, such as by price for example, these services are likely to fall within the scope of the regime.

When renewing existing services, that fall within the scope of the regime, where the relevant authority wishes to continue with the existing provider, they must assess whether the existing provider is satisfying the existing contract and will likely satisfy the proposed contract to a sufficient standard (taking into account the key criteria and applying the basic selection criteria). Where the relevant authority determines that the existing provider is satisfying the existing contract and is likely to be able to satisfy the proposed contract, and the proposed contract is not a considerable change (see considerable change), the proposed contract may be awarded under direct award process 2.

When the commissioning of new services falls within the scope of the regime, the most suitable provider process or the competitive process may be used to establish these services.

Any other procurement of primary eye care services that is not in accordance with the relevant primary eye care regulations and directions (to the extent it is permitted by the primary eye care regulations), such as where there is inadequate provision (and services are outsourced), are likely to be within scope of the regime.

Where professional collaboratives or clusters are not legal entities they cannot hold a contract. This means that either a lead practice will hold all contracts for the professional collaborative or cluster, or the relevant authority will hold a contract with each individual practice in the professional collaborative or cluster which may then come together through a collaborative agreement. Some professional collaboratives or clusters have established a company (or other corporate entity) to carry out services or other functions on its behalf. That company is a separate legal entity, and such a company may be treated as any other potential provider when considering undertaking a procurement process under the regime.

Where the professional collaborative or cluster is commissioned to deliver existing services that fall within the scope of the regime, the contract is coming to an end and the relevant authority wishes to continue with the existing professional collaborative or cluster and decides that the existing professional collaborative or cluster is satisfying the existing contract and will likely satisfy the proposed contract to a sufficient standard (taking into account the key criteria and applying the basic selection criteria), and the proposed contract is not a considerable change (see considerable change), the proposed contract may be awarded under direct award process 2.

Where the proposed contract is for the delivery of new services that fall within the scope of the regime, the relevant authority must apply the most suitable provider process or the competitive process to establish these services.

The regime does not need to subsequently be applied when the professional collaborative or cluster subcontracts to other organisations within the professional collaborative or cluster (although consent of the relevant authority may be required, depending on the contractual/other terms applicable to the service).

[1] Except in certain circumstances where a temporary GMS contract may be used (urgent GP contracts).

[2] The National Health Service (General Medical Services Contracts) (Wales) Regulations 2023 (legislation.gov.uk)