Care home briefing 149 – Top ups and lifestyle charges

From April 2015, new Regulations came into force about Top Ups. Guidance on the Care Act 2014 issued in October 2014 contains detailed guidance on the provisions in Chapter 8 and Annex 1. The Guidance should be read by anyone responsible for commissioning or negotiating contracts for publically funded residents.

The key provisions as regards care homes are:

  • The Local Authority will always contract with the provider for the full cost of care. The top up is a contribution to the Local Authority toward that cost. Providers should ensure that the contract between the Local Authority and the home is accordingly for the full fee (including any top up).
  • Where Local Authorities have a duty to provide accommodation, they must offer at least one care home where no top up is required and should offer more than one.
  • If a service user expresses no particular choice, and the Local Authority nevertheless makes a placement in a home with a higher than usual cost (for example because of a lack of supply), the Local Authority must pay the full cost.
  • Top ups can only be paid by the service user (rather than a third party) in limited cases (during the 12 week disregard period, where a deferred payments scheme is in place and for section 117 aftercare).
  • Providers must not charge top ups over and above the full fee specified in the contract with the Local Authority.

The last scenario was considered by the Local Government Ombudsman in 2013[1]. The care home had contracted with the Local Authority to provide care and accommodation but then separately invoiced the resident’s daughter the difference between the Local Authority rate and the fees it charged to privately paying residents.

The Ombudsman was extremely critical of the care home and took the unusual step of naming the provider in her report. She said that the provider’s understanding of what it is entitled to charge was clearly wrong. She said:

‘There is only one contract for care provision, with the price of the care stated in it, which can be in existence at any one time. So, the provider was not entitled to try to make any other arrangements for additional payment in respect of the same services.’

She recommended that the Local Authority refunds the payments (and recoup it from the provider) and ensures:

‘all parties it contracts with to provide care on its behalf are aware it cannot charge extra fees for the same care directly to the service user or their family members.’

It is accordingly vital for providers to check that the full amount they are expecting to receive is contained in its Placement Agreement with the Local Authority and that they appreciate that they may not charge anything further in relation to care and accommodation.

The new regulations also require Local Authorities to provide the top up payer with a written agreement which must include prescribed information.

The Guidance on the Care Act provides that whilst providers may agree to collect top ups from third parties on behalf of the Local Authority, this is not recommended. Providers should draw this to Local Authorities’ attention if they are asked to collect the payments on their behalf. Otherwise, the provider will be stuck with the costs of collecting the payments, and may incur cash flow difficulties if payments cease or are delayed.

One final significant risk regarding top-ups is charging them in respect of NHS-funded care. Since continuing healthcare is provided free of any charge or contribution by the service user, there is no facility for top ups at all. The NHS will be fully funding the care under the contract with the Local Authority. Providers are free to refuse to accept NHS funded care if they consider rates too low but are not free to accept the contract and fees and separately charge the service user or third party for the same services.

It may be lawful, however, to charge for goods and services that are not covered by the contract with the commissioners – both for Local Authority and NHS-funded service users. Providers commonly charge for services such as hairdressing and chiropody but may also charge for premium quality rooms and other additional or ‘lifestyle’ items that are not included as part of the standard service as set out in the contract with commissioners. Unlike ‘top ups’, such lifeystle charges can be invoiced directly to the service user or anyone else who agrees to pay them. Care must be taken, however, that the contracts with commissioners do not in fact already include the items, and that the contracts with commissioners do not prohibit additional charges. Where lifestyle charges are to be made, it is also vital that they comply with CQC regulations and Guidance on fees.

If handled correctly, top-ups and lifestyle charges can benefit both residents and care providers. Following the Ombudsman decision, however, Local Authorities are more alert to providers who charge unlawful charges. Providers should ensure they and their Managers understand the provisions to avoid costly claims. It is essential that the contract provisions are robust and lawful and we are well-placed to assist providers who want to get it right.

Footnote
1. Complaint no 12 010 181 against the London Borough of Merton


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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